Russia 091112

Basic Political Developments PRESS DIGEST - Russia - Nov 12 HIGHLIGHTS-President Medvedev annual address to nation US-Russia nuclear talks hit snag: report In the negotiations on START remain unresolved a number of control problems -

the General Staff of Russia Nov 14: Russian Prime Minister Vladimir Putin to meet Slovenian Prime Minister

Borut Pahor in Russia Nov 14–15: Russian President Dmitry Medvedev to take part in Asia-Pacific

Economic Cooperation summit in Singapore Nov 16: Russian Prime Minister Vladimir Putin to hold talks with Slovakia's

Prime Minister Robert Fico in Russia Poland raises concerns over Russian war games - Foreign Affairs Minister

Radosław Sikorski wrote in his letter to the secretary general of NATO that Poland is disturbed with the offensive nature of Russian maneuvers named Zapad 2009.

Russia, Georgia to hold new talks in January Georgia Says No Progress in Eighth Round of Geneva Talks The 100 million dollar question - When Russia’s military intelligence arm (GRU)

released information that a private arms manufacturer will supply Georgia with more than $100 million worth of military funding, the news did not make waves in Tbilisi.

Meeting possible between Pope, Patriarch Kirill - Archbishop Hilarion Russia - MFA - Minister of Foreign Affairs Sergey Lavrov Meets with Srgjan

Kerim, the UN Secretary General’s Special Envoy on Climate Change Russia, Ukraine to discuss European security - The Russian-Ukrainian

consultations between deputy foreign ministers on European security are scheduled to take place on November 16, 2009 in Moscow, the Ukrainian foreign ministry's press office reported today.

New chapter of gas crisis on the horizon - Prime Minister Putin repeated that the advent of new gas supply routes – including Nord Stream and South Stream – will serve to discipline countries that transit Russian gas and will increase the stability and reliability of supply. Russia and Austria will finalize an agreement to work together on the South Stream pipeline as soon as possible.

Russia moves to cut Ukraine out of gas supply route RPT-SCENARIOS-Will Russia go for another damaging gas war? RPT-Q+A-New factors drive Russia-Ukraine gas rhetoric Russian Gas: Pipelines, Politics and Money - By Peter Fedynsky EU urges Russia to keep moratorium on death penalty Russian Federal Security Service to coordinate proceedings in EU-Russia

classified data exchange deal 'Russia keen to build more nuclear reactors for India'

Russian delegation visits Koodankulam - Russian Deputy Prime Minister Sergei Sobyanin and ROSATOM director-general S V Kirienko on Wednesday visited the Koodankulam Nuclear Power Project (KKNPP) site in Tamil Nadu.

Cambodia: Russian firm seeks dam deal Vietnam – Russia co-operation in oil and gas field boosted Russian nuclear sub starts sea trials after overhaul - A Russian Delta-IV class

Karelia nuclear submarine has started sea trials following lengthy modernization at the Zvezdochka shipyard in northern Russia, the company said.

Russia’s state-run corporation Rosatom decided to set up TVEL-based fuel company – Atomenergoprom

Gas supplies to Makhachkala disrupted by trunk pipeline explosion Policeman killed in southern Russia - A spokesman for Russia's Interior Ministry

says a police officer has been killed and another one has been wounded by gunmen in a volatile southern province near Chechnya.

The softer hand - Ingushetia's president pledged to stop abuses against rebels, but violence on both sides persists

Yunus-Bek Yevkurov Authorities say 4 militants killed in Chechnya Five gunmen destroyed, Arab mercenary wounded in Russian FSB, Interior

Forces operation in Chechen Republic Christian Science Monitor: Talk to the editor: Who’s in charge of Russia? Moscow lives up to N- commitments on Iran: Russian envoy Iran calls on Russia to fulfill missile sales deal Russian steel exports to Iran surge in 9 months Is Russia's Iran policy changing? – By HABİBE GÜLER Germany dismisses criminal case against Russian businessman Dropping of charges against Litvinenko murder suspect must charge course of

investigation – Lugovoi Polonium not detected? Russian suspect cleared of charges Russia to develop nuclear-powered spacecraft for Mars mission Russia seeks to remove superlatives from ad campaigns Putin Ranked One of World’s Three Most Influential People The World's Most Powerful People - Igor Sechin: The Kremlin's Oil Man

National Economic Trends Russia's international reserves up $1.1 bln to $433.9 bln in week RenCap: Russia's monetary base widens in October: No danger of inflation

Business, Energy or Environmental regulations or discussions Law on energy efficiency has passed the State Duma Bloomberg: Rosneft, Polyus Gold, Razgulay: Russian Stock-Market Preview MSCI includes Inter RAO, Sberbank prefs in index, Rostelecom removed (Part 2) TeliaSonera, Altimo to Merge MegaFon, Turkcell Stakes (Update2) TeliaSonera and Altimo combine their ownership interests in MegaFon and

Turkcell Sberbank's loan loss provisions to peak in H1 2010 Uncertain future for Russian PVC plant

Polymetal eyes $200-400 mln proceeds from SPO

Activity in the Oil and Gas sector (including regulatory) Pipeline blown up to the Caucasus - The emergency services proceeded with

reparation of the pipeline Mozdok – Quasimagomed, blown up last night, on Thursday, November 12, 2009. The explosion happened on the November, 11 at 10. 00 p.m. 40 km southwards from Makhachkala in the Karabudakhkent District of Dagestan Republic.

ANALYSIS-Russia row pushes Turkmen gas towards new routes TNK-BP May Name Barsky Chief Executive Tomorrow, Vedomosti Says Mikhail Fridman to step down as TNK-BP boss RenCap: Lawsuit challenges Integra's right to Uralmash brand UralSib: BashTEK/AFK Sistema: Bashneft to drop tolling schemes from

December Hungary MOL chief says will not sell INA to Surgut for MOL stake The first trains carrying more than 8,000 tonnes of oil left from Skovorodino to

Kozmino Platts.com: Russian Oil Production Resurgence

Gazprom Gazprom chooses Tenaris for debut project in Libya Gazprom, Srbijagas to Sign South Stream Jv Agreement Nov 17 Gazprom holds South Stream talks with Eni Gazprom confirms non CIS export plans for 2009 Gazprom Neft: Court Throws Out RUB4.675 Bln Antitrust Fine

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Full Text Articles

Basic Political Developments

PRESS DIGEST - Russia - Nov 12http://www.forbes.com/feeds/afx/2009/11/12/afx7114205.html

11.12.09, 03:41 AM EST MOSCOW, Nov 12 (Reuters) - The following are some of the leading stories in Russia's newspapers on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Problems have emerged in Russia-US talks on a replacement for the START strategic offensive arms treaty, but both sides have so far refused to reveal the details, the daily says.

- Russia's Audit Chamber has uncovered misuse of farming lands by local authorities, which caused serious losses to federal authorities.

- Russia's Eurasia Drilling Company (EDC) believes it has a good chance to win a tender to develop oil and gas fields in Iran, according to the head of the company Alexander Dzhaparidze.

VEDOMOSTI

www.vedomosti.ru

- Vimpelcom General Director Alexander Torbakhov says his company will not start working with Kyivstar until their merger deal is closed. He said the acquisition of Golden Telecom ( GLDN - news - people ) has already helped its corporate business.

- TNK-BP ( BP - news - people ) shareholders have agreed to name Maxim Barsky as the company's next chief executive to replace billionaire Mikhail Fridman.

- Burger King ( BKC - news - people ) will enter Russian market by partnering with a local coffee shop chain, the daily says, quoting several sources.

ROSSIISKAYA GAZETA

www.rg.ru

- Russia may have a surplus of more than 20 million tonnes of grain as a result of this year high grain crops, the newspaper reports.

- The government is considering ways to ease tax burden on Russian businesses.

- Banking deposits grew 13.3 percent to 6.7 trillion roubles from January to September.

VREMYA NOVOSTEI

www.vremya.ru

- Russian state-controlled bank Sberbank said on Wednesday it would sack up to 27,000 people, 10 percent of its workforce, by the end of the year to ensure a 25 percent reduction of its personnel in the next five years.

NEZAVISIMAYA GAZETA

www.ngz.ru

- Duma's speaker Boris Gryzlov said on Wednesday that the lower chamber of Russia's parliament would refrain from ratification of a Council of Europe protocol on the death penalty as society remains split over the issue.

- Russia may lose its chance to develop the world's richest silver deposit in Tajikistan as the former Soviet republic is considering selling it to China, the daily reports.

Keywords: PRESS DIGEST Russia Nov 12

(--Writing by Tatyana Ustinova, Reuters Messaging: tatiana.ustinova.reuters.com@reuters.net, +7 095 775 1242)

HIGHLIGHTS-President Medvedev annual address to nationhttp://www.reuters.com/article/companyNewsAndPR/idUSLC40799920091112

Thu Nov 12, 2009 4:58am EST

MOSCOW, Nov 12 (Reuters) - Following are the highlights of Russian President Dmitry Medvedev's annual address to the federal assembly on Thursday:

HOW TO MOVE RUSSIA FORWARD

"We will create a new economy instead of a primitive resource-oriented economy ... We will become a society of free, clever and responsible people, instead of being an archaic society where leaders decide for people."

ON STATE CORPORATIONS

"As far as state corporations are concerned, I think they have no prospects in the current environment."

"Corporations that work under regulation suited to temporary work should, on completing their activities, be disbanded. Those who work on commercial, competitive terms should become modern, open joint-stock companies controlled by the state. In the future, they shouldn't be held in the public sector and should be opened to private investors." "Independent audits are required for these corporations, and also large companies with state participation. Each of these should have a contemporary management model."

ON TAXES

"The crisis has, of course, made it difficult to take decisions on reducing the tax burden, but we should return to those issues in the near future. We definitely have to do it."

ON RESOURCE DEPENDENCY OF THE ECONOMY

"We haven't managed to get rid of the primitive structure of our economy, from a primitive resource dependency ... The competitiveness of our production is shamefully low."

ON INEFFICIENT COMPANIES

"Inefficient companies must undergo bankruptcy procedures or leave the market."

Medvedev said the government would support efficient companies and those which focus on innovations after spending over 1 trillion roubles on bailing out firms this year.

ON BANKS

"The state of our banking sector is today satisfactory."

He said lending to the real economy had resumed.

"From the point of view of the innovation development, our financial sector remains weak."

"The market revival is still weak and unstable and the most dangerous thing today is to calm down."

ON EFFICIENCY

Medvedev said a key areas in making Russia's economy more efficient was to cut gas flaring to 5 percent of output by its target date of 2012, and that the government would not accept any excuses from oil firms.

Russia also needs to speed up work of super-conductors as huge volumes of power are being lost during transmission across Russia's huge territory.

Other priorities include focusing on telecoms industries, with the aim of having nationwide broadband internet, digital television and fourth-generation mobile services in five years.

ON PHARMACEUTICAL INDUSTRY

"We need to be more proactive in developing and producing, in setting up in Russia the most modern technologies in the field of medicine."

"In five years, the share of locally produced medicines on the Russian market should reach no less than a quarter and, by 2020, more than half."

ON REDUCTION OF TIME-ZONES

"We could live with less difference. We need to discuss a possible cut in the number of time-zones and calculate all the consequences of a such decision. The same goes for the expediency of shifting summer to winter time. We must examine all the economic benefits, but we do need to do this."

ON THE POST-SOVIET FUTURE

"The nation's prestige and national prosperity cannot be upheld forever by the achievements of the past."

"Oil and gas production, which provide a large share of the budget revenues; nuclear weapons that guarantee our security, industrial and communal infrastrcuture -- this was all, to a large degree, created by Soviet specialists. In other words, we didn't create them."

"The time has come for us, the current generation of Russians, to make its voice heard; to raise Russia to a higher level of civilisation."

"In the 21st century, our country must once again modernise itself. This will be the first experience in our history of modernisation created on the values of democratic institutions."

US-Russia nuclear talks hit snag: reporthttp://www.google.com/hostednews/afp/article/ALeqM5hNCzbs9WwWqrliX5hb7wbSjTYhFg

(AFP) – 27 minutes ago

MOSCOW — Talks between Moscow and Washington to replace a key nuclear disarmament treaty that expires next month have hit a snag over proposed restrictions on Russian missiles, a newspaper said Thursday.

The dispute threatens to derail high-stakes talks on a successor to the 1991 Strategic Arms Reduction Treaty (START), which US President Barack Obama's administration hopes to replace before it expires on December 5.

The Kommersant daily, citing an expert familiar with the START talks, said Washington was seeking to keep a provision from the original treaty for monitoring Russia's arsenal of mobile ground-based missiles.

"They are offering to keep and even strengthen control over our mobile intercontinental ballistic missiles (ICBMs) such as the Topol," the expert was quoted as saying by Kommersant.

Russia is against the proposal since the United States currently does not have its own mobile ground-based ICBMs and it is therefore of "unilateral character," he said.

The maximum number of "carriers" capable of delivering nuclear warheads remains another sticking point, the newspaper reported.

"In their package, the Americans stipulated a new ceiling for warhead carriers that we don't quite agree with," the expert told Kommersant, referring to proposals presented to Moscow last month by US National Security Adviser James Jones.

Besides ground-based ICBMs, the term "carriers" also encompasses submarine-launched missiles and heavy bombers.

US Undersecretary of State for Arms Control and International Security Ellen Tauscher was quoted as saying by ITAR-TASS news agency earlier this week that Washington was "disappointed" with Russia's answer to Jones' proposals.

But in a sign that both nations were still keen to reach a deal, Russian and US diplomats have already started looking for a venue where the two countries could sign the new agreement, Kommersant said.

START, a landmark treaty seen as a cornerstone of Cold War-era strategic arms control, led to steep cuts in the US and Russian nuclear arsenals.

On Monday, the two countries resumed what they said would be the last round of their marathon talks in Geneva.

12.11.09 12:07 In the negotiations on START remain unresolved a number of control problems - the General Staff of Russia

http://www.interfax-russia.ru/main.asp?id=54077

/Google translation/November 12. Interfax-Russia.ru - Chief of General Staff of Russia Nikolay Makarov confirmed that the negotiations between Russia and the United States to conclude a new treaty on strategic offensive arms there are a number of problems.              "There are a number of problems in control, especially in the inspection, some digital data that is being discussed in the negotiating process. I think that should be removed questions", - said N. Makarov.              Asked how Russia belongs to the American proposals, which include control of Russia's intercontinental ballistic missile Topol, Makarov said: "We want an agreement, if it is signed before December 5, provided in equal security both Russia and the United States. No more. That he was an equal contract, taking into account the interests of each party. "              Makarov recalled that the control of Russia's missiles was carried out "by the

presence on an ongoing basis of the U.S. delegation in Votkinsk, where produce missiles. "We have such missions in the U.S. there, so naturally this mission to remove. She will leave on December 5th place" - he stressed.              "Up to 5 numbers is still time for which we should settle all existing issues of concern" - he said.

http://www.prime-tass.com/news/show.asp?topicid=0&id=467787

Nov 14: Russian Prime Minister Vladimir Putin to meet Slovenian Prime Minister Borut Pahor in Russia

http://www.prime-tass.com/news/show.asp?topicid=0&id=467787

Nov 14–15: Russian President Dmitry Medvedev to take part in Asia-Pacific Economic Cooperation summit in Singapore

http://www.prime-tass.com/news/show.asp?topicid=0&id=467787

Nov 16: Russian Prime Minister Vladimir Putin to hold talks with Slovakia's Prime Minister Robert Fico in Russia

Poland raises concerns over Russian war games

http://www.wbj.pl/article-47455-poland-raises-concerns-over-russian-war-games.html?typ=pam

12th November 2009

Foreign Affairs Minister Radosław Sikorski wrote in his letter to the secretary general of NATO that Poland is disturbed with the offensive nature of Russian maneuvers named Zapad 2009.

"We shall treat the issue raised by Poland in this letter seriously," said head of NATO Anders Fogh Rasmussen.

He went on to say to that the alliance was closely watching the maneuvers of Russia, but it noticed no threat to any of the NATO member states.

The joint Russian-Belorussian military maneuvers, which were carried out in September, were the largest such operation in ten years. Exercises were partially held at the Polish-Belorussian border and Poland was to play the role of an attacker.

During the maneuvers one tactic included simulating an atomic attack on Poland.

Source: Rzeczpospolita

Russia, Georgia to hold new talks in January http://www.earthtimes.org/articles/show/294351,russia-georgia-to-hold-new-talks-in-january.html

Posted : Thu, 12 Nov 2009 09:46:29 GMTGeneva - Russia and Georgia have agreed to hold a new round of talks on January 28 next year, aimed at reducing tensions following their five-day war in August 2008. Representatives of the two sides met for the eight time in Geneva on Wednesday for what a European Union mediator described as a generally positive meeting. EU official Pierre Morel said after the talks that the participants engaged "in a substantial discussion that achieved some progress."Morel oversaw the day-long talks, together with representatives of the United Nations and the Organization for Security and Cooperation in Europe (OSCE). Delegates from the breakaway Georgian republic of South Ossetia and Abkhazia were also present at the meeting, which discussed efforts to stabilize the region and the fate of displaced persons. Tens of thousands were left homeless when Russian forces invaded South Ossetia after Georgia sent its troops into the territory in August 2008.

UN envoy Johan Verbeke said the talks so far had managed to reduce blown up issues to their true significance.

Georgia Says No Progress in Eighth Round of Geneva Talks

http://www.civil.ge/eng/article.php?id=21664

Civil Georgia, Tbilisi / 12 Nov.'09 / 12:43

Negotiators from Georgia and Russia, as well as breakaway Abkhazia and South Ossetia met for the eighth round of internationally-mediated talks in Geneva on November 11.

“Progress was reached on the agreement when to hold the next meeting [January 28, 2010]; unfortunately no progress was made on other issues,” Sergi Kapanadze, head of the Georgian Foreign Ministry’s department for international organizations, told RFE/RL Georgian service via phone from Geneva.

Elements of a potential non-use of treaty and international security arrangements were among the issues discussed at the eighth round of talks.  Kapanadze said that what Russia wanted “is a simple treaty” on non-use of force between Tskhinvali and Tbilisi and Sokhumi and Tbilisi. Georgia is ready to sign non-use of force treaty, but only with Moscow and if the treaty also includes international security mechanisms within the occupied territories as well.

“Russia does not want international engagement in this process; they do not want international community to act as a guarantor of renewed non-use of force commitment,” Kapanadze said.

Co-chairs of the talks, representatives from EU, OSCE and UN, said in a joint statement after the meeting that the participants of the talks discussed basic elements of a framework for an agreement related to the non-use of force and international security arrangements.

“The discussion was based on elements prepared by the Co-Chairs, following consultations with and including contributions provided by participants since the previous round of Geneva Discussions. Participants agreed that the elements form a good basis for further discussion. The Co-Chairs will continue to work on these elements ahead of the next round,” international mediators said.

OSCE’s Greek chairmanship’s special representative, Charalampos Christopoulos, said that the participants “engaged in pragmatic discussions” on the elements of a potential agreement on the non-use of force and international security arrangements.

International mediators assessed situation on the ground as “relatively stable.”

Russian Deputy Foreign Ministry, Grigory Karasin, said he disagreed with this assessment of the international mediators. He claimed that Georgia renewed flights of its unmanned aerial surveillance drones over Abkhazia and South Ossetia.

International monitors expressed concern about a number of cases of detentions of the Georgian citizens in the vicinity of the breakaway regions’ administrative borders.

In one of the recent cases four Georgian teenagers were detained on November 4 and are still held in Tskhinvali. The issue was raised at the talks by the Georgian side.

According to international mediators, during the meeting the participants “exchanged views” on the report by the Independent International Fact-finding Mission on the Conflict in Georgia, headed by Heidi Tagliavini, on the causes of the August war.

“Participants agreed the report contained useful lessons to draw on in contributing to building a more stable future,” EU, OSCE and UN representatives said.

The 100 million dollar questionhttp://www.russiatoday.com/Politics/2009-11-12/georgia-weapons-purchase-poverty.html

12 November, 2009, 09:38

When Russia’s military intelligence arm (GRU) released information that a private arms manufacturer will supply Georgia with more than $100 million worth of military funding, the news did not make waves in Tbilisi.

This is not because Georgians meet most news from Russia with hesitancy – rather it was because most of them went along their day as usual, attempting to make ends meet.

The report, which was confirmed by the Russian Chiefs of Staff, claims Barrington Alliance will supply Georgia with surface-to-air missile systems, such as Patriot-3 and Stingers, anti-armor missile systems, and a plethora of other arms.

While some say $100 million is too small a figure to spend on such a wide array of sophisticated weapons, there is one argument which is hard to overlook: Georgia’s military spending is at 17% of the country’s GDP. According to one Western think-tank, it is the largest percentage that any country spends on armament.

Even within Georgia itself, many have expressed rage at Saakashvili’s determination to spend millions of dollars on arms, while completely ignoring many domestic problems. Former Prime Minister Zurab Noghaideli said it was infuriating that the Georgian Government chooses to spend twice as much on military as on education and health combined.

Also, consider this: pensions for the retired were raised for the third time this year – surely a welcome sign in any country. However, the raise was only by five lari – about $3 a month – bringing the total to 80 lari, which is approximately $48. Not exactly a reason for celebration.

Communal payments make it even less. Most people in the Georgian capital rely on gas for heating their homes in winter. That comes to around 4 lari ($2.40) a month. Electricity – six times as much (around 25 lari – $15). If you add all that together, you’re left with roughly $12 dollars a month to get by.

There is also a study, conducted recently among 1200 Georgians, aged 15 to 47, by Georgian sociologists with the support of Estonian NGOs. According to its results, less than a quarter of respondents can afford to buy food and clothing. Thirty-four percent say revamping their wardrobe is out of the question, while 37% say even buying food is a problem.

A draft budget for 2010 sees a decrease in expenditures for almost all Ministries, but if Defense is looking at getting around $450 million next year, Culture and Sports ought to be content with $38 million. There is no increase planned for pensions or social allowances either.

The architecture of Tbilisi’s Old Town, along with the entire downtown area, is breathtaking. However, for tourists hoping to see that beauty themselves, the advice is to hurry – it may not last for much longer. Most of the buildings are in catastrophic

condition. They have not been renovated since the beginning of the 20th century, and look like they can crumble down very easily, especially if the earthquake-prone country is shook up again. Given a proper facelift, Tbilisi could easily give Rome or Toledo a run for their money, but Georgian officials are far more concerned with spending millions on weapons than on their country’s own capital.

Officials in Tbilisi continue to stress the fact that they are not breaking any international laws or conventions by purchasing weapons or strengthening their army. It is all for the sake of defense, they say – a remark which is chiefly pointed at Russia.

At the same time, Moscow has repeatedly expressed its concern that Georgia’s increasing military might could well be a sign of another impending attack on Abkhazia and South Ossetia. Both republics declared independence in 2008 following the Five-Day War with Georgia, which claimed hundreds of lives and displaced thousands more.

Russia has repeatedly called for an embargo on arms shipments to Georgia, but it fell on deaf ears. NATO countries, as well as Israel and Ukraine, supplied Georgia with weapons and training before the armed conflict with South Ossetia and Abkhazia. Even after the war they continue to do so which, according to Russian intelligence, could contribute to another war in the region.

Meanwhile, the situation around Georgia and its relations with Abkhazia and South Ossetia continue to throb and burn like a blister – one which Moscow fears could burst at any moment.

An eighth round of discussions of Security in the North Caucasus begins Thursday, November 12, in Geneva seeking to find a peaceful resolution to the issue. Georgia, Abkhazia, South Ossetia are among the participants, with representatives from the United States, UN, EU and OSCE also taking part.

As Russia’s deputy Foreign Minister Grigoriy Karasin said in an article in Izvestiya newspaper, the Geneva talks do have a future – but only if all participants, especially Tbilisi, will search for a compromise to the solution.

Thus the $100 million question remains: is it really worth spending all that money on the military, and not on making the lives of ordinary Georgian citizens better?

Irina Galushko, RT, Tbilisi

12 November 2009, 12:23

Meeting possible between Pope, Patriarch Kirill - Archbishop Hilarionhttp://www.interfax-religion.com/?act=news&div=6633

Moscow, November 12, Interfax - Relations between the Russian Orthodox and Roman Catholic Churches are improving and a meeting between Pope Benedict XVI and the Patriarch Kirill of Moscow and All Russia, may be on the cards, a Russian Orthodox bishop said.

"Today it can be said that we are moving to a moment when it becomes possible to prepare a meeting between the Pope and the Patriarch of Moscow," Archbishop Hilarion of Volokolamsk, the head of the Department for External Church Relations, told reporters in Moscow.

"There are no specific plans for the venue or timing of such a meeting but on both sides there is a desire to prepare it," the Archbishop said.

Preparations for such a meeting must involve finding "a common platform on all remaining points of dispute," the Archbishop said.

One such issue are relations between the Uniate community and Orthodox believers in Ukraine. In the early 1990s, "the fragile interdenominational balance was upset and a serious situation took shape that still exists," Archbishop Hilarion said.

At the same time, conversion of Orthodox believers into Catholicism is less of a problem today than it was a decade ago, he said.

Benedict XVI is "a very reserved, traditional man who does not seek the expansion of the Catholic Church to traditionally Orthodox regions," the Archbishop said.

When Benedict XVI, shortly after being elected Pope, met with Metropolitan Kirill (the present Russian Patriarch, then head of the DECR, a papal visit to Russia "was taken off the agenda as now it appears to us to be impossible," the bishop said.

After Metropolitan Kirill has been elected Patriarch, "one can hope for further steps" in Orthodox-Catholic dialogue because the Patriarch "will continue the line on relations with Christians of other denominations that he pursued as part of his former activities," the Archbishop said.

Russia - MFA - Minister of Foreign Affairs Sergey Lavrov Meets with Srgjan Kerim, the UN Secretary General’s Special Envoy on Climate Changehttp://www.isria.com/pages/11_November_2009_182.php

Russian Minister of Foreign Affairs Sergey Lavrov received Srgjan Kerim, the UN Secretary General’s Special Envoy on Climate Change, in Moscow on November 10.

They discussed the status of the international climate process and prospects for the preparation of a UN Climate Conference in Copenhagen in December this year, which is

expected to agree the approaches to a future international climate regime beyond 2012.

The Russian side evaluated highly the contribution of UN Secretary General Ban Ki-moon in shaping consensus agreements with respect to that regime, and his resolve to enhance the role of climate issues in the global agenda. There was confirmed Russia's readiness for constructive cooperation with all partners to make the future climate regime truly universal, inclusive and equitable.

Russia, Ukraine to discuss European security

http://www.rbcnews.com/free/20091112104101.shtml

      RBC, 12.11.2009, Kiev 10:41:01.The Russian-Ukrainian consultations between deputy foreign ministers on European security are scheduled to take place on November 16, 2009 in Moscow, the Ukrainian foreign ministry's press office reported today.

      The Ukrainian delegation will be headed by Deputy Foreign Minister Konstantin Yeliseyev, and his counterpart Alexander Grushko will lead the Russian delegation. "The parties are expected to discuss a wide range of issues concerning both countries," the statement reads.

New chapter of gas crisis on the horizonhttp://www.russiatoday.com/Business/2009-11-12/ukaine-gas-europe-crisis.html/print

12 November, 2009, 12:33

Prime Minister Vladimir Putin has warned Europe about the possible eruption of a new gas dispute with Ukraine.

After talks with the Austrian Chancellor, he said Russia will cut gas supplies to Ukraine if it starts unauthorized siphoning of fuel from pipelines.

Speaking with journalists Putin confirmed Russia can guarantee Europe uninterrupted supplies but only if transit states weren’t taking gas out of the system.

“If our partners pay us for the domestic consumption of gas, they will receive this gas. If they don't pay – they won't receive it. If they don't receive it – then, most likely they will take it from the export gas pipeline. As soon as they start taking it – we will decrease the amount of gas we ship.”

Russia’s Prime minister says Ukraine does have the money to pay for gas and to prevent disruptions. Konstantin Simonov, head of the National Energy Security Fund says that political games are getting in the way of business.

“We know that the reserves of Ukraine are a little bit less than $30 billion. In December they must pay around $600 million. Ukraine really has enough money to pay all debts. It’s only the political decision of Yuschenko. His rating now is 3 percent. For him it’s impossible to be re-elected without any crisis or war. It can be the only possibility for him to organize another gas war and say – you see how dangerous Russia is.”

Prime Minister Putin repeated that the advent of new gas supply routes – including Nord Stream and South Stream – will serve to discipline countries that transit Russian gas and will increase the stability and reliability of supply. Russia and Austria will finalize an agreement to work together on the South Stream pipeline as soon as possible.

Russia moves to cut Ukraine out of gas supply routehttp://www.euronews.net/2009/11/12/russia-moves-to-cut-ukraine-out-of-gas-supply-route/

12/11 07:11 CET

Russia and Austria have agreed to move swiftly on a pipeline deal that would cut Ukraine out of the gas supply route.  At a meeting in Moscow, Austrian Chancellor Werner Faymann expressed his support for the Russian South Steam pipeline.  Russia is keen to cut-out Ukraine after allegations of theft. Speaking at a press conference Russian Prime Minister Vladimir Putin issued a warning to Ukraine:“If our transit partners pay for gas for their own consumption, they will receive gas for their own consumption. If Ukraine does not pay for gas supplies for their internal use, it is likely they will siphon it from the export line. As soon as that happens, we will cut supplies” Russia is trying to persuade its European customers to use one of its two pipelines with routes that bypass Ukraine – Nord Stream or South Stream.  However, Ukraine has reassured its neighbour that there will be no illicit siphoning. Ukrainian Prime Minister Yulia Tymoshenko, said:

“If cooperation continues, we can guarantee that under no circumstances will we break our obligations to the EU in terms of transporting gas.  We will strictly observe our contracts. Ukraine will not break its obligation to Russia. We will pay for natural gas that has been used by us” Europe receives about 20 per cent of its gas from Russia. A repeat of a dispute last New Year with Ukraine could once again leave thousands feeling the cold. The EU is backing an Austrian project, in a bid to cut dependence on Russian gas.

Copyright © 2009 euronews

RPT-SCENARIOS-Will Russia go for another damaging gas war?http://in.reuters.com/article/governmentFilingsNews/idINLB60682720091111

Thu Nov 12, 2009 12:01am IST

(Repeats to attach graphic)

By Dmitry Zhdannikov

MOSCOW, Nov 11 (Reuters) - Russia cannot afford cutting gas to Ukraine for a second year in a row as it would have too much to lose, including Europe's support for its key gas projects at a time when its European gas market share is shrinking.

But, despite a virtual consensus among analysts that a cut in supplies to Ukraine and the subsequent stoppage of flows to Europe would equal political and economic suicide for Moscow, sceptics say Kremlin policies could be still driven by apparently irrational decision making.

Following are some scenarios of how Russia-Ukraine relations could unfold and what could happen to Russian gas flows to Europe, which cover a quarter of the continent's needs:

TIMELY PAYMENTS, NO CUTS

Ukraine keeps paying its monthly Russian gas bills on time before and after the presidential elections on Jan. 17, possibly with help from the European Union and international financial organisations, while Moscow maintains gas flows.

Russia and Ukraine clinched a deal in January under which Kiev must pay its monthly gas bills before the seventh of the following month and guarantee transit to Europe, which was left short of gas for three weeks in January in the dead of winter.

Russian Prime Minister Vladimir Putin has warned Europe that Ukraine may fail to pay its monthly bills because of its dire economic situation, but Kiev has so far met all deadlines, including a $460 million bill for October.

Moscow also accused pro-Western President Viktor Yushchenko, who came to power in 2004 after beating a Moscow-backed candidate, of obstructing timely payments by Prime Minister Yulia Tymoshenko, now Moscow's favourite politician in Ukraine.

Both run for president in January alongside Viktor Yanukovich, Moscow's former favourite in Ukraine, and the Kremlin has said relations cannot improve under Yushchenko.

"Any gas cuts will play into Yushchenko's hands so I don't believe Russia could cut gas this year," said Valery Nesterov, oil and gas analyst at Troika Dialog.

PROBLEMS WITH PAYMENTS, NO CUTS

Problems with payments could still arise on Dec. 7 or Jan. 7 should Ukraine fail to generate cash amid deep recession, state energy firm Naftogaz's crumbling finances and doubts over an IMF bailout programme. [ID:nLU651399]

Moscow would still refrain from cutting supplies and would rather rely on the EU's growing mediation role [ID:nL5273482].

"Moscow has greatly improved its relations with the main EU countries even since last January and will not wish to contribute to any setback of that progress," said Chris Weafer, chief strategist at Uralsib brokerage.

Russia is very keen to speed up its pipeline projects, South and Nord Stream, to cut reliance on Ukraine as a transit route and delay the rival EU- and U.S.-backed Nabucco project.

Moscow has completed deals with a number of countries that suffered from last year's supply disruption and will not wish to destroy the "detente" that has been so painstakingly built this year, Weafer said.

The removal of the "missile shield" issue has helped calm relations with Poland and the Czech Republic and the last thing that Moscow will want is to inflame tensions again over gas.

Therefore, better coordination between Moscow and Brussels guarantees a solution, Weafer says, be it a loan from the EU, the International Monetary Fund or a compromise by Moscow.

"Kiev is simply too dependent on either the EU or Russia, or, more likely both, not to agree to any deal offered. Neither Brussels nor Moscow will put Kiev in a situation that it has zero options," said Weafer.

MOSCOW CUTS GAS

Under this scenario, seen as the most unlikely, Russia gets tough on Ukraine and cuts off gas and transit flows following a bill non-payment, a dispute over Ukraine's low gas use or being unhappy with the outcome of Ukraine's election.

"Putin's decisions are unpredictable. The 'punishment' of Ukraine is still his top priority. The Gas War-3 is possible," said Mikhail Korchemkin from East European Gas Analysis.

On Wednesday, Putin stepped up his anti-Kiev rhetoric warning Ukraine against using transit gas [ID:nLB394595].

"The last gas war was irrational too. Leaving the market at a time of growing competition was a very stupid idea," said Korchemkin.

Gazprom saw demand for its gas plummeting this year amid Europe's economic contraction and as clients chose to switch to cheaper and abundant liquefied natural gas (LNG).

Any cut would further bite into profits of gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research), Russia's most indebted firm with debt of $60 billion, and a major contributor to budget revenues.

Korchemkin said there was one development outside the Russian, Ukrainian or EU control that could spark a new gas war: "Russia will try to heat up the market if oil prices fall".

For a graphic on gas pipelines in Europe, please see:

here

(Writing by Dmitry Zhdannikov)

RPT-Q+A-New factors drive Russia-Ukraine gas rhetorichttp://in.reuters.com/article/governmentFilingsNews/idINLA64902620091111

Thu Nov 12, 2009 12:04am IST

(Repeats to add link to graphic on pipelines)

By Sabina Zawadzki

KIEV, Nov 11 (Reuters) - Europe is bracing itself for the possibility of another New Year gas row between Russia and Ukraine, which last year led to supply cuts, leaving hundreds of thousands out in the cold and grinding some industry to a halt.

A contract signed after January's three-week standoff should have clarified gas relations between the two countries and ensured there were no more rows about prices and supplies. This year, Ukraine has paid all its bills on time.

But analysts say the potential for a dispute ahead of a Ukrainian presidential election on Jan. 17 exists and, if it happens, it will be sparked purely by political motivation.

WHY SHOULD EUROPE CARE?

Europe receives about 20 percent of its gas from Russia flowing through pipelines running across Ukraine. Some southern and eastern countries are almost entirely dependent on the gas.

Russia cut gas supplies to Ukraine and, later, onwards to Europe as of Jan. 1 over a gas pricing dispute.

As Ukraine ate into its vast reserves and felt little impact from the cuts, European leaders were shocked that a dispute between two non-EU members could impact its own citizens.

In Slovakia, hundreds of companies were forced to shut down or cut production, thousands of people were left without heating in the Balkans and Bulgaria characterised the supply cuts as "catastrophic", likening it to a "terrorist attack".

For a graphic on gas pipelines in Europe, please see:

here

WHAT WAS THE DISPUTE ABOUT?

Ostensibly, the row was about how much Ukraine should pay for Russian gas after a year of settling bills late. Like many former Soviet republics, Ukraine paid subsidised prices but Moscow wanted its neighbours to start paying market prices.

The two sides also disagreed on how gas should be supplied to Ukraine, including the existence of a trading intermediary called RosUkrEnergo.

The row became protracted after Russia accused Ukraine of stealing gas meant for Europe and as EU monitors were sent to Ukraine to investigate what was happening at pumping stations.

But the conflict developed as President Viktor Yushchenko's relations with Moscow slumped and after Russia fought a brief war with Georgia -- another ex-Soviet state wishing to move from under the shadow of Moscow toward the West.

HOW WAS IT SOLVED?

Russian Prime Minister Vladimir Putin and his Ukrainian counterpart, Yulia Tymoshenko, agreed on a 10-year supply contract on Jan. 19, which stipulated Ukraine would pay market price minus 20 percent for 40 billion cubic metres of gas this year.

WHAT IS DIFFERENT THIS YEAR?

Though caught in a deep recession, Ukraine has so far settled all its bills on time and said it would use IMF cash to pay gas supplies of the next few months.

Relations between Yushchenko and the Russian leadership have collapsed. Russian President Dmitry Medvedev has said he cannot do business with the Ukrainian, but ties between Putin and Tymoshenko have been cordial.

Yushchenko is almost certain to lose a presidential election on Jan. 17 -- any gas war could influence the results of the election.

Gazprom (GAZP.MM: Quote, Profile, Research), Russia's export monopoly and the world's largest gas producer, has been hit this year by falling demand from European customers gripped by the economic crisis and a switch by some clients to liquefied natural gas (LNG).

Gazprom Export deputy head Sergei Chelpanov has said European customers will buy 8-9 billion cubic metres less gas this year than foreseen by "take or pay" contracts, raising the possibility Gazprom will have to chase customers for payment.

European countries are much better prepared for a potential crisis. Stocks are filled almost to capacity and abundant LNG supplies give them an alternative.

WILL THERE BE A GAS WAR?

The potential for a conflict already exists -- Ukraine has bought far less gas than it promised it would at the start of the year and the two sides have not yet agreed on next year's volumes.

It has struggled to make monthly payments for gas and is likely to go through to the end of the year without a $3.8 billion IMF bailout that had been due for release this month.

Putin has warned that gas supplies to Europe would be cut if Ukraine siphons of transit gas for its own use -- the reason cited by Moscow for January's supply cuts. [ID:nLB394595]

But Ukraine has so far made all payments on time and built up large reserves of gas needed to ensure smooth transit to Europe during the winter months, while Moscow has said it would not impose fines for under-consumption.

Analysts say Russia cannot afford to cut gas to Ukraine for a second year in a row as it might play into the hands of Yushchenko, who could portray himself as the victim of Russian aggression.

Gazprom also needs European support for key gas projects. It is unlikely to want to jeopardise hard-won agreements with European countries after securing backing for pipeline projects. To see SCENARIOS related to the potential gas war, double-click on [ID:nLB606827]. (Additional reporting by Robin Paxton in Moscow)

Russian Gas: Pipelines, Politics and Money By Peter Fedynsky http://www.voanews.com/english/2009-11-11-voa53.cfm

Moscow11 November 2009Russian Prime Minister Vladimir Putin has warned Ukraine he will cut off the country's gas supplies if it siphons fuel from export lines. Mr. Putin made the statement in Moscow following a meeting with Austrian Chancellor Werner Faymann. His warning carries an implicit threat that Europeans this winter could again face shortages of gas they receive from Russia via pipelines that go through Ukraine.  

Russian Prime Minister Vladimir Putin has been discussing energy with European leaders much of this past year. He met with the prime minister of Hungary in May to speed construction of the new South Stream gas pipeline from Russia to Europe, a pipeline that will not transit Ukraine.  

In October, Mr. Putin discussed the project with his Italian counterpart. Following talks on November 2 with the Danish head of government, Mr. Putin issued a sharp warning that Europe should help pay for deliveries of Russian gas to Ukraine.

The Prime Minister says Russia has already paid Ukraine $2.5-billion for transit and urges Europeans to throw in, as he puts it, "a lousy billion". Mr. Putin bluntly comments, "Why have they become so stingy down there? They have money, too. Let them get something out of their pockets."Ukrainian Prime Minister Yulia Tymoshenko says her country paid Russia $500 million for October's gas bill. She also alleges President Viktor Yushchenko blocked payments usually made through the Ukrainian National Bank. Mr. Yushchenko, in turn, has criticized Ms. Tymoshenko for negotiating a gas contract that favors Russia. Both are candidates in a January presidential election.

Russian National Energy Security Fund Director Konstantin Simonov agrees with both accusations. He says Ms. Tymoshenko obligated Ukraine to pay for gas it does not use. And Simonov says the Ukrainian president has his eye on the upcoming election.

The analyst says President Yushchenko and those close to him are concerned, above all, with their own re-election. Simonov says for them it is clear their only chance to stay in power is to organize a major disruption, and in that regard, a gas war with Russia is an ideal scenario.Meanwhile, Finland and Sweden in early November approved construction of the Nord Stream pipeline in their waters. Nord Stream would also circumvent Ukraine, delivering Russian gas to Northern Europe under the Baltic Sea. But Estonian Defense Minister Jaak Aviksoo accuses Moscow of playing politics.

"The decision to have the Nord Stream as well as South Stream bypassing a number of central Eastern European countries is clearly a political decision," said Jaak Aviksoo.

"And unfortunately these countries not being consulted feel themselves somehow out in the cold."

European countries are also considering construction of yet another pipeline, Nabucco, which is backed by the United States and would circumvent Russia with supplies of Asian or Middle Eastern gas.

Harvard University's Marshall Goldman told VOA that Moscow is seeking to prevent such pipeline competition by playing European countries against one another.  

"We will make a special deal with you, we will give you a discounted price, sign up with us and you will be protected," said Marshall Goldman. "We will not cut you off.' And this kind of leads to disruption in any kind of united front that might otherwise stand off against the Russians."Konstantin Simonov warns that Europe cannot replace the huge volumes pumped by Russia with Nabucco's relatively small annual capacity of 31 billion cubic meters. He also questions the reliability of Nabucco's potential suppliers.  

Simonov says he wants to ask Nabucco backers if they have been in Turkmenistan. Have they been in Iran or Egypt? Do they not have any reservations that those countries are much more capable of politicizing the energy dialogue [than Russia]? Simonov says he does not think his country is using gas as a political weapon, but has, instead, a different problem - it wants to make lots of money.

Simonov cautions that Russia should not be allowed to corner the market on Central Asian gas, which already flows through Russian and Ukrainian pipelines to Europe.

EU urges Russia to keep moratorium on death penaltyhttp://en.rian.ru/world/20091112/156801791.html

03:3312/11/2009

BRUSSELS, November 12 (RIA Novosti) - The European Union is hoping that Russia will not abolish the moratorium on the death penalty, European Commissioner for External Relations and European Neighborhood Policy Benita Ferrero-Waldner said.

Russia undertook to scrap the death penalty when it signed Protocol 6 to the European Convention on Human Rights, but it has not yet ratified the document.

Russia's Constitutional Court held a session on Monday on whether the death penalty should be restored, but after several hours of hearings, turned the ruling to a closed session to be held later in the year. The court said the decision may come before the New Year.

"It [the death penalty] is unacceptable for us as it is against our common values," Ferrero-Waldner said Wednesday during the debates in the European parliament prior to a Russia-EU summit on November 18.

The court's 1999 ruling declared that the death penalty could not be applied until trial by jury had been introduced in all Russian regions.

The troubled North Caucasus republic of Chechnya will become Russia's last region where juries will be allowed as an alternative to panels of judges on January 1, 2010, removing the formal obstacle to reinstating capital punishment in the country.

The court must now decide if by reinstating the death penalty Russia would be violating its international commitments, and if that would be unconstitutional.

Some senior Russian officials and lawmakers have said that the country, bound by its obligations under the European Human Rights Convention, would most likely extend the moratorium despite strong public support for capital punishment.

"We certainly hope it will be so," Ferrero-Waldner said.

Russian Federal Security Service to coordinate proceedings in EU-Russia classified data exchange deal

http://www.axisglobe.com/article.asp?article=1945

11.11.2009The European Union and Russia are on the verge of signing an agreement on exchanging classified information, news agency AFP reports. The agreement, six years in preparation, is expected to be signed at the next EU-Russia summit on November 18 in Stockholm, Sweden. On the Russian side, it is the Federal Security Service (FSB) that will coordinate proceedings, while the EU's High Representative for Foreign and Security Policy, currently Javier Solana, will act on the union's behalf. According to the agreement, each party, Russia and the EU, can decide on the release of classified information to the other party on a case-by-case basis according to its own security interests. Nothing in the agreement is to be regarded as a basis for mandatory or generic release of classified information, daily Javno cites the unofficial documenton the agreement. Moscow and Brussels will have to ensure that security classification or classification markings on the documents provided by their partner are not changed. They also agree to common basic principles on protecting the information, including which officials might have access to it and how security clearance will be granted. The agreement will enter into force one month after they have carried out the necessary internal procedures for it to function correctly, AFP marks.

'Russia keen to build more nuclear reactors for India'

http://www.ptinews.com/news/373485_-Russia-keen-to-build-more-nuclear-reactors-for-India-

STAFF WRITER 14:39 HRS IST

Tirunelveli (TN), Nov 12 (PTI) Russia, currently assisting India in the construction of two 1,000 MWe nuclear power reactors at Koodankulam nuclear plant in this district, is negotiating with New Delhi to build more reactors, its Deputy Prime Minister Sergei Sobyanin has said.

"Russian Federation is prepared to construct new cost-effective nuclear reactors for India, considering its energy needs, and negotiations are going on in this direction," Sobyanin, on a visit to the Koodankulam nuclear power plant yesterday, told reporters.

Heading a nine-member high-level delegation, Sobyanin inspected the progress of the work on construction of the 2 X 1000 MWe reactors in collaboration with Russia at a cost of Rs 13,171 crore at the plant.

Russia was keen to build two more such reactors for the plant, he said.

Expressing satisfaction over the progress of the work, he said the process of installation of equipment was going on.

Russian delegation visits Koodankulamhttp://www.expressbuzz.com/edition/story.aspx?Title=Russian+delegation+visits+Koodankulam&artid=xDtEbGeGa/o=&SectionID=lMx/b5mt1kU=&MainSectionID=lMx/b5mt1kU=&SEO=&SectionName=tm2kh5uDhixGlQvAG42A/07OVZOOEmts

Express News ServiceFirst Published : 12 Nov 2009 10:26:44 AM IST

THIRUVANANTHAPURAM: Russian Deputy Prime Minister Sergei Sobyanin and ROSATOM director-general S V Kirienko on Wednesday visited the Koodankulam Nuclear Power Project (KKNPP) site in Tamil Nadu.The high-profile Russian delegation reached Koodankulam via Thiruvananthapuram. They were shown around the KKNPP by a team led by Nuclear Power Corporation of India Ltd (NPCIL) chairman S K Jain.The Russian delegation included Russian Ambassador to India Alexander Kadakin, Atomstroyexport president Dan Belenkiy and Atomstroyexport director-general Generalov.Jain briefed Sobyanin on the Indo-Russian project, before the team took a tour of the project. The largest nuclear power project in the country, the 2x1000 MWe KKNPP, is now in the advanced stages. The civil construction works have been completed for Unit-1. Many systems have been commissioned and pressed into operation.

The major equipment for the plant is supplied by Russia, while the NPCIL is in charge of construction, erection and commissioning works.Atomic Energy Department additional secretary A P Joshi, NPCIL director (projects) K C Purohit, KKNPP station director M Kasinath Balaji and KKNPP chief construction engineer A K Pal were present.

The Russian delegation had arrived in Thiruvananthapuram on Tuesday. They left Russia via Thiruvananthapuram on Wednesday evening.

Cambodia: Russian firm seeks dam dealhttp://www.phnompenhpost.com/index.php/2009111229481/Business/russian-firm-seeks-dam-deal.html

Thursday, 12 November 2009 15:01 Chun Sophal

THE federal assembly of Russia has asked Cambodia to grant a Russian firm permission to build a US$2 billion dam in the Kingdom, the head of the National Assembly’s finance, banking and audit committee said after returning from Moscow on Tuesday.

“Early last week the Russian assembly requested we allow the Russian company to build a hydroelectric dam capable of producing 960 megawatts in Stung Treng province,” Cheam Yeap said.

The Russians did not identify the firm they were proposing build the dam. However, Much Chhun Hourn, director of the Hydroelectricity Department, said Wednesday that the ministry in 2007 licensed Russian firm JSC Bureyagesstroy to conduct a feasibility study on a dam in Stung Treng province.

The firm had not yet submitted the study to the ministry. “We won’t be able to evaluate the project and its potential until the report is submitted,” Much Chhun Hourn said.

Cheam Yeap said his Russian counterparts told him Friday that the company had submitted the report and was awaiting approval from the Cambodian National Assembly.

Vietnam – Russia co-operation in oil and gas field boosted

http://www.nhandan.com.vn/english/business/121109/business_vr.htm

Nhan Dan Online – Deputy Prime Minister of Russia Igor Sechin received the delegation led by General Director of the Petrovietnam Phung Dinh Thuc on November 10 in the framework of the Vietnam National Oil and Gas Group (Petrovietnam)’s visit to Russia.

Participating the reception also were Russia’s minister of energy, the deputy minister of industry and commerce and heads of some Russian oil and gas companies such as Gazprom, Transneft, Zarubezhneft.

General Director Phung Dinh Thuc thanked the Russian Government and Deputy Prime Minister Igor Sechin for their interest and assistance to boost the strategic co-operative ties between the two countries in the field of oil and gas and briefly reported the situation and prospect of co-operation in this field, and at the same time, asked the Russian Government and the Deputy Prime Minister to continue to create favourable conditions for the Petrovietnam to expand its co-operation in the oil and gas field from exploration and exploitation to processing and import-export of crude oil as well as gas products from Russia.

Russian Deputy Prime Minister Igor Sechin affirmed his sentiments and special interest and support to the co-operation promotion with the Petrovietnam in the oil and gas field, encouraged the group and its Russian partners to continue to seek and expand the projects of oil and gas investment co-operation in Vietnam and Russia, as well as in the third country for the benefits of the two parties, making a contribution to cultivating and strengthening the special traditional relation between the governments and peoples of the two countries.

Russian nuclear sub starts sea trials after overhaulhttp://en.rian.ru/mlitary_news/20091112/156800516.html

00:3512/11/2009

ST. PETERSBURG, November 12 (RIA Novosti) - A Russian Delta-IV class Karelia nuclear submarine has started sea trials following lengthy modernization at the Zvezdochka shipyard in northern Russia, the company said.

The overhaul, which started in 2004, included noise reduction, improved enemy ship and submarine tracking capabilities, and enhanced survivability. The submarine has been equipped with 16 Sineva RSM-54 missiles.

K-18 Karelia could join Russia's Northern Fleet by the end of this year, the shipyard said in a statement on Wednesday.

Similar overhaul has been done to four other Delta-IV class submarines - the K-51 Verkhoturye, the K-84 Yekaterinburg, the K-114 Tula, and the K-117 Bryansk.

The Russian Navy has seven Delta-IV class submarines in service. They are all deployed in the Northern Fleet.

"The Delta-IV class submarines are the core of the naval component of the Russian nuclear triad at present. After the modernization, the subs will be able to remain in service for another 10 years," Zvezdochka said.

Russia’s state-run corporation Rosatom decided to set up TVEL-based fuel company – Atomenergopromhttp://www.itar-tass.com/eng/level2.html?NewsID=14521633&PageNum=0

11.11.2009, 23.46

MOSCOW, November 11 (Itar-Tass) -- Russia’s state-run corporation Rosatom decided to create a fuel company in the basis of the world’s leading nuclear fuel producer TVEL, the press service at the state-run nuclear energy company Atomenergoprom told Itar-Tass.

According to the press service, “the decision was approved in the format of the program for restructuring Russia’s atomic energy industry in order to raise efficiency of its operation.”

TVEL is a wholly owned subsidiary of Rosatom’s subsidiary Atomenergoprom, the press service explained.

Atomenergoprom plans to provide TEVL with a 100-percent stake in Separation-Sublimation Complex (RSK), which holds a 100-percent stake in the Angarsk Electrolysis Chemical Plant, Krasnoyarsk Region-based Electrochemical Plant, the Ural Electrochemical Plant, and the Siberia Chemical Complex, the press service said.

TVEL also expects to receive a 100-percent stake in Tochmash Vladimir Production Association, Kovrov Mechanical Plant, OKB-Nizhny Novgorod, Tsentrotekh-SPb, Novouralsk Scientific and Construction Centre, Novouralsk Appliances Plant, Novouralsk Gas Centrifuge Plant, and Russian Gas Centrifuge Engineering Centre, which includes producers of gas centrifuges and other equipment for isotope separation, the press service said.

Rosatom expects to complete the corporate procedures necessary to set up the fuel company in 2010, the press service said.

Gas supplies to Makhachkala disrupted by trunk pipeline explosion

http://www.itar-tass.com/eng/level2.html?NewsID=14521611&PageNum=0

11.11.2009, 23.40

MAKHACHKALA, November 11 (Itar-Tass) -- A trunk gas pipeline was blown up in Dagestan on Wednesday.

“The incident occurred at about 22:00 Moscow time. The explosion damaged the pipeline. Gas supplies to Makhachklala and adjacent settlements have been stopped,” the regional branch of the Federal Security Service (FSB) said.

“At about 21:00 Moscow time, security service officers found an explosive device during a routine check… FSB sappers were called in. But the explosive device was activated before they arrived,” the same source said.

The scene of the incident has been cordoned off. The investigation is under way.

Policeman killed in southern Russiahttp://www.kyivpost.com/news/russia/detail/52590/

Today at 10:17 | Associated Press

MAKHACHKALA, Russia (AP) — A spokesman for Russia's Interior Ministry says a police officer has been killed and another one has been wounded by gunmen in a volatile southern province near Chechnya.

Mark Tolchinsky says the attackers were driving a vehicle and opened fire at a police checkpoint in the province of Dagestan late Wednesday. The incident occurred in the town of Khasavyurt close to the administrative border with Chechnya.

Tolchinsky said militants also staged an explosion late Wednesday that disrupted natural gas supplies to regional capital Makhachkala.

Chechnya and neighboring provinces have remained mired in violence stemming from wars between separatist Chechen rebels and the Russian government.

PROFILE

The softer handhttp://www.washingtonpost.com/wp-dyn/content/article/2009/11/11/AR2009111127421.html

Ingushetia's president pledged to stop abuses against rebels, but violence on both sides persistsBy Philip P. PanWashington Post Foreign Service Thursday, November 12, 2009

MAGAS, RUSSIA -- When the Kremlin appointed him president of Ingushetia, Yunus-Bek Yevkurov promised a new approach to fighting the Islamist insurgency that has made this splinter of land the most volatile of Russia's Muslim republics.

His predecessor tried to crush the rebels with a campaign of torture, abductions and killings. But Yevkurov pledged to rein in the government's security forces, saying their abuses were helping the rebels attract recruits. He reached out to human rights groups and his pro-democracy critics. And he offered a limited amnesty to the militants.

Now, a year after taking office, Yevkurov and his experiment in moderation are at a crossroads. Instead of retreating, the insurgents have stepped up their attacks, while the security services continue to kidnap and kill with impunity, activists say. With the assassination of a leading opposition figure last month, public anger is climbing toward a boiling point.

There's a lot riding on Yevkurov, who represents an alternative to Moscow's traditional emphasis on heavy-handed security tactics in the troubled North Caucasus. If he falters, the government is likely to clamp down again, strengthening local autocrats such as Ramzan Kadyrov, the Kremlin's strongman in neighboring Chechnya, and risking a full-scale war. But if he succeeds, Russia's leaders might see a way to end the cycle of violence that has made the region a human rights disaster zone and an obstacle to serious reform of the nation's security services.

Yevkurov himself acknowledges that he has yet to make much of a difference. "There is nothing special to boast of," he said at a news conference Tuesday devoted to his first year in office. "Everybody hoped that Yevkurov would come and it would all be settled. But, as we can see, this has not happened."

A career soldier, war hero and native son of Ingushetia, Yevkurov, 46, is one of the few regional governors in Russia appointed by President Dmitry Medvedev, who has struggled to set himself apart from his powerful patron and predecessor, Vladimir Putin, now the prime minister.

Hopes soared when Yevkurov took office, in part because his predecessor, Murat Zyazikov, a former KGB official with ties to Putin, was so unpopular. Yevkurov promised to attack rampant corruption, resettle refugees from the region's wars and investigate crimes by the security forces.

But in June, a suicide bomber struck Yevkurov's motorcade, putting him in a coma. Two months later, as he prepared to leave the hospital, another suicide attack leveled a police station, killing at least 24 people and injuring 200 others. The fate of his effort to defeat the insurgency by wooing the public suddenly seemed uncertain.

In an interview at his heavily guarded presidential palace, Yevkurov covered burns on his hands as he vowed to stay the course. "I don't have any anger or wish for revenge," he said softly. "On the contrary, I want to continue a dialogue with the public, including the criminals, so that they realize what they are doing and take the right track."

He said he will continue "doing things completely differently" from his predecessor, who employed harsh security measures and was fired by Medvedev after a public outcry over the killing of a prominent opposition figure.

After the slaying of another opposition leader, Maksharip Aushev, last month, though, critics are asking whether Yevkurov has the clout to stand up to the security structures, which even he has acknowledged may have been involved.

"The situation isn't getting any better. In fact, it's getting worse," said Magomed Mutsolgov, director of the human rights group Mashr, which assists people whose relatives have been kidnapped or killed by the authorities. He said killings and abductions have continued, but he praised Yevkurov for meeting regularly with activists and allowing them to publish newspapers critical of the government.

"I can see he wants to change things," Mutsolgov added. "Unfortunately, he doesn't have full control over the security forces, because they report to federal structures, to Moscow." Some also answer to Kadyrov, whose Chechen units are increasingly active in Ingushetia, he said. Yevkurov has gone out of his way to meet with families whose loved ones have disappeared, but many have given up on him. "I've met with him four times and spoken on the phone with him twice. He's always warm, but there have been zero results," said Ilyas Malsagov, 38, whose brother, an architect and devout Muslim, was seized by uniformed men wearing masks in December and has not been seen since.

Yevkurov insisted he has full authority over the security forces and agreed that more needs to be done to limit and punish their excesses. But he accused families of not being honest about why the security forces might have targeted their relatives and suggested that harsh tactics against "terrorists and bandits violating the law with weapons in their hands" are sometimes justified.

Yevkurov appeared most frustrated by his failure to stamp out corruption. He said the officials who steal state funds are making protection payments to the rebels, strengthening the insurgency with money intended to defeat it. Meanwhile, his efforts to crack down have been stymied by corrupt courts, he said.

Musa Pliyev, an aide to Yevkurov who resigned after Aushev's death, said the governor is surrounded by corrupt officials trying to sabotage him. Aushev was among many who urged him to begin cleaning house by firing the province's top prosecutor, judge and security officials.

"I feel sorry for Yevkurov," the opposition leader said in an interview before he was killed last month. "He's an honest person. He's making enemies among both the guerrillas and the corrupt officials.

"He's working hard, but he can't do it alone."

Yunus-Bek Yevkurovhttp://www.washingtonpost.com/wp-dyn/content/article/2009/11/11/AR2009111127422.html

Thursday, November 12, 2009

Born: Tarskoe, Russia, 1963, in the disputed Prigorodny region, scene of ethnic clashes between Ingush and North Ossetian militias in the early 1990s.

Military rank and background: Colonel and paratrooper. Graduate of Ryazan School for airborne troops, Frunze Military Academy and the General Staff Academy.

Early claim to fame: Led the "dash to Pristina" in 1999, when Russian peacekeepers seized an airport in Kosovo before advancing NATO forces could occupy it, giving Moscow greater leverage in the diplomatic endgame to the Bosnian war.

Award: Hero of Russian Federation, the nation's highest honor, for leading an operation to rescue soldiers captured by rebels during the second Chechen war.

Authorities say 4 militants killed in Chechnyahttp://www.etaiwannews.com/etn/news_content.php?id=1105834&lang=eng_news

Associated Press 2009-11-12 03:32 AM

Police and security forces killed four militants and apparently wounded an Arab militant Wednesday in Russia's war-scarred Chechnya province, authorities said.

Government forces fought with about 10 gunmen in the Shali district, Chechen Interior Ministry spokesman Magomed Deniyev said.

Fighting persists in Chechnya nearly a decade after the end of large-scale battles in the separatist wars that devastated the mostly Muslim province in the 1990s.

It has also spread to neighboring provinces in Russia's restive Caucasus. In Dagestan, east of Chechnya, a bomb blast damaged a gas pipeline late Wednesday, cutting off supplies to much of the provincial capital, Makhachkala, and an officer was killed when gunmen fired at a police post in the town of Khasavyurt, the Interfax news agency reported.

In Chechnya, Deniyev said four militants were killed and authorities believe an Arab militant leader known as Yasir was wounded but avoided capture, fleeing into the forest with other survivors. Deniyev reported no casualties among government forces.

He said Chechnya's Moscow-backed president, Ramzan Kadyrov, was leading an operation to "find and completely destroy" the militant group.

Separately Wednesday, Kadyrov's office said Russian President Dmitry Medvedev has granted Kadyrov the rank of police major general _ an honor for the strongman whom human rights activists blame for what they say are widespread abuses in Chechnya. Kremlin officials could not immediately be reached for comment late Wednesday.

Kadyrov recently won a libel suit he filed against a human rights activist who said Kadyrov bore responsibility for the July abduction and killing of Natalya Estemirova, a prominent activist in Chechnya whose death prompted international indignation.

Five gunmen destroyed, Arab mercenary wounded in Russian FSB, Interior Forces operation in Chechen Republic http://www.axisglobe.com/article.asp?article=194511.11.2009A group of gunmen, supposedly headed by an Arab mercenary Yassir, was blocked in the outskirts of the Serzhen-Yurt village, Shali district, of Russia’s Chechen Republic by the security forces this morning, radio Ekho Moskvy reports, referring to news agency ITAR-TASS. Five gunmen were destroyed in a shootout, according to Chechen law-enforcement official talking to ITAR-TASS today. According to preliminary information, Yassir has been wounded. He has been involved in preparing and masterminding the attacks by suicide-bombers in Chechnya, according to the official. The remaining gunmen are trying to escape in a wooded highland area; the operation to neutralize them, involving agents of the Federal Security Service (FSB) and Interior Ministry, has been continuing, ITAR-TASS reports. Russian Federal Security Service arrested suspected members of human trafficking ring The Russian Federal Security Service (FSB) has arrested eight suspected members of a human-trafficking ring, news agency RIA Novosti reports. Members of the group that sold “hundreds of girls” into sexual slavery in Italy, Spain and Greece and was headed by a woman from the Kostroma region in central Russia, earned at least €2,000 per girl, according to the Russian Prosecutor General’s office. Another six members of the ring were “caught red-handed” and arrested abroad, the state-run news agency notes, referring to the Federal Security Service which expanded that an additional 20 people had been identified as part of the group.

Christian Science Monitor: Talk to the editor: Who’s in charge of Russia? http://features.csmonitor.com/connectingthedots/2009/11/11/talk-to-the-editor-whos-in-charge-of-russia/

By John Yemma | 11.11.09

Join us Thursday at 1 pm EST for a conversation with the Monitor’s Moscow correspondent, Fred Weir. We’ll ask what exactly is the relationship between Vladimir

Putin and Dimitri Medvedev? They’ve cast themselves as the two amigos, and Putin has long been thought to be the guy calling the shots. But lately there’s talk that Medvedev is establishing his own authority. Can Russia, which has a long history of powerful autocrats in the Kremlin, really have two leaders at the helm? Can any nation?

We’ll also discuss relations between Russia and the West, especially the US.  Eighteen years after the collapse of communism , Russia seems to be trying to reassert itself. It has troops in Georgia, has induced the US to alter its missile shield plan for Eastern Europe, and has asserted its interests in its “near abroad” — from Ukraine to Central Asia.

Fred has lived in Russia for 23 years. He has seen communism collapse, the disruption of shifting to a market economy, the era of robber barons, and a surge in prosperity based on oil wealth. He knows the ins and outs of this sprawling, changing nation.

The conversation will be webcast in this blog via Ustream. You can watch it live here.

Send your questions to us:

- via Twitter at #csmonitor

- by posting on the Monitor wall on Facebook.

- by submitting a comment below

Ustream will be featuring the 1 pm Thursday webcast live on its site (we’ll embed it on this blog afterwards so you can catch up if you missed the webcast). You can also download a Ustream application for your iPhone at the Ustream site.

Moscow lives up to N- commitments on Iran: Russian envoy

http://www.isna.ir/ISNA/NewsView.aspx?ID=News-1437759&Lang=E

ISNA - Tehran Service: Islamic Parliament

Service: Islamic Parliament 1388/08/21 11-12-2009 12:03:08 News Code :8808-04498

TEHRAN (ISNA)-Russian ambassador to Iran Alexander Sadovnikov said his country lives up to its nuclear and technical commitments on Iran. In a meeting with the Head of Iran's Parliament National Security and Foreign Policy Commission Alaeddin Boroujerdi in Tehran, Sadovnikov said, "no rumor on Russia's going back on its promises is true."

He also said, "Iran as any other member of Non-Proliferation Treaty (NPT) has the right for employment of peaceful nuclear energy and Russia supports this right." "Russia considers the Islamic Republic of Iran an important country in the regional and international scenes and it is determined to boost relations with the country." He also submitted a letter of invitation from Duma's Foreign Relations Committee to Boroujerdi to pay a visit to Moscow. Boroujerdi on his part highlighted the significance of strategic relations between the two neighbors and said a new outlook based on confidence and interaction should be opened in nuclear talks between Iran and the West and that the path of building and securing confidence in talks process is not one-sided. He continued Iran must be assured of honesty and confidence of these countries on its nuclear issue. End Item

Iran calls on Russia to fulfill missile sales dealhttp://www.reuters.com/article/worldNews/idUSTRE5AB1A920091112

Thu Nov 12, 2009 4:21am EST

TEHRAN (Reuters) - Russia should honor a contract to sell a missile defense system to Iran and not bend to outside pressure, the Islamic Republic's defense minister said in remarks published on Thursday.

Russia, which is under Western pressure to distance itself from Iran, has not followed through on proposals to supply high-grade S-300 air defense missiles.

Secretary of State Hillary Clinton praised Russia last month for not providing the arms to Iran, which is at odds with the West over its nuclear and missile programs.

Israel says the S-300 systems could be used to defend Iranian nuclear facilities against potential air strikes.

Defense Minister Ahmad Vahidi said Iran had a contract with Russia to buy the missile system.

"In connection with the purchase of S-300, we have a contract with Russia and I do not think it would be suitable for Russia to be seen as an uncertain partner in the world," Vahidi said in remarks published in Siyasat-e Rouz newspaper on Thursday.

Moscow "should honor the contract and not be influenced by the Zionists ... of course we are hopeful the issue will be resolved as soon as possible," Vahidi said. Iran usually refers to Israel as the "Zionist regime."

Vahidi's comments were initially carried by Iran's labor news agency ILNA.

An influential Iranian parliamentarian, Alaeddin Boroujerdi, earlier this week also said Russia should keep its word on selling the missile system to Iran.

Russian Deputy Prime Minister Sergei Ivanov said last month "there have been no such deliveries to date."

The truck-mounted S-300PMU1, known in the West as the SA-20, can shoot down cruise missiles and aircraft. It can fire at targets up to 150 km (90 miles) away and travel at more than two km per second.

Israel, which is thought to have the Middle East's only atomic arsenal, has hinted it could attack Iran in an effort to stop it obtaining nuclear weapons.

Iran, which says its nuclear program is aimed at generating electricity, has threatened to retaliate for any attack by firing medium-range missiles at Israel.

Russia, a veto-wielding permanent member of the U.N. Security council, has backed three sets of mild U.N. sanctions against Iran since 2006. But it has so far blocked any stronger measures.

(Reporting by Hashem Kalantari; writing by Fredrik Dahl; editing by Robin Pomeroy)

Russian steel exports to Iran surge in 9 monthshttp://steelguru.com/news/index/2009/11/12/MTE5OTM1/Russian_steel_exports_to_Iran_surge_in_9_months.html

Thursday, 12 Nov 2009

It is reported that this year Iran is the largest buyer of Russian steel. By results of the first three quarters of current year the shipments resulted to 3.366 million tonnes by 55% more than a year before for the same period.

However it is hardly possible to say that Russian companies are well aware with Iranian steel market as well as Iranian businessmen do not know all opportunities of potential Russian partners.

Iran Metallurgical Conference held in Tehran, Iran, on November 2nd to 3rd 2009 by Rusmet group with support of a number of partners in Iran, Russia and other countries, aimed to deepen knowledge of each other to establish and strengthen business connections between companies. As it seems to us, the aim has been achieved. A sufficient assistance to do that has been made by Iran-Russia Joint Chamber of Commerce. The session has been opened by its President, Mr A Asgarolladi and Mr G Ghiafeh Vice President has been an irreplaceable presenter at the conference. Also the Economical Cooperation Group Co, particularly its affiliate company, Iran Steel Service center, has invited Iranian delegates and made some necessary arrangements, as well as Russian Embassy and Trade Mission in Iran and Iran Embassy in Moscow.

The conference has risen a great interest in Iran. It has been the first opportunity for many local steel companies for the last thirty years to meet each other at such an event to exchange opinions and discuss industry problems. Even while the speech of one of Iranian speaker a lively discussion in the Presidium has been started to some extend it was an extemporary panel discussion. There were over 120 delegates at the conference, most of them from Iran or Iranian representatives of foreign companies. It is hardly possible to count how many business meetings have been made between Russian, Ukrainian, Iranian and other countries representatives during the conference. We have been regularly asked by Iranians who can they meet for example to purchase 10,000 tonnes of billet.

Actually billet is the hottest Russian steel product in Iran. In the first three quarters it has been shipped 1.7 million tonnes of billets from Russia there, so it is over 50% of total Russian steel exports to Iran. There are a lot of rerolling mini mills in the country most of them are located in the North close to the Caspian ports. Simultaneously, there is a poor availability of domestic billet at the market.

In general Iran is perspective for Russian steel: the country keeps on development of non oil industries and infrastructure. However, one of non oil industries Iran actively develops is steel making. Last year it has been commissioned several projects for steel smelting and rolling in Iran. Currently total crude steel capacities of Iran are estimated at 17 million tonnes annually and by 2012 according to Iranian experts it should be over 22 million tonnes per annum.

Steel consumption in the country grows rapidly by high rates, with maximum demand to be kept further in more economically advanced provinces at the North of the country. Transport connections in the country are not as good as desired to be: in 2005 total length of railways was 8300 kilometers only so it is still more profitable to import steel products then to transport it from other parts of the country.

The largest local market is Tehran a 15 million megalopolis and essential industrial center. There is plenty of construction in the city however some of the projects are stopped. Nevertheless, by words of Iranian steelmakers, it is expected that government recommence financing of many construction projects in the end of the year, so the demand is also expected to go upwards.

At the closing session Iranian representatives repeatedly noted that such conference should be arranged on the annual basis. This coincides with our intentions. And we hope Iran Metallurgical Conference 2010 will gather even more participants.

(Sourced from Rusmet.ru)

 

Is Russia's Iran policy changing?http://www.hurriyetdailynews.com/n.php?n=is-russia8217s-iran-policy-changing-2009-11-11

Wednesday, November 11, 2009HABİBE GÜLER

We are witnessing a very active period in terms of international politics. Especially with U.S. President Barack Obama’s attitude, which tends to try and solve international problems via cooperation with other actors, foreign-policy issues have been brought to the top of the agenda.

It has also been claimed that U.S. Secretary of State Hillary Clinton is leaving behind doctrines and labels with new thinking that includes “partnership, engagement and common interests.” Moreover, attention is also being drawn to the possible consequences of this active period on the foreign policies of some specific actors.

Secretary Clinton visited Moscow last month and met with her counterpart Russian Foreign Minister Sergei Lavrov, as well as President Dmitry Medvedev. Clinton’s statements after the meeting gave the impression that “Russia will change its foreign policy toward Iran.” The West has not hesitated in announcing that Russia is changing its policy toward Iran and that by doing so, Russia and the United States will have a common point of view on Iran.

President Obama’s decision to scrap plans to base elements of a missile-defense system in Poland and the Czech Republic was widely billed as the first concrete step in the eagerly expected “resetting” of relations. In other words, Obama’s decision on the missile-defense system was expected to encourage Russia and the U.S. toward further cooperation in many areas, including Iran.

Nevertheless, Medvedev’s statement in New York that “sanctions are rarely productive, but sometimes are inevitable” also paves the way for people to think that Russia will change its longstanding policy of not supporting sanctions for Iran.

Secretary Clinton and Foreign Minister Lavrov had an opportunity to discuss the progress on a successor agreement to the Strategic Arms Reduction Treaty, or START, cooperation on nonproliferation and counterterrorism. Since the most important of those issues for the Americans was Iran, this was undoubtedly the most emphasized topic during the meeting.

Considering that both sides are willing to reduce strategic arms and fight against terrorism, it is not surprising to see Iran on the agenda. However, observing the positive atmosphere of goodwill properly is vitally important. In other words, Medvedev’s declarations need deliberate evaluation.

There are several reasons for this evaluation. First, no one should forget that Russia holds a key position in Iran’s nuclear activity by constructing the Bushehr nuclear reactor and supplying its fuel. Accordingly, Russia already is a part of Iran’s nuclear activity. Moreover, Russia is Iran’s only partner in the nuclear field. So, Russia’s choosing to not damage its special position in Iran would not be surprising.

Second, Russia has good relations with both Iran and international actors that are suspicious of and concerned about that country’s nuclear plans. So while Russia’s position has not reached the level of “mediator,” it has this potential. From this point of view, Russia would choose not to risk its special position by carrying out hostile policies toward Iran. Considering those two factors can yield a better understanding of whether Russia’s policies toward Iran will change.

Obama’s critical decision on the missile-defense system and declarations of goodwill have led many to expect a foreign-policy shift that would prompt a transition from rhetoric to action and further steps of cooperation from both Russia and the United States. Yet Medvedev clearly said that diplomacy must be the priority with Iran.

Therefore, expecting a Russian foreign-policy shift would mean overlooking Russia’s strategic role in Iran’s nuclear activity. On the other hand, it can be expected that Russia will refrain from following hostile policies toward Iran. As mentioned before, this has not only economic but also political consequences. As long as Russia continues to hold this special role in Iran’s nuclear field, it would not be appropriate to expect a radical shift in its foreign policy toward Iran.

Lastly, resetting “historically distrustful” relations between Russia and the United States will probably take some time. There may be a long-term process of confidence building. Since building trust takes time, Russia-U.S. cooperation will also take time, especially on issues such as Iran on which the perceptions of the White House and the Kremlin do not align.

* Habibe Güler is a researcher at the Ankara-based International Strategic Research Organization, or USAK.

Germany dismisses criminal case against Russian businessmanhttp://en.rian.ru/world/20091112/156801407.html

02:3412/11/2009

BERLIN/MOSCOW, November 12 (RIA Novosti) - German prosecutors have dropped criminal charges against Russian businessman Dmitry Kovtun who was suspected of illegally trafficking radioactive materials, Kovtun's lawyer said.

Kovtun was a key witness in the 2006 murder of Russian security service defector Alexander Litvinenko. German police said at the time they were certain Kovtun had

come into contact with radioactive polonium, the substance used to poison Litvinenko, before flying to Britain.

"The criminal case in Germany has been closed," Wolfgang Velov said on Wednesday after receiving an official notification from the German prosecutors.

Kovtun has hailed the decision of the German authorities as "the triumph of justice."

"We finally see how justice ultimately prevails...I have been cleared of all charges. I was always certain of the outcome of this case in Germany," he said.

The businessman expressed hope that Britain would also drop criminal charges against his business partner Andrei Lugovoi, London's main suspect in the Litvinenko murder case.

The murder of Litvinenko, an outspoken Kremlin critic who had received British citizenship soon before his poisoning, caused a major diplomatic fallout between Russia and Britain over Moscow's refusal to extradite Lugovoi, citing the Constitution.

Lugovoi, a former KGB operative who owns a multi-million dollar private security firm, was elected to Russia's parliament in December last year, as a member of the ultra-nationalist Liberal Democratic Party. His status as a lawmaker gives him immunity from prosecution in Russia.

"I always believed that the case against us was a bit too thin," Kovtun said.

Dropping of charges against Litvinenko murder suspect must charge course of investigation – Lugovoihttp://www.interfax.com/3/529014/news.aspx

MOSCOW. Nov 12 (Interfax) - The fact that Dmitry Kovtun, one of thetwo men suspected by British authorities of killing former FSB officerAlexander Litvinenko in London, has been cleared of all charges inGermany must radically change the course of the investigation into theLitvinenko case, said Andrei Lugovoi, a Russian State Duma deputy, whomBritish authorities view as the prime suspect in mastermindingLitvinenko's murder. "The new circumstances are eroding the British investigation intothe Litvinenko case, and we demand that London conduct a new andimpartial investigation into the Litvinenko case in these newcircumstances," Lugovoi said in an interview with Interfax on Thursday. "The provocation has failed, and it is time to switch fromcriticism to constructive steps in the Litvinenko case," he said. Lugovoi said he fully supports Russian Foreign Minister SergeiLavrov's recent statement that Russia expects the United Kingdom toreset British-Russian relations.

Lugovoi said Kovtun and he had expected to receive the documents ondropping the charges against the latter from Germany. "We will carefullystudy everything and promise to familiarize journalists with new detailsemerging in the Litvinenko case," Lugovoi said.

Polonium not detected? Russian suspect cleared of chargeshttp://www.russiatoday.com/Top_News/2009-11-12/suspect-litvinenko-cleared-nuclear.html/print

12 November, 2009, 08:59

German prosecutors have dropped all charges of illegally trafficking nuclear materials against Dmitry Kovtun, who was linked to the murder of former Russian security officer Aleksander Litvinenko in London in 2006.

That's according to his lawyer, Wolfgang Vehlow.

On Wednesday, Vehlow received a written notification from the prosecutor’s office in Hamburg that Kovtun’s case had been closed and the investigation stopped.

"I was ready for the case to be closed,” Kovtun told RT. “I heard rumors a month ago, but I was waiting for written proof. And now my lawyer in Germany has it and I will receive it tomorrow. I was accused of illegal transportation of nuclear materials – this is nonsense; it’s like accusing someone of transporting swine flu, for example."

The German prosecution filed a criminal case against the Russian businessman, who was suspected of smuggling nuclear materials after traces of polonium 210 were reportedly found at his house in 2006.

Kovtun was one of the three people who visited Litvinenko in the London hotel Millennium on the day Litvinenko was allegedly poisoned. This led to media suspicions of his participation in Litvinenko’s murder, but Kovtun was never officially accused in the poisoning.

He was questioned in connection with the case by British investigators, but the businessman denied any involvement in Litvinenko’s death and said he himself was a victim of poisoning. After his return from London, Kovtun was hospitalized with symptoms of poisoning by nuclear materials similar to those that killed Litvinenko. Russia’s Prosecutor General’s Office opened a criminal investigation into his attempted murder.

"The case against me and against Andrey Lugovoy was a bit too thin and doctored up by certain circles in England, and, as the German experience shows, fell apart like a snowball when examined impartially," Kovtun said after hearing the latest news.

"The decision of the German prosecutor's office is not only the first step toward full rehabilitation of me and Andrey Lugovoy, it has also taken a cornerstone out of the charges against Andrei Lugovoy in England that will also collapse as the Berlin Wall did," Kovtun added.

Lugovoy's lawyer, Andrei Romashov, agreed with Kovtun’s assessment.

"Clearly, this decision to drop charges against Kovtun in Germany is a positive move,” Romashov said.” Apparently, people understood over time that we were right because this [case against Kovtun] was one of the elements of the British investigation plan that was based on the radioactive material transportation route. Now we can see that it is not so at all.”

Lugovoy, who was Kovtun’s business partner and is now a Russian State Deputy, remains Britain’s main suspect in the Litvinenko murder case. London continues to demand his extradition, with Russia continuously refusing the requests, saying his extradition would go against the constitution of the country.

Russian officials have suggested several times to Britian to present evidence of Lugovoy’s guilt, so that they can conduct an investigation in Russia. But Britian has yet to do that, according to Russian law enforcement. During the three years since the former Russian security officer died in London, British officials have yet to officially declare a cause of death, or to publish results from the autopsy.

Russia to develop nuclear-powered spacecraft for Mars missionhttp://en.rian.ru/analysis/20091111/156797969.html

19:1411/11/2009

MOSCOW. (Yury Zaitsev, for RIA Novosti) - At its recent meeting, the Presidential Commission for Modernization and Technological Development of Russia's Economy called for developing a transport-energy module with a megawatt-class nuclear propulsion unit.

President Dmitry Medvedev approved the project and promised to find funding for it. Analysts say Russia could restore its status as a leading space power if it scores a breakthrough with nuclear propulsion.

Past experience shows that such expensive technology is extremely difficult to develop. The United States and the Soviet Union tried hard to make commercial nuclear propulsion units. The U.S.S.R. came up with the 11B91 experimental nuclear engine, while the U.S. developed the NERVA (Nuclear Engine for Rocket Vehicle Application) system developing a thrust of about four tons.

Soviet and U.S. nuclear spacecraft programs were marred by a number of accidents.

In April 1964, a U.S. Navy Transit navigation satellite with a radio-isotopic generator onboard failed to reach orbit and disintegrated in the atmosphere, spewing out over 950 grams of plutonium-238. This was more than the total amount of plutonium released during all nuclear explosions by 1964.

In January 1978, Kosmos-954, a Soviet Radar Ocean Reconnaissance Satellite (RORSAT) with a nuclear reactor onboard reentered the atmosphere, after the satellite's reactor core failed to separate and boost it into a nuclear-safe orbit, and fell in Canada, contaminating 100,000 sq. km. of its territory.

In February 1983, the nuclear-powered Soviet satellite Kosmos-1402 went down in the South Atlantic.

The most serious threat involved Cassini-Huygens, a joint NASA/European Space Agency/Italian Space Agency robotic spacecraft mission currently studying the planet Saturn and its many natural satellites, that was launched on October 15, 1997 and which made a gravitational-assist flyby of the Earth on August 18, 1999.

The spacecraft, which had a nuclear reactor with 32.7 kg of plutonium-238, passed only 500 km above the Earth. Up to five billion people could have got radiation poisoning had the spacecraft plunged into the atmosphere.

On February 10, 2009, the Iridium-33 telecommunications satellite owned by U.S. company Iridium Satellite LLC and its defunct Russian equivalent, the Kosmos-2251 with a nuclear propulsion unit, collided over northern Siberia. This resulted in potentially hazardous space debris.

At present, 30 Russian and seven U.S. spacecraft with nuclear systems onboard are orbiting the earth at 800-1,100-km altitudes, where similar collisions can take place. This makes up for about 40 "potential nuclear explosions."

If any of these satellites hits a fragment of space junk, it will slow down and eventually re-enter the atmosphere, spewing radiation above the Earth and on its surface.

Since the 1978 Kosmos-954 crash, the Scientific and Technical Subcommittee of the United Nations Committee on the Peaceful Uses of Outer Space has always focused on the use of space-based nuclear reactors.

Its survey formed the basis for the UN General Assembly's December 1992 resolution entitled "Principles Relevant to the Use of Nuclear Power Sources in Outer Space."

According to the resolution, nuclear reactors can be used in outer space only when their usage is absolutely indispensable, and after their space mission is fulfilled the spacecraft equipped with nuclear reactors should be placed on sufficiently high orbit. "...The sufficiently high orbit must be such that the risks to existing and future outer space missions and of collision with other space objects are kept to a minimum."

At the turn of the century, part of the international scientific community decided that it was impossible to explore outer space without nuclear engines and reactors, which could be used to accelerate inter-planetary spacecraft and to supply them with energy.

This conclusion was based on the apparent lack of alternatives for conducting manned inter-planetary missions.

Scientists must find a way to ensure the radiation safety of nuclear propulsion units, including possible accidents. This problem has proved to be extremely difficult to resolve, unlike similar work on the reliability of nuclear reactors.

Moreover, nuclear rocket engines emit powerful radioactive exhaust jets streams making it impossible to test and upgrade them on Earth. Consequently, it is still unclear whether inter-planetary spacecraft should be fitted with nuclear rocket engines or solar-powered electric propulsion units.

Yury Zaitsev is an academic adviser with the Russian Academy of Engineering Sciences.

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

Russia seeks to remove superlatives from ad campaigns http://en.rian.ru/russia/20091112/156803613.html

08:5112/11/2009

MOSCOW, November 12 (RIA Novosti) - Russia's federal antitrust body has suggested making it illegal for companies to use superlatives in advertising campaigns for products and services, a deputy director of the organization said.

The Federal Anti-Monopoly Service (FAS) constantly comes across statements by producers that say their products or services are "number one" in popularity on the Russian market.

"We suggest banning the use of the words 'first,' 'best,' 'superb,' 'number one,' and [other superlatives] we have found in the dictionary," Andrei Kashevarov said on Wednesday.

According to Kashevarov, exclusions would be made for companies registered in Russia that have the words in their official names. As an example, Kasherov named Channel 1 TV and First Trucking Company as being exempt from the advertising rule because the names of the companies are registered trademarks.

Putin Ranked One of World’s Three Most Influential Peoplehttp://english.pravda.ru/russia/politics/12-11-2009/110444-putin-0

12.11.2009

Russian Prime Minister Vladimir Putin appears in the top three of world’s most influential men according for Forbes magazine. The magazine published the list of 67 most influential politicians, businessmen and other influential individuals.

The most influential person in the world is – what a shocker – US President Barack Obama. The magazine gave the second place to China’s Hu Jintao. Russia’s Vladimir Putin comes third.

The top five continues with Ben Bernanke, the chairman of the US Federal Reserve System, and Google’s founding fathers Sergey Brin and Larry Page. The top ten closes with Microsoft’s head Bill Gates, includes media tycoon Rupert Murdoch and Saudi Prince Abdullah bin Abdul Aziz Al Saud.

Russian President Dmitry Medvedev is ranked 43rd on the list, being behind practically all influential leaders of European states. Italy’s Silvio Berlusconi is ranked 12th, German Chancellor Angela Merkel – 15th, British Prime Minister Gordon Brown – 29th. The only European leader that is placed below Medvedev on the list is French President Nicolas Sarkozy, who comes 56th.

Strangely enough, Forbes placed al-Qaeda’s elusive leader Osama bin Laden on the 37th place. North Korea’s Kim Jong-il comes 24th and Mexican drug lord Joaquin Guzman – 41st.

The last, 67th place on the list is taken by Venezuelan President Hugo Chavez.

The World's Most Powerful People

Igor Sechin: The Kremlin's Oil Manhttp://www.forbes.com/2009/11/09/igor-sechin-rosneft-leadership-power-09-oil.html

Heidi Brown, 11.11.09, 06:00 PM EST

Vladimir Putin keeps a close eye on Russia's vital oil sector through a man who has proved his loyalty--but also has his own interests at heart.

He's been depicted as Darth Vader in the Russian press and described as "the scariest person on Earth." Igor Sechin's official title is deputy prime minister, but within Russia, many consider him the most powerful individual in the country after Vladimir Putin. (Yes--that means he's more influential than the president.)

Sechin, who oversees the country's abundant natural resources, reigns over the storied Kremlin faction known as the siloviki--roughly, "powerful ones"--which includes the military and intelligence services. These men believe the state should control access to natural resources, and were against the appointment of Dmitry Medvedev to the presidency. An increasingly vocal cadre of pro-Medvedev cabinet ministers, some

reform-minded, have made moves to quell the influence of the siloviki. But Sechin has, so far, kept his grip on power.

There is little solid information about the man. Like many of Putin's cronies, Sechin is a St. Petersburg native. In the 1990s he worked in city government. Before that, it's widely believed he was a spy; Moscow sources confirm that he was a member of the GRU, the KGB's foreign-intelligence arm. His duties may have included working in Angola and Mozambique, probably as a translator. An American who worked directly with Sechin in the 1990s said Sechin showed utter loyalty to Putin--a fact that is key to his current standing.

Sechin's reputation is of a fearsome protector of the interests of the Russian state, particularly in the oil sector--like his chairmanship of $68-billion (2008 sales) state oil concern Rosneft. He is widely assumed to be a secret shareholder--though, like his presumed work in intelligence, this has never been proved. Sechin did not respond to several requests for comment.

"Does he own a stake in Rosneft? It doesn't matter," says Donald Jensen, a former ambassador to Moscow and consultant to the U.S. government on Russia. "It's more about where the money flows. Money and power and the intelligence services are all mixed together."

A notorious example of this cozy intersection was the Yukos affair. In 2003, then-billionaire Mikhail Khodorkovsky, who had built Yukos Oil into a Western-style firm, was convicted of tax fraud and embezzlement and imprisoned for 20 years (he's currently being tried on new charges). Soon after, Rosneft became the owner of Yukos' assets. Khodorkovsky has publicly accused Sechin of orchestrating the Yukos affair.

Sechin's position as leader of the company--and therefore a proxy of the Russian government--gives him unilateral authority to make moves that benefit Rosneft (and possibly himself).

For example, last month, OGK-1, an energy-generation company Sechin heads, announced it would no longer use Gazprom gas. The move could cost the gas monopoly $600 million. "Sechin is central to this," says Paul Saunders, executive director of the Nixon Center in Washington.

Rosneft also drills in Chechnya in cooperation with a Chechen government oil company. As Russia has attempted to increase its access to Chechnya's high-quality crude and its petroleum transportation network, a number of unusual incidents have occurred over the last few years that improve Rosneft's position, including the seizure of ports, the transfer of oil assets and violence. Rosneft has not been directly implicated in these events.

Sechin's sphere of influence has broadened beyond Russia. In China, he is currently negotiating a 20-year, $25 billion oil-for-loans supply deal. In the last few months he has

also dropped by Venezuela, Cuba and Turkey to talk oil--and to demonstrate that Russia doesn't need the West's money.

With oil prices below their high of $150 in 2008, Putin has recently suggested that Russia might reopen its markets to foreign capital and restructure its state industries. Political analysis firm Stratfor, based in Austin, Texas, says the move could destabilize Sechin's footing in the Kremlin.

Still, Russia's continuing dependence on oil means Sechin will likely maintain a significant hold on his power base.

National Economic Trends

Russia's international reserves up $1.1 bln to $433.9 bln in week http://en.rian.ru/business/20091112/156804496.html

10:3812/11/2009MOSCOW, November 12 (RIA Novosti) - Russia's international reserves comprising gold, foreign exchange and a range of other assets increased by $1.1 billion to $433.9 billion in the week of October 30 - November 6, the Central Bank said on Thursday.

Apart from foreign currency and gold, Russia's international reserves are also composed of special drawing rights (SDRs), a reserve position in the International Monetary Fund (IMF) and other assets.

RenCap: Russia's monetary base widens in October: No danger of inflationhttp://www.businessneweurope.eu/dispatch_text10468

Renaissance Capital, RussiaThursday, November 12, 2009

According to the Central Bank of Russia (CBR), Russia's broad monetary base expanded by almost RUB220bn in October. In terms of composition, commercial banks' deposits with the CBR increased by RUB100bn, as did the volume of rouble-denominated cash.

CBR interventions in the FX market were a large contribution to this aggregate, as the central bank purchased around $15bn, injecting roughly RUB450bn into the economy. Nevertheless, this was offset by very aggressive repayments of commercial banks' liabilities to the CBR in October, with banks redeeming around RUB400bn.

At the same time, we estimate that the monetary base should have increased by RUB225-250bn in September (based on data regarding the cash implementation of the federal budget), due to notable budget-related money emission during the month. We think the

CBR accounted for these funds only this month, as its methodology differs significantly from that of the Ministry of Finance.

Russia's Reserve Fund was not used for budget-deficit financing in October, and we do not expect it to be through to the end of the year. Therefore, we think expansion in the monetary base is likely to be driven by the regulator's FX interventions without pressure on inflation, while banks are redeeming their obligations to the CBR. Before this process is completed, we think the CBR is likely to purchase around $15bn, implying to us that by the end of the year inflation fears on the monetary side will be non-existent.

Anton Nikitin

Business, Energy or Environmental regulations or discussions

Law on energy efficiency has passed the State Duma http://www.businessneweurope.eu/dispatch_text10468

VTB Capital, RussiaNovember 12, 2009

- makes it mandatory to move to RAB for MRSKs (in two years) and for FSK (next year) - positive for MRSKs and FSK

News: The law on energy efficiency has passed through the State Duma, having been approved at the third reading.

Our View: The Law now needs to be approved by the Federal Council and the President. In our view, the last two stages are fairly technical and thus we do not expect them to take very long, nor do we think any changes will be made to the law.

The law makes it mandatory for all electricity distribution companies (MRSKs) created under RAO UES to move to RAB within the next two years, and for FSK to move starting from the next year. We also think that the news is positive for the sector as a whole. We are reiterating our Buy recommendations for all MRSKs and for FSK.

Back to top Dmitry Skryabin

Bloomberg: Rosneft, Polyus Gold, Razgulay: Russian Stock-Market Previewhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=ax.s2DsssRLs

By Anna Shiryaevskaya

Nov. 12 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

The 30-stock Micex Index fell 0.5 percent to 1,316.19 at the close in Moscow after rising for two days. The dollar- denominated RTS Index retreated 0.2 percent to 1,434.45.

OAO Rosneft (ROSN RX): Oil for December delivery rose 21 cents, or 0.3 percent, to $79.26 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Russia’s largest oil producer added 0.3 percent to 244.16 rubles.

OAO Polyus Gold (PLZL RX): Gold surged to a record $1,119.10 an ounce in New York on speculation a decline in the dollar will spark demand for the precious metal as an alternative asset. Russia’s biggest gold producer advanced 2.2 percent to 1,743.61 rubles.

Razgulay Group (GRAZ RX): Sugar futures rose for the first time in six sessions on speculation that the lowest prices of the month attracted buyers concerned that global supplies remain tight. Razgulay, the Russian sugar and grain producer, fell 0.7 percent to 53.604 rubles.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

Last Updated: November 11, 2009 22:00 EST

MSCI includes Inter RAO, Sberbank prefs in index, Rostelecom removed (Part 2)http://www.interfax.com/3/529002/news.aspx

MOSCOW. Nov 12 (Interfax) - MCSI Inc has included ordinary sharesin electricity trader Inter RAO (RTS: IRAO) and preferred shares inSberbank (RTS: SBER) in its MSCI Russia index, the company said in astatement, following its half-year review of its family of indices. Common shares in Rostelecom (RTS: RTKM) were removed. Analysts said they thought Sberbank prefs, shares in retailerMagnit (RTS: MGNT) and shares in Inter-District Grid Company Holding(IDGC Holding) might be included in the index, but they were not. MSCI Inc said preferred shares in pipeline operator Transneft (RTS:TRNF) were included in the Emerging Markets Small Cap index. The biggestadditions to this index apart from the Transneft prefs were China'sDaphne International Holdings and China Metal Recycling. At the same time, the Transneft prefs were removed from the MSCIRussia, where they had a weighting of 0.71%. Rostelecom's weighting inthe MSCI Russia was 0.22%. The Sberbank prefs will make up 0.67% and the Inter RAO shares -0.53% of the index. Gazprom's (RTS: GAZP) weighting in the index falls from 29.39% to29.28%. Silver miner Polymetal (RTS: PMTL) goes up from 0.34% to 0.44%. VTB

Capital analysts said this resulted from the fact that more of thecompany's shares have become available to foreign investors (ForeignInclusion Factor).

TeliaSonera, Altimo to Merge MegaFon, Turkcell Stakes (Update2)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNSPuBRHqdrI

By Diana ben-Aaron

Nov. 12 (Bloomberg) -- TeliaSonera AB, Sweden’s largest telephone company, and Russia’s Altimo agreed to combine their stakes in MegaFon and Turkcell into a new company to improve liquidity and control.

The new company will be listed on the New York Stock Exchange and pay regular dividends, Stockholm-based TeliaSonera said in a statement today. The new company will be established in a western jurisdiction, TeliaSonera said.

TeliaSonera is aiming to increase its control over holdings in the Baltics and Eurasia to increase synergies and secure the flow of profits and dividends. The agreement includes a solution to a legal dispute with Cukurova Holding over a stake in Turkcell, which will now be acquired by Altimo and contributed to the new company without a premium.

“It may take some time before we reach the end result, but the new listed company will have exciting prospects and add value for our shareholders,” TeliaSonera Chief Executive Officer Lars Nyberg said in the statement.

TeliaSonera climbed as much as 2.8 kronor, or 5.7 percent, to 51.10 kronor in Stockholm, the biggest intraday jump since July 24. The stock traded at 50.55 kronor as of 9:12 a.m.

The new company will have more than 90 million subscribers in Russia, Turkey and the CIS, and will expand into new emerging markets, TeliaSonera said.

Altimo, the telecommunications arm of billionaire Mikhail Fridman’s Alfa Group, last month announced a similar deal with Telenor ASA to combine stakes in OAO VimpelCom and ZAT Kyivstar into a new company incorporated in Bermuda and listed on the New York Stock Exchange.

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

Last Updated: November 12, 2009 03:17 EST

TeliaSonera and Altimo combine their ownership interests in MegaFon and Turkcellhttp://newsticker.welt.de/?module=smarthouse&id=966361

erschienen am 12.11.2009 um 06:47 Uhr

Regulatory News:

TeliaSonera and Altimo have agreed to combine their ownership interests by contributing their respective direct and indirect interests in Turkcell and Megafon, into a new company. The new company will be established in a western jurisdiction and listed on the New York Stock Exchange.

The purpose is to create a leading international operator, with over 90 million subscribers in Russia, Turkey and the CIS countries, and with well functioning corporate governance. The new company will focus on developing the operational excellence of Turkcell and MegaFon as well as expanding into new emerging markets.

The main advantages of establishing the new company is that the control over and liquidity of the assets will improve. This will be achieved by simplifying the shareholder structure of both Turkcell and MegaFon, listing the new company, agreeing on a long term dividend policy and paying regular dividends.

Once established, the new company will own a majority of the shares in both Turkcell and Megafon. AF Telecom, the third major shareholder in Megafon, is also invited to join the partnership. Provided AF Telecom joins, TeliaSonera and the Russian investors will have substantially similar ownership and equal influence over the new company.

None of the major shareholders will have the possibility to acquire control over the new company other than by consent of the other major shareholders. The board will include independent board members, who will be able to resolve any deadlocks, if board members nominated by one of the major shareholders have a different opinion from the board members nominated by the other major shareholders. The chairman of the new company will be elected among the independent board members.

Turkcell and Megafon are both efficient and professionally managed mobile operators and regarded as national champions. Therefore, the intention is to continue to manage them as separate operations, irrespective of the changes in their ownership structure. Turkcell and Megafon will both benefit from being part of a major international telecom group with possibilities to extract synergies and share know-how.

TeliaSonera and Altimo have agreed to collaborate and align their efforts to resolve all ongoing legal disputes between each of them and Çukurova Group to make the establishment of the new company possible. Such collaboration is expected to result in a speedy resolution of the disputes.

Subject to their satisfactory resolution, the parties have agreed that Altimo acquires Çukurova Group’s indirect shareholding in Turkcell and contributes those shares to the new company without any premium.

In order to avoid potential future conflicts, the parties have agreed that Altimo will support that TeliaSonera, being the controlling shareholder of Fintur Holdings with a right of first refusal in respect of any sale of the Fintur Holdings shares, acquires 100 percent of Fintur Holdings by buying Turkcell’s shares in the company at fair market value.

The agreement signed between TeliaSonera and Altimo is legally binding, but the transaction is subject to agreement on definitive documentation and regulatory approvals.

Sberbank's loan loss provisions to peak in H1 2010

http://www.rbcnews.com/free/20091112110205.shtml

      RBC, 12.11.2009, Moscow 11:02:05.Sberbank's loan loss provisions are expected to reach their peak in the first half of 2010, the RBC Daily newspaper reported today citing the lending institution's Senior Vice President Denis Bugrov. He stated that the loan loss provisions currently stood at 10 percent of the bank's loan portfolio, and the figure could reach 12-14 percent in the first nine months of 2010. Meanwhile, provided that the macroeconomic figures improve, Sberbank may begin reducing the loan loss provisions.

      With this in mind, Sberbank's forecast is an indirect confirmation that the situation will improve in the beginning of the second half of 2010. Bugrov did not reveal the amount of money the bank could release, however. At the same time, the bank allocated RUB 282bn (approx. USD 9.83bn) in the first nine months of 2009, bringing the total figure to RUB 490bn (approx. USD 17.07bn).

Uncertain future for Russian PVC planthttp://www.europeanplasticsnews.com/subscriber/headlines2.html?cat=1&id=1258014214

By Richard HiggsPosted 12 November 2009 8:23 am GMTUncertainty still surrounds Russia’s giant RusVinyl PVC manufacturing project, the launch of which has now been delayed until 2013.

Originally due for completion in the second half of next year, the plan to build a 330,000 tpa PVC plant in Kstovo, Nizhny Novgorod region was put off further by RusVinyl partners Russian petrochemicals company Sibur Holding and Solvay/BASF partnership SolVin. A start on construction, formerly set to begin this year, was delayed until early 2010.

The cost of the scheme, originally around $944m, has now ballooned to $1.2bn, and RusVinyl’s joint venturers are still awaiting an $864m loan from Russian state-owned bank Vnesheconombank, according to Russian investment news service Marchmont Capital.

The new plant is expected to produce half of all the PVC Russia currently produces. Today, the PVC market is depressed. Russian consumption for the first half of 2009 was forecast at an anaemic 30,000 tons by Finam Management, with a sharp fall of up to 50% in the second half. And results in the first six months have borne out the warning, recalled Marchmont Capital.

Demand is not likely to grow strongly until major markets for PVC like construction and the automotive sector take off again, though by 2013, the picture could be much brighter, Finam suggested.

If the market improves markedly, project managers suggest capacity at the new Nizhny complex, which also includes a 220,000 tpa caustic soda plant, could be expanded. Outline plans show the PVC plant could be increased to 500,000 tpa. The scheme is the region’s biggest industrial development to date.

Polymetal eyes $200-400 mln proceeds from SPOhttp://www.forexyard.com/en/reuters_inner.tpl?action=2009-11-12T090029Z_01_LC392118_RTRIDST_0_POLYMETAL

Friday November 13, 2009 05:00:09 AM GMT

POLYMETAL/

* Proceeds will reduce debt, help investment - CEO

* Current debt about $600 million

By Olga Orininskaya

ALMATY, Nov 12 (Reuters) - Polymetal, Russia's largest silver miner, plans to raise between $200 million and $400 million in a secondary share offering, part of which will be used to repay debt, its chief executive said on Thursday.

Vitaly Nesis said Polymetal also aimed to channel some of the proceeds toward its investment plans, which include a significant increase in gold output at deposits in Kazakhstan and eastern Russia.

"We have a reasonably large amount of debt -- about $600 million -- after our acquisition of the Varvara deposit," Nesis told a news conference, referring to the Kazakh asset purchased by Polymetal this year.

"We want to reduce this debt burden. The second task is to receive money for investment," he said.

Polymetal plans to more than double gold output by 2012 after launching several new projects that will contribute to a continued increase in Russian gold production.

Russia produced about 8 percent of the world's gold in 2008, ranking fifth, and increasing output for the first time after five consecutive years of decline. Production was up again, by 14.6 percent, in the first nine months of 2009.

Market sources told Reuters last month that Polymetal planned to raise about $300 million via the placement of up to 10 percent of its shares in or before March 2010. At the time, the company said it had not made any decision on the secondary placement. (Writing by Robin Paxton; Editing by Jon Loades-Carter)

Activity in the Oil and Gas sector (including regulatory)

Pipeline blown up to the Caucasushttp://www.russia-ic.com/news/show/9207/

12.11.2009The emergency services proceeded with reparation of the pipeline Mozdok – Quasimagomed, blown up last night, on Thursday, November 12, 2009. The explosion happened on the November, 11 at 10. 00 p.m. 40 km southwards from Makhachkala in the Karabudakhkent District of Dagestan Republic.            The security service of the pipeline detected suspicious thing under the pipe about 9 o’clock p.m. and called the specialists from the local department of the Federal Security, but the explosion happened before they came. As a result, the gas supply was broken in Makhachkala suburbia and in some districts of Makhachkala.            The pipeline Mozdok (Northern Ossetia) – Quasimagomed (Azerbaijan) ties the gas transmission system of Russia and Azerbaijan. It suffers from explosion attempts regularly. The last one took place in August.            One more explosion on the gas pipeline was fixed the same day in the same region on the pipeline Baku – Novorossiysk. The pipe was deformed.

ANALYSIS-Russia row pushes Turkmen gas towards new routeshttp://www.forexyard.com/en/reuters_inner.tpl?action=2009-11-12T090315Z_01_LC340701_RTRIDST_0_TURKMENISTAN-RUSSIA-GAS-ANALYSIS

TURKMENISTAN-RUSSIA/GAS (ANALYSIS)

* Turkmenistan pursues diversification after row with Russia

* Nabucco seeks to use momentum

By Olzhas Auyezov

ALMATY, Nov 12 (Reuters) - By halting Turkmen gas purchases for over half a year, Russia has pushed Turkmenistan towards faster diversification of its exports by connecting to routes such as Nabucco.

Central Asia's largest gas producer has already said it was prepared to supply the EU-sponsored pipeline, bypassing Russia, but has not made any formal commitments to the project which has been criticised for lacking of supply sources.

Russia's Gazprom stopped importing gas from Turkmenistan after a pipeline explosion in April which Ashgabat blamed on Moscow. It has since sought to renegotiate supply terms but the two sides have failed to strike a new deal.

"The shutdown in supplies was a significant blow for Turkmenistan as gas exports to Russia make up the lion's share of the country's revenues," said Kaan Nazli, an analyst at Medley Global Advisors (MGA).

"The episode certainly strengthens Turkmenistan's commitment to pursue Nabucco though we see this as a remote prospect in near term."

The agreement Gazprom has sought to renegotiate was seen as lucrative for Turkmenistan and designed to prevent it from pursuing the Nabucco option, Western energy executives say, but backfired on Gazprom when demand -- and prices -- plummeted.

"They chose to sacrifice their reputation rather than look silly and overpay Turkmenistan," said a Western pipeline executive who asked not to be named.

CARTE BLANCHE

But this move also gave Turkmenistan, which produces over 70 bilion cubic metres (bcm) of gas a year, freedom to pursue competing pipelines.

"I think Russia has stopped being so worked up about it," said Alexey Malashenko, a Central Asia researcher at the Carnegie Endowment for International Peace.

"(Turkmen President) Kurbanguly Berdymukhamedov has long positioned himself as a man looking in different directions."

Shortly after the halt, Turkmenistan struck a deal with Iran to more than double exports to its Caspian neighbour and is preparing to launch a pipeline to China next month along with the Iranian link extension.

This will allow Turkmenistan to increase sales to Iran by 12.5 bcm to 20 bcm next year and start pumping 13 bcm a year to China, covering around two thirds of what would have been supplied to Russia in 2010.

Western companies involved in Nabucco are also urging Turkmenistan to begin negototiations with the consortium and with transit nation Azerbaijan on laying the physical export infrastructure.

"Turkmen gas can be transported to European markets via Nabucco by 2014," Wolfgang Sporrer, an OMV executive in charge of the Caspian region, told an investment forum in Turkmenistan last month.

"Preparations for this should also start (now)," he said.

Western companies say Turkmenistan could start Nabucco supplies by linking one of its Caspian offshore fields with an Azeri offshore platform and only later build a fully fledged pipeline across the Caspian.

However, Turkmenistan has not yet initiated any formal negotiations on the pipeline construction. Also, there has not been much progress in the proposed domestic pipeline needed to bring gas to the Caspian coast, MGA's Nazli said.

"That said, Nabucco will remain to be an attractive long-term prospect for Turkmenistan, especially as the recent reshuffle in the energy sector removed many individuals who had built strong relations with Gazprom in recent years," he said. (Writing by Olzhas Auyezov, editing by William Hardy)

TNK-BP May Name Barsky Chief Executive Tomorrow, Vedomosti Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aB9kT_sBWgtM

By Alex Nicholson

Nov. 12 (Bloomberg) -- TNK-BP, BP Plc’s Russian venture, may name Vice President Maxim Barsky to replace billionaire Mikhail Fridman as chief executive officer tomorrow, Vedomosti reported, citing unidentified people familiar with the matter.

To contact the reporter on this story: Alexander Nicholson in Moscow at anicholson6@bloomberg.net

Last Updated: November 12, 2009 00:54 EST

Mikhail Fridman to step down as TNK-BP bosshttp://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/6547127/Mikhail-Fridman-to-step-down-as-TNK-BP-boss.html

The Russian oligarch who took over as chief executive of BP's Russian joint venture TNK-BP following an exodus of British staff is to step down from his temporary role. By Rowena Mason, City ReporterPublished: 8:50PM GMT 11 Nov 2009

Mikhail Fridman, one of four billionaires who own 50pc of the venture, said the company would soon announce a new permanent chief.

The board of TNK-BP will meet to discuss candidates for the job this month, with the industry widely expecting a Russian candidate to take the top job.

It is thought that two newly appointed executives could be in the running: Pavel Skitovich, nominated by BP, and Mikhail Barsky, supported by the Russian investors.

Mr Fridman originally took over at the troubled Moscow-based venture as both sides moved to end a bruising boardroom rift that played out over more than a year.

It started with an acrimonious row between the Russian investors, known as Alfa Access Renova (AAR), and the former chief executive, Robert Dudley. Mr Dudley accused the Russian authorities of harassment and fled the country last year. Tim Summers, another BP man, left as chief operating officer earlier this year. He had been the only senior British executive left at TNK-BP.

Mr Fridman's appointment was perceived as BP's final admission that it was ready to cede influence.

RenCap: Lawsuit challenges Integra's right to Uralmash brandhttp://www.businessneweurope.eu/dispatch_text10468

Renaissance Capital, RussiaThursday, November 12, 2009

Event: Vedomosti reports today (12 Nov) that Uralmashzavod (a Gazprombank/Metalloinvest-controlled joint venture) has filed a lawsuit against Integra, seeking to revoke the latter's right to the Uralmash brand used for its drilling rigs, and requesting compensation of RUB105mn for lost revenues and RUB500mn in costs related to the restart of rig production by Uralmashzavod. Integra acquired URBO, Uralmashzavod's rig-manufacturing division, in 2005, and received the rights to the Uralmash brand as part of the acquisition.

Action: We retain our BUY rating on Integra.

Rationale: Operating under the Uralmash brand, Integra is the leading designer, manufacturer, and supplier of new and upgraded heavy-duty drilling rigs in Russia. We estimate Integra's equipment manufacturing business will account for 18% of its 2009

revenues and EBITDA. Uralmashzavod was a close partner and supplier of Integra until 2007, when it decided to proceed with the drilling rig manufacturing business on its own. RBC recently reported that 11 Integra engineers, including its chief engineer, had moved from URBO to Uralmashzavod. Although Integra's loss of the Uralmash brand would be disappointing, we do not think it would significantly alter the competitive landscape in the industry.

Alexander Burgansky

UralSib: BashTEK/AFK Sistema: Bashneft to drop tolling schemes from Decemberhttp://www.businessneweurope.eu/dispatch_text10468

UralSib, RussiaNovember 12, 2009

BashTEK integration on track. AFK Sistema (SSA LI - Buy) subsidiary Bashneft will stop using oil tolling schemes from December, CEO Victor Khoroshavtsev said yesterday. Bashneft previously sold 50% of its oil on the domestic market and exported the remaining 50%; the refineries operated using a tolling schemes. However, as Sistema gained control over BashTEK, it announced that BashTEK's upstream and downstream assets are to be integrated into a single value chain, implying the cancellation of tolling schemes.

This implies that Sistema will control oil-product sales, maximizing margins from the downstream segment. Full integration will maximize Sistema's value; we have a Buy recommendation on the stock with a target price of $25/GDR. We expect the main beneficiary of integration to be AFK Sistema, and the Bashkirian assets to operate as cost centers.

Refining cover should increase. BashTEK needs to strengthen its upstream to replace oil purchases from other oil producers with its own oil supplies, thereby increasing refining coverage, which currently stands at 37%, the lowest among its integrated Russian peers. Meanwhile, at a meeting with investors, Sistema indicated that the gap between upstream and downstream production is to be covered by external oil supplies in the short term. Bashneft recently signed one-year oil supply contracts with LUKOIL, TNK-BP, and Shell to cover the supply gap, while additional oil volumes will be supplied by Surgutneftegas.

We view BashTEK's integration strategy positively, though we do not expect it to be completed soon.

Acquisitions should not be ruled out. Sistema is searching for upstream assets, and Russneft is in the company's sights, Kommersant reported on Monday, citing an undisclosed government source. According to the source, the companies have not yet conducted negotiations, as the price of a potential Russneft acquisition, as well as the company's high debt burden, have not suited Sistema.

Victor Mishnyakov

Hungary MOL chief says will not sell INA to Surgut for MOL stakehttp://www.portfolio.hu/en/cikkek.tdp?k=1&i=18885

November 11, 2009, 5:19 pm Although Russia’s Surgutneftegas declared itself a strategic owner in MOL, the chief of the Hungarian oil and gas group said this does not make the company’s intentions any clearer than they are now. In an interview with economic weekly HVG, Zsolt Hernádi emphasised that MOL has no plans whatsoever to sell its stake in Croatian oil company INA to Surgut even for the Russian company’s 21.6% MOL package. While MOL’s joint gas exploration project with ExxonMobil and Falcon Oil & Gas appears to end with no success, Hernádi said the gas is there and it will be brought to the surface eventually, if not necessarily now.

Hernádi said he cannot consider Surgut a hostile investor, as it has never come out and say it wants to take MOL over."If we want to consider someone a hostile investor it first needs to have an intention to take MOL over. Although you can safely assume that no one buys 21.6% just like that if it is a strategic investor. Therefore, the Board of Directors can do one thing only, consider Surgut a financial investor," Hernádi said.

He noted a strategic investor would need to sit down with MOL to find common values, interests and goals and ways for mutually fruitful co-operation. "There had been no communication whatsoever in this regard with Surgut before the transaction. I’d met Mr. Bogdanov (Editor’s note: Vladimir Bogdanov, CEO of Surgut) only once, in the autumn of 2008 in Slovakia," Hernádi added.

Austria's oil and gas group OMV sold its 21.2% stake in its Hungarian rival MOL to Russia's fourth-largest oil company Surgutneftegas for EUR 1.4 billion on 30 March this year.

To a question whether he is not concerned that Russia will put great pressure on MOL to

officially register Surgut as a shareholder - via external means, e.g. the ZMB field if necessary - Hernádi replied his stance in this regard has not changed. ( MOL and Russia’s Russneft both hold a 50% stake in the Zapadno-Malobalykskoye (ZMB) oil field and earlier this year te Russian Federation's Mining Authority (Rosnedra) threatened to revoke the west Siberian field's production licence because the operation was flaring the so-called associated gas gained from oil drilling at the ZMB oil field.)

"I did say that I see no external constraint that would change the standpoint of MOL’s Board towards Surgut."

Trying to pin down the Russians’ intention with the MOL package, HVG asked whether they had simply wanted to see the documentation of the Nabucco pipeline project via acquiring a stake in MOL. ( The Nabucco pipeline is a planned natural gas pipeline from Erzurum in Turkey to Baumgarten an der March in Austria diversifying the current natural gas suppliers and delivery routes for Europe. The pipeline attempts to lessen European dependence on Russian energy. The project is backed by several European Union states and the United States and is seen as rival to the planned Russian South Stream pipeline.) "MOL does have Nabucco’s documentation, but there are cheaper ways to obtain it than buying a 21.6% stake (in MOL) for EUR 1.5 billion. I wouldn’t buy 21% in an oil company, especially not for double its market value, just because it happened to be on the market. This is why we need to start to think what could they want. And we need to be prepared to take certain steps, but for the time being I have no job in this regard," Hernádi said.

The CEO it is obvious to everyone that the Nabucco pipeline would not be able to fulfil the natural gas needs of the countries involved. But, he added, an alternative gas route does not have to do that. "[...] it needs to create market and competition." Hernádi reminded that 80-90% of Hungary’s household heating is gas-based and natural gas flows in via a single pipeline from one direction. "This cannot stay like this. It is our elemental need to change that. That is why the government was right to say that Hungary needs Nabucco and needs the South Stream, as well, and a strategic gas storage will also be built in Szőreg."

Last month, Germany’s leading financial daily Handelsblatt reported that Surgut would offer MOL a deal to move out of Hungary in return for a stake in INA . Portfolio.hu’s said than that the article was based on several pieces of unconfirmed information and that such a transaction was highly unlikely for a number of reasons, not least by a five-year lockdown period MOL has on INA stocks.

Hernádi said such a swap was no option and MOL has no intention to make such a deal.

"[...] we know and our Croatian partners are also aware that this integration will make INA strong, both on its home turf and in Central European markets. [...]INA is already a better company than it was size months ago and it is becoming even better."

Canada’s Falcon Oil & Gas announced last week that the third - and apparently last - fracture test at Hungary’s Földeák-1 well has brought no success, and so the well was temporarily closed .

To a question whether the project that has already consumed tens of billions of forints will be shut down completely or not, the CEO said sooner or later gas will be produced there.

Hernádi said the final results have not yet been fully evaluated but it is already clear that the project has "less prospective" than originally thought.

He reminded though that this is a "non-conventional exploration programme", which means it "demands different professional and technological solutions" than the other projects in MOL’s history.

"The problem is that we don’t know how to extract (the gas) and whether it is worth it." He added, however, that even a pullout would not mean the end of the story only that with the currently available technology and market environment it should not be forced. "There is natural gas in Makó and sooner or later we will bring it to the surface."

The first trains carrying more than 8,000 tonnes of oil left from Skovorodino to Kozminohttp://www.itar-tass.com/eng/level2.html?NewsID=14521246&PageNum=0

11.11.2009, 23.47

KHABAROVSK, October 12 (Itar-Tass) -- The first trains carrying more than 8,000 tonnes of oil left the Skovorodino railway station, Amur Region, for the Primorye Territory, an official at the Amur Regional government told Itar-Tass on Wednesday.

“We plan to transport additionally 13,200 tonnes of oil from a big oil storage facility that was built in Skovorodino to the Kozmino seaport in the Primorye Territory,” the official said.

Oil is supplied to Skovorodino through the East Siberia – Pacific Ocean (ESPO) oil pipeline from Yakutia’s deposits, a representative of the Vostokneftetrans company said.

In his words, “in November, the company plans to deliver to Kozmino only process oil that is necessary for the operation of infrastructure facilities of the oil port.”

“In the middle of December, our clients will receive the first batch of oil for its further transhipment to tankers,” the company’s representative said.

Under the project, 15 million tonnes of oil a year or 1.25 million tonnes of oil a month will be transported by railway from Skovorodino to the seaport.

In the format of the ESPO first stage, there were built a 2,694-kilometre oil trunk line that linked Taishet, Talakan, Lensk, Olekminsk, Aldan, Tynda and Skovorodino, as well as seven oil pumping stations, a transhipment terminal in Skovorodino, and the Kozmino tanker harbour, the official said.

A total of 984 kilometres of the ESPO pipeline runs in the Irkutsk region, as many as 1,458 kilometres in the Republic of Yakutia and more than 252 kilometres in the Amur region.

RUSSIAN ENERGY OVERVIEW

http://www.energianews.com/article.php?id=3992

A Platts.com News Feature

Russian Oil Production Resurgence

By Stuart Elliott

November 5, 2009 - In 1999, Russian oil production just about topped 6 million b/d as the country struggled to recover from its Soviet-era output highs. The country was also only just emerging from its worst ever financial crisis the year before, and the Russian government under then President Boris Yeltsin was considering selling off major stakes in the state-owned energy companies Gazprom and Rosneft.

What a difference ten years can make. By October 2009, Russia's oil production exceeded 10 million b/d for the first time in the post-Soviet Union era. (See related story: Russia's October oil output hits record 10 million barrels per day)

Russia's growing predominance as the world's leading oil producer has been given a major fillip by OPEC's decision late last year, in the face of plunging oil demand, to remove 4.2 million b/d of oversupply from world markets. Saudi Arabia's share of that cut was around 1.3 million b/d.

2009 has seen a welcome resurgence in Russian oil production after 2008 witnessed the first decline in output since the lowly days of 1999. Analysts and market observers then feared the significant growth of the previous decade was about to end, and the decline in production from the mature fields of Western Siberia would trigger an overall drop in the years to come. Oil output fell by about 1% year on year in every month of 2008 and in the first two months of 2009. Overall 2008 oil production fell 0.7% to 488.105 million mt--the first annual production decline in 10 years.

Analysts, in the first quarter of 2009, were adamant the output decline would continue over the year, and even the government predicted a continuing fall in production.

In March, Russian Prime Minister Vladimir Putin himself forecast Russian crude output would drop 1.1% to 482 million mt (9.64 million b/d) in 2009.

The crude output forecast was, according to the prime minister's office, based on "insufficient volumes of financial resources to maintain production from old depleted fields, mainly in Western Siberia, and to develop new fields in East Siberia and the Timan-Pechora oil province."

Since then, though, Russian oil producers have managed to increase production thanks to the ruble's depreciation against both the dollar and euro and lower oil export duties.

In addition, companies have brought online new fields, that have more than compensated for the falling production from the more mature fields in Western Siberia.

One massive injection of oil came in August from the country's biggest oil producer, Rosneft, launching its giant Vankor field. The company plans to increase output from the field to 220,000 b/d by the end of the year from the current 130,000 b/d.

In addition, Lukoil brought production at its new field, Yuzhno-Khylchuyu, to its planned peak output of 7.5 million mt/year, while TNK-BP, thanks to its Uvat project launch early in 2009, continued to see growth in crude output.

Analysts, however, remain uncertain as to whether Russia can sustain its output growth. Despite some bullish forecasts, some of which see Russian production increasing to around 13 million b/d in the future, most industry observers see 10 million b/d as the country's production plateau.

In a recent report, analysts at Bernstein Research said output would begin to stagnate next year and then tail off as mature fields lose production capacity.

With traditional oil producing regions on the decline, Russia is looking to new, more remote and difficult to exploit areas, particularly in Eastern Siberia.

However, companies are looking for beneficial tax regimes there in order to stimulate activity.

Russian Prime Minister Vladimir Putin approved in July the decision to introduce a zero rate export duty for East Siberian crude to stimulate the development of the remote oil province. But it has been unclear when it will come into force and how long it will last.

"There is no clarity if the planned zero rate for export duty for East Siberian crude will last for three or five years. Without that understanding it is difficult for us to take investment decisions," Peter O'Brien, vice president of Russian oil major Rosneft, said

October 21.

He urged the government to clarify its tax policy plans for East Siberia as the company needs to take urgently investment decisions for new fields in the region.

Russian Energy Minister Sergei Shmatko said October 26 the zero rate export duty for East Siberian crude is likely to last a minimum of five to seven years.

Shmatko said it should take five to seven years for companies to recover costs at new fields in East Siberia, and therefore the zero rate should be set in line with this time frame.

"Based on such logic... [the zero rate export duty] should be for a minimum of five to seven years," he said.

The timing on the export duty is still uncertain, however, as Shmatko's proposed time frame has yet to receive formal approval from Russia's government.

OPEC cooperation

Another important factor in Russian crude output growth is whether it will formalize its relations with the oil exporting cartel, OPEC. For a number of years, Russia has hinted it could support OPEC's actions on balancing the crude supply market.

Towards the end of 2008, when oil prices plummeted from all-time highs, OPEC formally requested that non-OPEC producers--specifically Russia, Norway and Mexico--cut output to boost prices.

But despite rhetoric from senior Russian officials, and claims from major producers such as Lukoil that helping OPEC would be beneficial for everyone, Russia made no pledge to help OPEC out.

At the end of October, OPEC invited Russia to take part in the next OPEC meeting, which is due to take place in Angola in December. Russia is to send a delegation to take part in the meeting, energy minister Shmatko said, adding that Russia remained "interested in cooperation with OPEC."

Shmatko also reiterated that Russia expects to hold a join seminar with OPEC before the end of this year in Moscow to discuss greater cooperation. "We are to discuss available steps for cooperation, in particular in the exchange of information and analyses of market scenarios and preparing specialists," he said.

Speaking after the most recent OPEC meeting in September, the group's secretary-general Abdalla el-Badri refrained from criticizing Russia, saying OPEC could not interfere in Moscow's decisions, though he described the rise in Russian output as "disappointing."

Asked at that time whether OPEC would again request non-OPEC help to try to balance markets, Badri said that his visits to Russia in the past had failed to produce any concrete results, though the discussions would continue. Russia's October oil output hits record 10 million barrels per day

Russia's October crude oil production rose to 42.469 million mt (10 million barrels/day) setting a post-Soviet era record high for the third consecutive month and gaining 1.8% on the year, according to preliminary data released Monday by Russia's Central Dispatching Unit, a division of the country's energy ministry.

In August, Russia's crude output of 9.93 million b/d beat the post-Soviet record of October 2007, when oil producers pumped 9.89 million b/d. September crude output climbed further to 9.965 million b/d.

Since August, Russia has displaced Saudi Arabia as the world's biggest oil producer, benefiting not only from its own volume growth but also from a sizable reduction in Saudi output as part of OPEC's moves to cut supply.

The current growth, however, is unlikely to persist for long as there is no increase in production wells drilling, said Valery Nesterov, an analyst with Moscow-based Troika-Dialog investment bank. In fact drilling is declining, he said, adding that the recent growth in crude production was partly due to rising oil prices. Russia's oil output began to rise again in March after falling by nearly 1% on the year in every month of 2008 and the first two months of 2009. The increased production came partly from new fields brought on stream by Rosneft, Lukoil, and TNK-BP and partly due to an improving fiscal regime.

Nesterov said Rosneft's giant Vankor oil field in East Siberia, which was launched in August, was likely to help maintain the country's production growth through the end of this year and possibly next year.

In October, Peter O'Brien, a vice president of Russia's biggest oil producer Rosneft, said his company was confident it would be able to maintain crude production growth to 2013.

The company must take investment decisions urgently if it is to secure crude output growth beyond 2013. However, this is difficult due to the lack of clarity over the government's plans for tax policy in the region, O'Brien said.

Russia's energy ministry recently revised up its 2009 output forecast by about 1% on the year from 488.1 million mt (9.735 million b/d) in 2008. The government had expected 2009 to show a 1.1% decline on the year.

Russia's crude production totaled 410.303 million mt in the first ten months of the year, up 0.8% from the same period a year ago.

Non-CIS September exports up 8.4%

Exports of Russian crude to countries outside the Commonwealth of Independent States rose 0.7% on the year to 17.827 million mt (4.2 million b/d) in October.

The CIS comprises 12 former Soviet Republics: Russia, Ukraine, Belarus, Uzbekistan, Armenia, Azerbaijan, Turkmenistan, Georgia, Kazakhstan, Kyrgyzstan, Moldova and Tajikistan.

Russia transported a total of 20.05 million mt of crude to non-CIS countries, up 1.8% on the year, including 2.223 million mt of transit crude from other countries, mainly Kazakhstan.

Oil exports to non-CIS countries through Transneft's national pipeline system were 17.923 million mt, up 0.7% on the year.

Russia's October crude oil exports to the CIS countries rose 4.8% to 2.722 million mt.

In October, Russia stopped crude deliveries via Transneft's pipelines to China. In the previous three months it had transported over 200,000 mt/month via the route.

The reason for the halt in crude supplies via Transneft's pipelines to China is unclear as a representative from Transneft was not able to comment on the issue when contacted. Representatives of TNK-BP and Gazprom Neft, which normally use the route, could also not provide immediate comments.

October crude deliveries to Russian refineries totaled 19.473 million mt compared with 20.328 million mt in October 2008. Until relatively recently, all the talk in Russia had been about providing ever-larger volumes of gas to Europe and other emerging markets, with the country’s gas giant Gazprom promising increased investment into finding and producing ever-more gas.

However, the unprecedented global recession in recent months and subsequent fall in oil and gas prices has put paid--at least for the time being--to Gazprom’s ambitious expansion plans.

Gazprom has seen a huge drop in gas demand from European customers, which has impacted considerably on the company’s revenues. In addition, finding financing for new projects, or even funding existing production efforts, has become much more difficult given the reluctance of banks to lend in the current climate. And this even for a company as huge and with as much political backing as Gazprom.

The most visible result of the company’s recent problems was a one-day drop in May in gas production volumes below 1 billion cubic meters, Gazprom’s lowest daily output figure for 26 years. On May 10, Gazprom’s gas output was just 975.7 million cu m.

Gazprom remained tight-lipped about the historic fall, commenting only to say: "Daily production volumes have been adjusted to respond to a decline in gas demand." European utilities scaled back on gas purchases from Russia, opting to wait for prices to decline before buying and storing. In early April, Gazprom said it expected domestic and European consumption to pick up from the end of the second quarter, suggesting that consumption already had recovered in March and that the company expected consumption at higher-than-planned levels in April.

This, clearly, was not the case.

And despite the expected demand recovery, JP Morgan still sees Gazprom’s 2009 output down 12% at an estimated 486 Bcm. This is a far cry from the picture late last year when Gazprom said it would produce around 565 Bcm in 2009.

The fall in demand was borne out by a massive drop in Russian gas exports--in the first four months of 2009, they plunged by more than half compared with the same period in 2008. Russia exported 34 Bcm of gas in the January-April period, down from almost 73 Bcm in the corresponding period of 2008.

In the first quarter, Germany, traditionally the largest end-user of Russian gas, saw deliveries cut in half to 6.09 Bcm, according to data released with Gazprom’s first-quarter results in May.

A gas pricing dispute between Russia and Ukraine, which brought supplies to Ukraine and Europe to a halt for more than two weeks at the start of the year, was a major factor in the decrease, but falling demand in Europe has also taken its toll on the Russian giant’s first-quarter sales.

The fall in volumes -- and price -- of Gazprom’s gas also means the company could be struggling financially. It emerged earlier this month that Gazprom was seeking further state guarantees from Italy for financing the massive Nord Stream gas pipeline project across the Baltic Sea. Gazprom is believed to have asked Italy’s SACE export financing agency to increase existing guarantees to Eur1.7 billion ($2.3 billion) from Eur1 billion for the underwater pipeline and provide additional guarantees of Eur440 million for the construction of the inland line.

Gazprom’s capital expenditure this year will certainly be much lower than the Rb920.44 billion ($27.55 billion) budget approved in December 2008, a fact confirmed by company officials in April.

And in a sure sign that the boom era of Russian energy could be over, President Dmitry Medvedev said this month that he would personally oversee a push to diversify the economy away from oil and gas. Medvedev said he would head a commission that would oversee the modernization of the economy, which he said had become too heavily dependent on oil and gas exports. Medvedev went as far as to say Russia’s dependence on raw material exports was one of the "main strategic risks and threats to national

security in the economic sphere." Russia seeks foreign investment

The main problem facing the Russian gas sector looking forward is securing funding for massive new projects. The remote Yamal Peninsula is seen as probably the biggest potential supplier of new gas, but its location and lack of infrastructure mean developing the region will be challenging at best.

In September, Putin opened wide the door for international majors to help develop the vast resources of the Yamal Peninsula, with a development plan for the region expected to be finalized in the first quarter of 2010.

Putin invited the heads of at least 11 majors to attend a meeting in Salekhard in the Yamal-Nenets Autonomous region and outlined the country's plans to tap the area's "challenging reserves."

Russia sees Yamal as a key region to compensate for falling natural gas production from the country's existing gas fields, and for increasing its role in LNG production. However, exploiting the region would most likely require foreign expertise and technology.

Included among those companies invited were France's Total, Norway's StatoilHydro, Anglo-Dutch major Shell, Japan's Mitsui and Mitsubishi, ExxonMobil, ConocoPhillips, Germany's E.ON, France-based GDF Suez, South Korea's Kogas and Malaysia's Petronas.

"We are ready to expand cooperation. That's why we have invited you to Salekhard," Putin told the company heads. "We want you to see that we are working openly and transparently. The key condition is that the cooperation must be stable and long-term. We will find a way to secure the interests of our partners...as well as Russia's interests. Putin said Russia would welcome foreign partners to bring not only money but also new technology, both of which are scarce presently in Russia. Economy Minister Elvira Nabiullina, speaking at the same event, said Russia expects foreign majors to help it establish gas field development technology, build complex infrastructure, including ice-breaking tankers, secure new gas markets and bring in project financing.

In order to stimulate activity in Yamal, Putin also said Russia could provide tax incentives. "I believe it is possible to create favorable taxation [for the area]," he said. Russia already has introduced a temporary exemption from mineral extraction tax for some territories, as well as zero export duty for crude from East Siberia, to stimulate the development of new territories.

The difficulties of the region were emphasized at the meeting, broadcast on Russian television, but the IOCs said they were confident of being able to help Russia develop Yamal.

"We believe that difficulties can be overcome through a constructive partnership between

Russian and international companies," Shell CEO Peter Voser said. Based on its experience at the Sakhalin 2 project, where Shell partners with Gazprom and Japanese companies, the company "is ready to undertake a study on the viability" of LNG projects in Yamal, Voser said.

ConocoPhillips CEO James Mulva, however, called for clarity on how new projects at Yamal would be organized. "It is necessary to develop as soon as possible a formula, a term contract for the industry to understand how companies will invest their money," he said. "It is also very important to know not only what the incentives [for the project] will be, but also how the project will be managed."

Gazprom is considering the construction of an LNG plant based on the Tambei group of fields at Yamal. Gazprom's Zapadno- and Severo-Tambeiskoye and Novatek's Yuzhno-Tambeiskoye fields hold combined reserves of 2.3 trillion cubic meters of gas and could be used to feed a liquefaction facility.

Novatek CEO Leonid Mikhelson said the development of just Yuzhno-Tambeiskoye would secure production of 25 Bcm/year over at least 25 years. Gazprom also plans to include fields offshore the Yamal Peninsula in the Yamal LNG project at later stages of its development.

Gazprom plans to launch the first gas field in Yamal, Bovanenkovo, in late 2012. This is the biggest gas field in the region, with reserves estimated at 4.9 trillion cu m. Gazprom plans that once on stream, Bovanenkovo's output would grow from an initial 15 Bcm/year to 115 Bcm/year and then to 140 Bcm/year at later stages.

Gazprom has said previously that the Yamal fields combined would be producing 75-115 Bcm/year in 2015, 135-175 Bcm/year in 2020, 200-250 Bcm/year in 2025 and 310-360 Bcm/year in 2030.

Separately, Putin also said Russian companies have received invitations to acquire refineries in Europe and that they would like to take advantage of asset swaps with foreign investors as a way of promoting mutual trust.

"There were offers to our companies to acquire refineries nearby in Europe," he said. "This is a good offer, and of course our companies will take advantage of it."

Putin said asset swapping was the "most correct" way to enhance mutual trust between investors.

Total, Europe's biggest refiner, earlier this month announced its interest in selling some of its European refining assets. According to reports in Russian media, Total has approached Russian companies inviting them to acquire these assets. Total already sold last month a 45% stake in the Vlissingen refinery in the Netherlands to Russian major Lukoil. Gazprom hits take-or-pay dirt

Russia's export monopoly Gazprom finds itself in a difficult situation. It freely trades at spot markets in Europe, and this is much lower than its term contract prices.

Importers are seeking relief from an estimated $2.5 billion payment for gas they will not take.

Russian gas exporter Gazprom is in a tough position over its European gas export contracts, where sales this year have been lower than the buyers' commitments.

Exports have slumped, and one of its biggest customers, Germany's E.ON Ruhrgas, has said it is in talks with it to defer the amount of gas it is to take on long-term contracts.

It is unlikely to be alone in this. All European buyers would prefer to take their needs from the spot market, where the marginal gas price is now running at about half that of the long-term contracts.

The latter reflect European oil and product prices as they were earlier this year, while the spot price reflects supply and demand. Importers optimize between the two "Gazprom is under a lot of market pressure," said Unicredit Securities' Artyom Konchin in a phone interview with Platts. "There is a lot of new gas coming to Europe, with a slew of liquefied natural gas projects this year and next, and American companies looking at shale gas in Europe, and there is African gas coming as well," he said. "I am not a big proponent of Gazprom's dominance in Europe," he said.

This will put pressure on Gazprom to reach some accommodation, he said. "Clearly there is the threat of litigation. But punishing customers is not good business practice," he said, "and yet take or pay is not something you can get out of. The threat of penalties will be in the buyers' minds. Gazprom will be seeking concessions."

He said he agreed with published figures that show that Gazprom is likely to sell next year 150 billion cubic meters, while its customer's take or pay commitments extend to 160 Bcm. This means that Gazprom is entitled to receive $2.5 billion, assuming a price of $250/'000 cu m, without actually delivering that gas.

He also did not set much store by the argument that European customers did Gazprom any favors by not suing it over the disruption to supplies earlier this year during the dispute with Ukraine. "Ukraine is a separate case," he said. "There is probably some force-majeure clause engraved in its contracts to cover that." And Gazprom's decision to relieve Ukraine of its take-or-pay obligations did not mean that other countries could assume the same terms.

This year has already seen a big reduction in Gazprom's exports, with Valeri Yazev, the head of the Russian Gas Society, telling an industry meeting in Brussels earlier this month that Gazprom's key customers underbought. He said this was a much graver threat to security of supply than the events in Ukraine in January.

E.ON's CEO Wulf Bernotat said in October that long-term contracts formed the backbone of European gas supply and were constantly adapted in line with market changes, including the current oversupply situation in Europe. They constitute the long-term basis for cooperation between producers and importers. It is in this spirit that we are holding talks with the producers, E.ON Ruhrgas said, declining to comment on any details.

StatoilHydro said when it was announcing its second-quarter results that it had deferred gas from Q2 to a future year, suggesting that its talks had gone well, from the buyers' point of view, but it did not name any names or volumes. Its presentation showed that its production rate in Q2 09 at the giant Troll field was down by a quarter on Q1 – from 199.5 kboe/d to 148.1 kboe/d. The Oseberg field also showed a similar reduction, from 58.6 kboe/d to 39.7 kboe/d. The Sleipner and Ormen Lange fields on the other hand were almost unchanged at 112 kboe/d and 100 kboe/d respectively. But from Q2 08 to Q2 09, its output rose slightly.

Plenty of gas, little demand

The global gas market has been hit by a 'triple whammy' -- recession, the growth of unconventional gas output in the United States, and a surge in LNG production -- according to Simon Blakey, Senior Director for consultancy Cambridge Energy Research Associates, speaking at the World Forum on Regulation in Athens October 20. Europe is contractually oversupplied by a cumulative total of 70 billion cubic meters of natural gas in the period 2009-2011, he said.

Jacques de Jong, a senior fellow of the Clingendael International Energy Programme, estimated that in the short-term Europe had seen its expected demand for natural gas reduced by 90 Bcm up to 2013, compared with estimates made one year ago. This he concluded meant that "Europe cannot offer demand security."

The impact of lower demand and the growth in LNG output can already be seen in prices for spot LNG cargoes, which are now about half those of oil-indexed pipeline gas on the European continent, speakers at the Athens conference said.

However, LNG's price impact was being limited by infrastructural constraints. Walter Boltz, Chairman of the Austrian energy regulator E-Control said contractual congestion between hubs in the European market was persistent, leading to wide variations in prices. Several important pipelines, such as the Hungary-Austria gasline and a pipeline delivering Norwegian gas from Emden in northern Germany are fully booked even though on many days the physical flows show they are half used.

Hubs closer to LNG landing points were seeing downward pressure on prices, whilst those further removed were not. Those without transport flexibility were suffering from high prices, he said. This was the result of both a lack of transmission infrastructure and because much existing infrastructure was "contractually congested" In other words, the capacity is booked and no third-party gas can flow, even if the physical reality is very

different. Despite the new powers granted to regulators under the EU's third energy package, he described enforcement as "still weak" and said that he expected price differentials between European hubs to persist.

Glut of LNG cargoes seen next year

With OECD gas demand in the doldrums and unlikely to recover significantly in the next year, expectations are rising of a glut of LNG cargoes on the market in 2010. LNG output is expected to surge as new liquefaction capacity in Indonesia, Russia, Qatar and Yemen ramps up to full capacity. LNG plants have to run near full capacity.

According to Wilson Crook, who manages US major ExxonMobil's global regulatory affairs for gas, liquefaction plants have the flexibility to rein in output by about 5%, "but not much more". Referring to ExxonMobil's joint-venture operations in Qatar, which have scaled LNG production up to an unprecedented level, he said, "that gas is going to flow." Crook suggested that LNG suppliers might see marginal economics, but would still have to produce. That gas "will have to be stuffed into a market somewhere," he said.

European demand security also came under fire from Gazprom Export's head of contract structure and price formation, Sergey Komlev He noted that EU energy policies had earmarked natural gas "for maximum displacement" and that up to 116 Bcm of natural gas demand could be replaced through energy efficiency initiatives and the introduction of renewable energy sources. He argued that such policies were neither rational nor economic.

Natural gas is cheaper than renewables, more effective in reliably meeting peak demand in the power sector and could through the displacement of half of Europe's hard coal output provide a reduction in greenhouse gas emissions of 185 million mt/year by 2030, Komlev said. It would also avoid the huge investment costs implied by a rush into carbon capture and storage.

Komlev argued that European concerns over relying on Russia for so much of its natural gas were "highly exaggerated." This, he said, was because Europe was using Russia as a classic "external enemy" in order to resolve its own internal divisions, rather than recognizing Russia and Europe's interdependence. The EU, he argued, was throwing away the chance to use natural gas as a means to address climate change.

The lack of competition in European gas markets, and the dearth of liquidity, was a barrier to a transition from oil to gas indexation for natural gas pricing, said Komlev. He argued that oil indexation had resulted from the market being insufficiently efficient to produce reliable market signals. The European market is still dominated by oligopolistic groups and was therefore not ready to switch, Komlev said.

He also argued that oil indexation has great advantages even if meant that current prices were different from spot prices. One advantage is that the seller cannot so easily

manipulate the price, if it depends on fuel oil prices on barges in northwest Europe. The situation was the opposite two years ago, he said. "Until we see development in continental markets sufficient to produce reliable market signals there will be no change in the principles of pricing [natural gas] in Europe, Komlev stated.

Gas import businesses should be wary of procuring gas through 100% oil-indexed long-term contracts, Olaf Schneider, director of gas supply at German gas importer and supplier VNG, said October 13 at the Erdgas 2009 conference in Berlin.

"The current difference between spot gas and oil-indexed gas is dramatic for us. Oil-indexed gas is almost double the price of gas bought on the spot market," Schneider said. "Those companies who have signed long-term oil-indexed gas contract really have a big problem at the moment," he added. According to Platts' Northwest European oil-indexed gas indicator, November gas at the UK's National Balancing Point October 12 was valued Eur5.31/MWh below oil-indexed gas of the same month. Schneider recommended that utilities, and specifically German stadtwerke, design contracts that "intelligently combine" different supply mechanisms.

In the long run, however, Schneider did not see the practice of linking gas prices to those of crude oil as obsolete, saying that the current oversupply of gas seen by the market and the related collapse in prices was only temporary. He said that an end to the financial crisis would bring a recovery in the market. "In the long run, spot and oil-indexed gas prices will come closer again," he said.

Schneider was certain that there would always be a "correlation" between the pricing of oil and gas, but said that ultimately the customers would determine how strong this correlation would be in future. "Customers will decide the contents of their contracts. They will decide whether they want their gas indexed against, for example, the TTF or gasoil," he said.

Russia opens up Yamal to foreign major

Russia has opened the door for international majors to help develop the vast natural gas resources of the remote Yamal Peninsula, with a development plan for the challenging region expected to be finalized in the first quarter of 2010.

Prime Minister Vladimir Putin invited the heads of at least 11 majors to attend a meeting September 24 in Salekhard in the Yamal-Nenets autonomous region and outlined the country's plans to tap the area's "challenging reserves".

Russia sees Yamal as a key region to compensate for falling natural gas production from the country's existing gas fields, and for increasing its role in LNG production. A total of 11 gas and 15 gas and oil onshore and offshore fields have been discovered in Yamal, with 2P reserves estimated at 16 trillion cubic meters.

However, exploiting the region's resources would most likely require foreign expertise

and technology.

Among those companies invited were France's Total, Norway's StatoilHydro, Anglo-Dutch major Shell, Japan's Mitsui and Mitsubishi, ExxonMobil, ConocoPhillips, Germany's E.ON, France-based GDF Suez, South Korea's Kogas and Malaysia's Petronas. "We are ready to expand cooperation. That's why we have invited you to Salekhard," Putin told the company heads.

We want you to see that we are working openly and transparently. The key condition is that the cooperation must be stable and long-term. We will find a way to secure the interests of our partners…as well as Russia's interests."

Putin said Russia would welcome foreign partners to bring not only money but also new technology, both of which are scarce in Russia. Economy Minister Elvira Nabiullina, speaking at the same event, said Russia expects foreign majors to help establish gas field development technology, build complex infrastructure, including ice-breaking tankers, secure new gas markets and bring in project financing.

In order to stimulate activity in Yamal, Putin also said Russia could provide tax incentives. "I believe it is possible to create favorable taxation [for the area]," he said. Russia already has introduced a temporary exemption from mineral extraction tax for some territories, as well as zero export duty for crude from East Siberia, to stimulate the development of new territories.

The difficulties of the region were emphasized at the meeting, broadcast on Russian television, but the IOCs said they were confident of being able to help Russia develop Yamal.

"We believe that difficulties can be overcome through a constructive partnership between Russian and international companies," Shell CEO Peter Voser said. Based on its experience at the Sakhalin 2 project, where Shell partners with Gazprom, the company "is ready to undertake a study on the viability" of LNG projects in Yamal, Voser said.

While most of the companies' representatives confined their remarks to the need for cooperation and the desirability of expanding their activity in Russia with partnerships, ConocoPhillips CEO James Mulva called for a new approach to gas marketing.

"Regarding the gas price, we need to use more innovative approaches in marketing that gas on international markets, in comparison with other projects," he said. "We must develop as soon as possible a formula, a term contract for the industry to understand how companies will invest their money," he said. "It is also very important to know not only what the incentives [for the project] will be, but also how the project will be managed."

Gazprom plans to launch the first gas field in Yamal, Bovanenkovo, in late 2012. This is the biggest gas field in the region, with reserves estimated at 4.9 tcm.

Gazprom has said that output would grow from an initial 15 Bcm/year to 115 Bcm/year and then to 140 Bcm/year at later stages.

Gazprom has said previously that the Yamal fields combined would be producing 75-115 Bcm/year in 2015, 135-175 Bcm/year in 2020, 200-250 Bcm/year in 2025 and 310-360 Bcm/year in 2030.

Gazprom is also considering the construction of an LNG plant based on the Tambei group of fields at Yamal. Gazprom's Zapadno- and Severo-Tambeiskoye and Novatek's Yuzhno-Tambeiskoye fields hold combined reserves of 2.3 tcm of gas and could be used to feed a liquefaction facility.

Novatek CEO Leonid Mikhelson said the development of just Yuzhno-Tambeiskoye would secure production of 25 Bcm/year over at least 25 years.

Gazprom also plans to include offshore fields in the Yamal LNG project at later stages of its development.

Gazprom, meanwhile, expects to finish building the first vital link between the peninsula and the rest of Russia next January.

A new rail bridge will enable trains to run from Obskaya to Bovanenkovo, replacing the summer-only maritime service to the port of Kharasavei. The railroad "will become one of the key elements of the strategic national project to develop fields in the Yamal Peninsula," Gazprom said.

After the first 525-km section is commissioned, the line is to be extended to Karskaya in September 2010.

Separately, Putin also said Russian companies have received invitations to acquire refineries in Europe and that they would like to take advantage of asset swaps with foreign investors as a way of promoting mutual trust.

"There were offers to our companies to acquire refineries nearby in Europe," he said. "This is a good offer, and of course our companies will take advantage of it." Putin said asset swapping was the "most correct" way to enhance mutual trust between investors.

Total, Europe's biggest refiner, earlier this month announced its interest in selling some of its European refining assets.

According to reports, Total has approached Russian companies inviting them to acquire these assets.

Total already sold last month a 45% stake in the Vlissingen refinery in the Netherlands to Lukoil

Gazprom

Steel Guru: Gazprom chooses Tenaris for debut project in Libyahttp://steelguru.com/news/index/2009/11/12/MTE5OTcz/Gazprom_chooses_Tenaris_for_debut_project_in_Libya.html

Thursday, 12 Nov 2009

Gazprom recently chose TenarisHydril Blue™ and Wedge Series 521™ , 523™ , and 513™ connections for their first project in Libya, the country that holds the largest oil reserves in North Africa.

The Libyan government granted the Russian energy giant two contracts to drill exploratory onshore and offshore wells. For this project, Gazprom required products able to withstand extreme operating conditions, including combined loads or pressures and

unexpected formations or well conditions. TenarisHydril BlueTM and Wedge Series 500™ technologies were designed to handle challenging environments including high torque scenarios.

Tenaris had recently opened an office in Tripoli and has experience in the region. Also, Tenaris had previously served Gazprom in key projects in Russia including the Astrakhan and Orenburg fields.

Mr Emad Hanna, Technical Sales Manager, North Africa said “Our technical team worked hand-in-hand with the customer to create a tailor-made well design for the project.”

To better serve Gazprom and other newcomers in Libya, Tenaris is currently setting up a 20,000 square meter yard. This investment will complement the company's current setup in North Africa, consisting of offices in Cairo, Tripoli and Algiers and a yard in Alexandria.

Gazprom, Srbijagas to Sign South Stream Jv Agreement Nov 17http://www.istockanalyst.com/article/viewiStockNews/articleid/3627418

Tuesday, November 10, 2009 2:51 PM

(Source: Daily News Bulletin; Moscow - English)MOSCOW. Nov 10 (Interfax) - Gazprom (RTS: GAZP) and Srbijagas will sign an agreement to form a joint venture build the 450- kolimeter Serbian section of the South Stream gas pipeline on November 17, Serbia's Beta news agency quoted the head of Srbijagas as saying.

The joint venture, in which Gazprom will own 51% and Srbijagas 49% of the equity, will be registered in Zug, Switzerland.

The Serbian section of the pipeline will cost an estimated EUR 700 million.

The 900-km South Stream pipeline will carry up to 63 billion cubic meters of gas per year from Russia's Black Sea coast to Bulgaria, southern Italy and Austria.

(c) 2009 Daily News Bulletin; Moscow - English. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.

Gazprom holds South Stream talks with Enihttp://www.upi.com/Science_News/Resource-Wars/2009/11/11/Gazprom-holds-South-Stream-talks-with-Eni/UPI-15941257961785/

Published: Nov. 11, 2009 at 12:49 PM

MOSCOW, Nov. 11 (UPI) -- Executives from Italian giant Eni and Russian gas monopoly Gazprom met in Moscow to discuss the preliminary framework for the South Stream gas pipeline.

Alexei Miller, chief executive of Gazprom, hosted his Eni counterpart, Paolo Scaroni, at Gazprom headquarters in Moscow to approve joint developments on the pre-investment stage of South Stream.

Moscow includes South Stream, along with its Nord Stream counterpart, as part of a plan to ease the transit burden on Ukraine, which hosts the bulk of the Russian gas bound for Europe currently. A January row between Kiev and Moscow sparked a gas crisis that still haunts the regional energy sector.

Russian gas monopoly Gazprom signed a series of South Stream initiatives with the Bulgarian, Greek and Serbian governments in May and has similar arrangements under way with Slovenia and Austria.

South Stream AG was incorporated in 2008 as a joint company of Gazprom and Eni. Italy is the third-largest importer of Russian gas in Europe.

Eni said another round of talks was scheduled for Dec. 11 in Venice.

Gazprom confirms non CIS export plans for 2009http://steelguru.com/news/index/2009/11/11/MTE5ODEx/Gazprom_confirms_non_CIS_export_plans_for_2009.html

Wednesday, 11 Nov 2009

Interfax cited Mr Sergei Chelpanov CEO of Gazprom Export as saying that, Gazprom confirmed plans to export 142 billion to 143 billion cubic meters to non CIS countries in 2009 down from 158.8 billion cubic meters in 2008.

Mr Chelpanov said "The figure of 142.5 is entirely realistic 142 billion cubic meters to 143 billion cubic meters is a possible figure. He said that the situation with foreign buyers and take-or-pay contracts was unusual but that there is no question of commitments being canceled. Those consumers will take 8 billion cubic meters to 9 billion cubic meters less gas that stated by contracts this year. There could also be a shortfall next year but not as much as this year.”

He added that in fourth quarter, Gazprom plans to export 45 billion cubic meters. That would be 25% more than in Q4 2008, which was the first period in which gas consumption declined due to the global crisis. Gazprom exported 45.7 billion cubic meters of gas to non-CIS countries in Q4 2007.

Mr Gennady Sukhov head the department for the distribution of gas resources of Gazprom financial and economic department, said that the company expects sales on the Russian market to drop by 7% in 2009.

In the H1 of 2009 deliveries went down by 10%.

Mr Pyotr Bakayev head of Gazprom financial markets department said deliveries hit their low in April this year, but were up on last year in July. He said Gazprom was now increasing production as demand recovered in Europe and that he hoped this tendency would persist until the end of the year.

(Sourced from Interfax)

NOVEMBER 12, 2009, 4:02 A.M. ET

Gazprom Neft: Court Throws Out RUB4.675 Bln Antitrust Fine http://online.wsj.com/article/BT-CO-20091112-704620.html

MOSCOW (Dow Jones)--A St. Petersburg court has overturned a RUB4.675 billion ($163 million) antitrust fine against OAO Gazprom Neft (SIBN.RS), the oil arm of OAO Gazprom (GAZP.RS) said in a statement Thursday.

Russia's Federal Anti-Monopoly Service had levied the fine on Gazprom Neft, along with similar fines at other oil companies, for abusing their dominant position in the refined oil products market in the first half of 2009.

OAO Lukoil (LKOH.RS) was fined RUB6.55 billion by antitrust officials last week, OAO Rosneft (ROSN.RS) was fined $182.4 million last month, and TNK-BP (TNBP.RS), BP PLC's joint venture in Russia, has also been implicated in the probe.

Company Web site: www.gazprom-neft.ru

-By William Mauldin, Dow Jones Newswires; +7 495 937 8445; william.mauldin@dowjones.com