Russia 101103

Basic Political Developments Ahmadinejad slams Russia for US 'sell out' over missiles - "They went and sold

us out to our enemies by unilaterally canceling the agreement for which they have been paid," he said at a public rally in the northeastern city of Bojnourd which was broadcast live on state television.

Medvedev, Rasmussen to discuss Russian contribution to Afghan war o NATO head in Moscow for partnership talkso Lavrov, Rasmussen to discuss coop'n in Afghanistan, ABMo Anders Fogh Rasmussen: New NATO’s Strategic Concept will reaffirm

alliance’s commitment to UN Charter - NATO Secretary General Anders Fogh Rasmussen has given an interview to Interfax ahead of his meeting with Russian President Dmitry Medvedev due on November 3.

Turkey removes Russia from threat list – Defense News: The decision was made over a meeting of the Council on October 27, where Turkey’s President Abdullah Gul chaired the discussion of the national security. Besides Russia, the decision will be effective for Greece, Iran, Syria and Iraq. The council, whose members include the president, prime minister, other top ministers and top military officials, sent the paper to the government for ratification. The top-secret document is being revised every fifth year.

Japan warns Russia against visits to disputed isles - "We have conveyed our position that the Northern Territories are Japanese territory. We would like them to act accordingly," Kyodo quoted Foreign Minister Seiji Maehara as telling reporters after a meeting with Tokyo's ambassador to Moscow, who returned on Wednesday in protest at President Dmitry Medvedev's visit to the islands, which Russia calls the Southern Kuriles.

o Japanese ambassador briefs senior officials on Medvedev's visit to disputed island - Kono returned to Tokyo earlier in the day as he was recalled by the government in protest against Medvedev's trip to Kunashiri Island, one of the islands off Hokkaido, known as the Northern Territories in Japan and the Southern Kurils in Russia.

o Japan business leader voices concern over Japan-Russia row - The ongoing cooperation in development of energy sources between Japan and Russia "has been made possible as it benefits both sides," Masamitsu Sakurai, chairman of the Japan Association of Corporate Executives known as Keizai Doyukai, said at a press conference in Tokyo. "I don't want (the current political situation) to affect it."

RF President, Qatari Emir to discuss coop'n, int'l issues - Dmitry Medvedev and Hamad bin Khalifa Al Thani are to discuss key aspects of cooperation in the trade-and-economic and investment fields. "It is planned to examine promising joint projects in the oil and gas sector, the sphere of high technologies, infrastructure, nuclear power engineering, and agriculture -- both in the territory of Russia and in the territory of Qatar," the Kremlin official said.

o Putin supports Qatar’s gas summit initiative - HH the Emir Sheikh Hamad bin Khalifa al-Thani with Russian Prime Minister Vladimir Putin in Moscow yesterday. Putin welcomed the Emir’s visit, expressing hope that it would contribute to the promotion and development of bilateral co-operation. He supported Qatar’s initiative to host a summit of gas exporting countries  next year.

o Qatar, Russia eye joint gas projects - Qatar is interested in Russian independent gas producer Novatek's liquefied natural gas project (LNG) in Arctic Russia, while export monopoly Gazprom has been invited to tender for oil and gas projects in the Gulf state, the Kremlin said in a statement.

Russian weapons shift balance of forces in Middle East – Israel's MI chief : Israeli media quote Maj.-Gen.Amos Yadlin as saying at a closed session of the parliament's Foreign Affairs and Defense Committee that Russia was providing Syria with portable, state-of-the-art anti-aircraft systems.

EU energy commissioner picks ironic day for Russia meeting - Mr Oettinger met with Russia's deputy prime minister in charge of energy, Igor Sechin, in the Russian capital on Tuesday (2 November) after traveling to Moscow for a German think-tank event. Following the meeting, Mr Sechin's spokesman told Russia's main news agencies: "Oettinger proposed considerably expanding co-operation as part of the Energy Dialogue and invited Russian specialists to join the development of the European Union's long-term energy strategy."

Bulgarian PM Vows Massive Boost of Export to Russia - Bulgaria will press for a greater share for its export goods on the Russian market during the upcoming visit of PM Vladimir Putin, stated Bulgarian PM Boyko Borisov. During the visit scheduled November 13, the two leaders will discuss not only major energy projects like the South Stream natural gas pipeline and Belene NPP, but also the opportunities to expand trade.

Bahrain-Russia links hailed - A leading political economy expert yesterday welcomed the establishment of Bahraini financial bases in Russia. International Institute for Strategic Studies (IISS) senior fellow and Russia and Eurasia programme director Oksana Antonenko was speaking during the latest edition of the think-tank's Global Perspective Series.

Putin to chair meeting on life quality for the disabled - The government press service reports that participants in the meeting are to examine a package of measures to create conditions for an unimpeded access for the disabled to various facilities and services with a view to raising the quality of their life.

UPDATE 1-Former Russian PM Chernomyrdin dies – Kremlino Former Russian PM Chernomyrdin dies aged 73

Russia implements joint projects worth 1 bln dollars in Turkmenistan - Russia was implementing over 120 joint projects and contracts worth around 1 billion U.S. dollars in Turkmenistan, Russian Deputy Prime Minister Viktor Zubkov Tuesday said on Tuesday. Zubkov, who was attending a session of the Russian-Turkmen intergovernmental commission (IGC) for economic cooperation in Turkmen capital Ashgabat, said a number of Russian companies are active in Turkmenistan.

o Turkmenistan, Russia sign agreement on Caspian rail, ferry services - The document was undersigned at a meeting of a joint intergovernmental economic cooperation commission in Ashgabat. The parties noted that the agreement will "strengthen the equitable balance of interests and a mutually beneficial partnership on a strong pragmatic basis."

Dog bite strains Estonian-Russian relations - An employee at the Russian embassy in Tallinn has been bitten by a stray dog.

Russia allocates money to repatriate sailors stranded in Canada - The Russian government resolved to allocate 2.6 million rubles (about $83,500) from the federal budget to repatriate sailors from a Russian vessel detained in Canada over debts.

o “Lyubov Orlova” crewmember to be urgently flown to Russia Elbrus cableways commercial director killed in Kabardino-Balkaria 4 dead in Sakhalin helicopter crash Russian World assembly to open in Moscow Wed - Over 1,000 Russian and

foreign scientists, cultural figures and representatives of public organizations from 70 countries will take part in the Russian World Foundation (RWF) 4th Assembly that opens here on Wednesday.

Police should oversee bidding for state contracts - prosecutor : Police and FSB officers should oversee sessions of bidding committees for major state contracts as part of efforts to fight corruption, Russia's deputy prosecutor general said on Wednesday.

Russian police could be restricted from joining political parties -"Police serve the interests of the whole of society, regardless of the political, religious or social convictions of the citizens and the police officers themselves," Sergey Bulavin said.

Radical anti-drug activist released after sentence change - The sentence of Egor Bychkov, an anti-drug activist from Urals who forced substance abusers into rehabilitation, has been overruled. Court replaced his 42-month term with a 30-month suspended sentence.

Russian Press at a Glance, Wednesday, November 3, 2010 o Russian President Dmitry Medvedev's visit to the disputed Kuril Islands

on Monday sparked a diplomatic row with Tokyo, which may disrupt the forthcoming Asia-Pacific Economic Cooperation summit in the Japanese city of Yokohama and a Russian-Japanese business forum.(Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o Observers say the results of the U.S. mid-term elections are unlikely to affect the recent reset in Russian - U.S. relations. The outcome of the polls could, however influence relations between Russia and NATO.(Vremya Novostei, The Moscow Times, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o Belarusian president Alexander Lukashenko pledged at a meeting with German and Polish foreign ministers to ensure that his country's December 19 presidential elections would be held in compliance with international standards. Poland's top diplomat said Belarus would receive a loan of 3 billion euros ($4.2 billion) "from various sources" in the next

three years, if the elections are free and fair.(Vremya Novostei, Nezavisimaya Gazeta)

o The Russian government should prepare for a drop in global oil prices, the World Bank said in its report on Russia's economy. In addition, growing food prices caused by this summer's draught and wildfires could cause some 700,000 Russians to fall below the poverty line, increasing the overall number to 19.8 million.(Vremya Novostei, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o French automaker Renault and its Japanese partner Nissan are discussing with the Russian government the possibility of raising their stake in the Russian automaker AvtoVAZ to a controlling 50 percent.(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o Russians will spend $19.5 billion online this year, mostly to pay for plane and train tickets, cell phone services and music, according to the first major research on the issue by Google Russia and Citibank. Spending by online shoppers is forecasted to grow to 800 billion rubles ($26 billion) in 2012 from the 600 billion rubles expected this year.(The Moscow Times)

o Russia's RTS stock exchange plans to sell shares in an initial public offering next year. The announcement comes amid discussion on the possible consolidation of the RTS and MICEX, Russia's equities exchange.(Vremya Novostei, Vedomosti, Kommersant)

o The lower house of the Russian parliament, the State Duma, will discuss introducing a color-coded terrorist threat scale, similar to systems used in many other countries. The scale would have four levels: none, elevated (blue), high (yellow) and critical (red).(Vedomosti, Nezavisimaya Gazeta)

o A new round of debates on pension reform has begun in Russia. Experts suspect the health and social development ministry is willing to drop the current pension scheme, which combines state pensions with personal savings.(Vremya Novostei, Rossiiskaya Gazeta)

o Russians will receive a four-day holiday to mark National Unity Day on November 4. The holiday commemorates the liberation of Moscow from Polish-Lithuanian occupation in 1612.(Vremya Novostei, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o Former oil tycoon Mikhail Khodorkovsky delivered his final statement before Moscow's Khamovnichesky court on Tuesday, saying he and his business partner Platon Lebedev have become "symbols of the fight against despotism," and that their acquittal would prove that Russia's courts were independent. The verdict will be delivered on December 15.(Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta)

Peasant Petitioners Visiting Medvedev - A Dispute Over Land Rights in the Republic of Kabardino-Balkaria Has Added Color to the Moscow Protest Scene 

Nezavisimaya/Russia Today: The unmotivated terror attacks of the criminal underground - Terrorists are not setting forth either economic or political demands. The upcoming November holidays will be celebrated by the law enforcement agencies of the North Caucasus Federal District by being on a high

counterterrorism alert. The alert has come in effect not only in the traditionally turbulent regions – Chechnya, Dagestan and Ingushetia, but also in the recently fairly stable North Ossetia and Kabardino-Balkaria.

Jailed oil executive says all of Russia has a stake in latest trial - The verdict is expected Dec. 15. In a concluding statement to the court Tuesday, Khodorkovsky said he foresaw the worst - for himself and his country. This time, he said, the future of all of Russia is at stake.

Lebedev's bank searched over Rossiisky Kapital operations – sourceo Moscow police criticised for 'circus' raid on Lebedev's banko Masked police raid on media billionaire Alexander Lebedev's Moscow

bank Russia and the future of the CTBT - Fifteen years have passed since Russia and

the United States approved the Comprehensive Test Ban Treaty (CTBT), but experts have shown little interest in the anniversary. Banning nuclear explosions is seen by analysts as a set of technical issues, beyond the reach of politics. But the CTBT is a political issue.

Prospects of Russian-Georgian relations: hypothetical scenarios – by Simon Kiladze

National Economic Trends Russia’s Services Grow at Fastest Pace Since June, PMI Data Show World Bank Reduces GDP Forecasts - Russia's gross domestic product will grow

4.2 percent this year, 4.5 percent in 2011 and 3.5 percent in 2012, the World Bank said in its latest Russian Economic Report. The World Bank raised its 2010 inflation forecast to 8 to 9 percent from 7 to 8 percent, taking a more pessimistic stance than the government and factoring in a surge in food prices seen after a severe drought killed a third of the harvest.

Financial regulator's assets inch up in September

Business, Energy or Environmental regulations or discussions Russian stock market daily morning report (November 03, 2010, Wednesday) AvtoVAZ, CTC Media, Gazprom Neft and Rosneft: Russian Preview Mostotrest Raises $388 Million in Initial Public Offering Aeroflot Grounds Airplanes for Lack of Pilots, Vedomosti Reports Russian Billionaire Lebedev Cuts Aeroflot Holding to 13.7% UC Rusal not interested in selling Norilsk Nickel's shares Usmanov, Metalloinvest Partners Said to Study $4 Billion IPO Metalloinvest, Iron-Ore Supplier to U.S. Steel, Sees Price Gains Petropavlovsk Cuts 2010 Gold Output Estimate on Delays PhosAgro Considers Rival Bid for Potash Corp., Vedomosti Says UPDATE 1-Russia's Phosagro eyes bid for Potash Corp – paper Pangaea Partners Says Renaissance Bought Stake in Zambian Broker Wärtsilä and United Shipbuilding Corporation sign Memorandum of

Understanding for co-operation Russia looks to the sun with with for its first solar power station UPDATE 1-Enel's Russia unit 9-month profit up 66 pct

Renault-Nissan could increase its stake in AvtoVAZ to controlling level in three years

Renault May Get Control of AvtoVAZ Sibur Planning to Leave Tyre Business Russia has the technology - With investors in Russian for the international

nanotechnology forum Business RT spoke with Heinz Kundert, President of SEMI Europe about plans to promote technology in Russia.

Net buying picks up steam - Virtually everything can be done through the internet from buying hi-tech gadgets to just paying the bills and Russians are hooked on that noted Aleksey Surkov, Tech lead, Google.

Russian Channel One ownership confirmed - Roman Abramovich has been officially confirmed as the 49% owner of Channel One, Russia’s leading broadcaster.

Yahoo! launches Russian version of its web portal

Activity in the Oil and Gas sector (including regulatory) First Russian oil reaches China Russia – China Pipeline delivers first oil to China October gas output: Gazprom's position firming, albeit slowly Russia asks EU to help Surgutneftegas acquire MOL shares Surgutneftegas-Rosneft merger rumors resurface Rosneft Samara Refinery Investments Signal Growing Russian Downstream Gap Bashneft Wins Tenders for Arctic Oil

Gazprom Gazprom mulls offering Eurobonds on foreign markets in 2010 Gazprom refutes new agreements on price of gas for Ukraine Gazprom Neft plans to increase oil production 6%-7% each year Gazprom, EU to collaborate on EU legislative initiative Italian Edison Sues Gazprom Subsidiary over High Gas Prices ArmRosGazprom will put into action new underground natural gas storage

reservoir at Abovian facility Gazprom's Trusty Business Model: The Strong Arm Method - The company’s

rather unconventional ways of trying to win friends and influence people. Unconventional, except for the Mafia, perhaps.

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Full Text Articles

Basic Political Developments

Ahmadinejad slams Russia for US 'sell out' over missileshttp://www.hurriyetdailynews.com/n.php?n=ahmadinejad-slams-russia-for-us-sell-out-over-missiles-2010-11-03

Wednesday, November 3, 2010TEHRAN – Agence France-Presse

President Mahmoud Ahmadinejad lashed out at Russia on Wednesday, saying it had "sold out" Iran to arch-foe the United States by canceling a deal to supply S-300 ground-to-air missiles.

"Some people who are under the influence of Satan [the United States] thought that if they can unilaterally and illegally cancel some defense agreements that they have with us, it will hurt the Iranian nation," Ahmadinejad said in reference to the missile deal between Moscow and Tehran.

"They went and sold us out to our enemies by unilaterally canceling the agreement for which they have been paid," he said at a public rally in the northeastern city of Bojnourd which was broadcast live on state television.

"I want to tell them on your behalf that we consider the deal to still be valid. They should execute it. If they don't, the Iranian nation will seek its rights, the losses and the fines on it," he said to a cheering crowd.

The remarks were Ahmadinejad's first direct reaction to Moscow's decision to cancel the delivery of the S-300 missiles.

In September, Russian President Dmitry Medvedev signed a decree banning supplies of S-300 missiles and other arms to the Islamic republic.

Medvedev, Rasmussen to discuss Russian contribution to Afghan war http://en.rian.ru/world/20101103/161193033.html

10:53 03/11/2010MOSCOW, November 3 (RIA Novosti) - Russian President Dmitry Medvedev and NATO Secretary General Anders Fogh Rasmussen, who is due to visit Moscow on Wednesday, will discuss possible deliveries of Russian helicopters to Afghanistan, the Kremlin said on Wednesday.

Rasmussen is visiting the Russian capital ahead of the Russia-NATO Council summit on November 20 in Lisbon. Medvedev has agreed to take part in the top-level talks for the first time since the August 2008 war between Russia and Georgia, which soured Russia's relations with the alliance.

During his visit to Moscow in December 2009, Rasmussen asked Russia to supply helicopters, fuel and service centers to Afghanistan and help to train Afghan pilots.

Last week, NATO spokesman James Appathurai said the alliance wants to discuss the delivery of 20 Russian helicopters to Afghanistan.

Currently Russia sells helicopters to the United States for use in Afghanistan, but does not supply arms directly to the NATO efforts in the country.

Media reports at the end of September suggested that a proposal for Russian troops to be sent to Afghanistan was on the table ahead of the NATO Council summit in Lisbon.

Russia's NATO Envoy Dmitry Rogozin dismissed the reports saying: "we've already been in Afghanistan and we didn't like it much."

Aside from Afghanistan, the NATO chief is also expected to discuss with Medvedev the Euro missile defense project and Russia's possible participation in it.

NATO head in Moscow for partnership talkshttp://rt.com/Top_News/2010-11-03/nato-rasmussen-moscow-visit.html/print

03 November, 2010, 08:18

Combating international terror, beefing up global security, and deciding the future of national defense are the key issues Russia and NATO are to work on during a visit to Moscow by NATO's Secretary General.

Anders Fogh Rasmussen will meet Russian President Dmitry Medvedev and Foreign Minister Sergey Lavrov.

Russia and NATO are stepping up cooperation efforts in terms of defense strategy in Europe and conventional arms control.

The talks are a warm-up for the NATO-Russia summit in Lisbon, which is taking place in November.

The problems on the agenda are NATO’s blueprint for global security, which the Kremlin wants to reflect Russia’s own security concerns, and the implementation of the new missile defense plan in Europe, in which Moscow wants Russia to play a prominent part.

Another important issue on the agenda is the war in Afghanistan, where NATO is seeking Russia’s help.

While Foreign Minister Lavrov said on Monday that Russia would not send soldiers to Afghanistan, Russia is definitely going to take part in operations against drugs trafficking, similar to the one carried out last week.

Interestingly, shortly after his arrival in Moscow, Anders Fogh Rasmussen wrote on his Facebook page that the time has come for a start of new relations between Russia and NATO, and that NATO sees Russia not as an enemy, but as a strategic partner.

Lavrov, Rasmussen to discuss coop'n in Afghanistan, ABM

http://www.itar-tass.com/eng/level2.html?NewsID=15649791

03.11.2010, 06.49

MOSCOW, November 3 (Itar-Tass) - Russian Minister of Foreign Affairs Sergei Lavrov meets here Wednesday with NATO Secretary General Anders Fogh Rasmussen, who arrived in the Russian capital on Tuesday, to discuss preparations for the forthcoming Russia-NATO Council summit, due to be held in Lisbon on November 20. That will be the first RF-NATO summit since the August 2008 tragedy in the Transcaucasus.

Principal matters that Rasmussen intends to consider in Moscow include preparation for the forthcoming summit, the deepening of cooperation on Afghanistan, specifically drug control, expansion of transit for coalition forces across the territory of the Russian Federation, and the so-called helicopter dossier --terms for the provision of helicopters for the Afghan army by Russia.

The sides are actively to discuss the joint analysis by the Alliance and Russia of threats to security in the 21st century. The results of the analysis are to be presented at the Lisbon summit. The forthcoming discussion will cover the broadest spectrum of subjects, including counterterrorism, fight against sea piracy, and non-proliferation issues.

November 02, 2010

Anders Fogh Rasmussen: New NATO’s Strategic Concept will reaffirm alliance’s commitment to UN Charterhttp://www.interfax.com/interview.asp?id=199773

NATO Secretary General Anders Fogh Rasmussen has given an interview to Interfax ahead of his meeting with Russian President Dmitry Medvedev due on November 3.

Question: Mr. Rasmussen, when you entered the office of NATO secretary general you named a reset in relations with Russia among your objectives. Did you succeed and what role do you assign to the upcoming Russia-NATO summit in Lisbon in this respect? Do all NATO member-countries now share your willingness to fundamentally improve relations with Russia?

Answer: I did name and make improving our relations one of my top priorities. Good relations between NATO nations and Russia make for better security for us all. We can stop wasting resources on worrying about each other and start putting those resources into cooperation to make ourselves safer against the real threats we face: terrorism, instability and drugs from Afghanistan, ballistic missiles, piracy, etc.All NATO Allies share my view. Which is why I believe the [NATO-Russia Council] NRC Summit in Lisbon can mark a true fresh start in our relations.Q.: Russia did not respond at once to your offer to hold a Russia-NATO top-level meeting along with the NATO summit. Apprehensions about possible "surprises" in the new strategic concept of the alliance were one of the reasons. As Russian Foreign Minister Sergei Lavrov said the key issue for Russia will be how the concept is going to describe the NATO attitude to international law, to the UN Charter, primarily to provisions related to the possible use of force. So, should Russia expect "surprises," including a provision on the possibility of using force by the alliance without the authorization of the United Nations? And when will NATO make the new concept known to Russia?A.: First, let me remind you that work on this update of NATO‘s Strategic Concept has been conducted in the most transparent way ever. We have talked about the Concept discussions in the NATO-Russia Council; the group of experts who worked on the first draft even held consultations in Moscow, the only partner country to which they all traveled.When it is agreed in Lisbon, the Strategic Concept will be made public. For now, as we are negotiating, you will understand that we can‘t do that in public. But I can assure you that the Strategic Concept will reaffirm NATO‘s commitment to the UN Charter. There will be no ambiguity on that.Q.: You have said that the decision on Russia‘s involvement in the development of the European missile defense system would be the most important result of the Russia-NATO summit in Lisbon. In its turn the Russian side has said it would want to hear from NATO what role it is assigned in the European missile defense system. In this context could you explain how exactly NATO sees Russia‘s involvement in the project? How does NATO headquarters see the future of European missile defense? As part of the global missile defense developed by the United States?A.: This is a complicated issue. But I think the basics are rather straightforward.First, there is a threat: more than 30 countries have or are developing ballistic missiles, some of which can already hit NATO territory and probably Russia. Second, there is a proven technology to defend against missiles launched against our cities, linking the U.S. system to existing European systems through NATO. Third, we can, and I think will, agree within NATO to build missile defense to protect not just our troops, but also our territory and populations. But - and here‘s the fourth point - cooperation between Russia and NATO would mean a more capable defense. It would also send a powerful political signal that we are, for the first time ever, cooperating to defend ourselves together.Q.: Russia has invited NATO to sign a legally binding agreement on mutual military restraint. The draft document submitted by Russia suggests defining the notion of "significant combat forces" of NATO that can be deployed in the territories of the new member-nations of the alliance. Are you ready to discuss these proposals with Russia?

A.: In 1997 NATO made clear it had no intention, no plan and no reason to deploy nuclear weapons on the territory of the new member states. The Alliance also stated that it would carry out its collective defense and other missions by ensuring the necessary interoperability, integration and capability for reinforcement rather than by additional permanent stationing of substantial combat forces. We have kept our word to the fullest.We share Russia‘s desire for transparency when it comes to the numbers and movement of conventional forces in Europe. That‘s why the NATO Allies have signed up to rejuvenate the Conventional Forces in Europe regime. Russia has also engaged in the talks now underway in Vienna, and I hope this will soon lead to an agreed framework of principles to guide future negotiations.Q.: Does NATO count on the expansion of military transit to Afghanistan via Russia? Is NATO planning to finance deliveries of Russian helicopters to Afghanistan and does this imply sending Russian military instructors to train Afghan pilots?A.: We are grateful for the Russian contribution to the process of stabilizing Afghanistan. It stems from the well understood commonality of interests. Our goals are, after all, the same: never again to allow Afghanistan to become a haven for terrorists and to help the Afghan government to provide for its own security, including by fighting the poppy trade.To meet these goals we have been training together with Russia counter narcotics experts from Afghanistan and neighboring countries. Allies have used the railway transit arrangements offered by Russia to move supplies to [International Security Assistance Force] ISAF via Russian territory, and we are grateful for that.Because of the success of these projects we are currently discussing ways to broaden both the current transit agreement (to include for example the return of goods from Afghanistan) as well as counter-narcotics training.On top of this I proposed last year - during my first visit to Moscow - that Russia considers providing helicopters to Afghan forces and that we develop a package of maintenance training and spare parts assistance to go with it. I am glad to say that talks are taking place to define such a package and how we could finance that. I am optimistic that agreement will be reached, but it is too early to speak about the details of the training offer.Q.: Tbilisi expects that the Lisbon summit will confirm the NATO intention to admit Georgia to its ranks. Are these hopes justified?A.: During the 2008 summit in Bucharest Allies decided to offer a clear perspective of membership to Georgia. This decision remains in force. Membership depends however on each candidate‘s Euro-Atlantic aspirations and to the extent to which it meets the required standards.

Turkey removes Russia from threat list – Defense News

http://www.itar-tass.com/eng/level2.html?NewsID=15649920&PageNum=0

03.11.2010, 08.37

WASHINGTON, November 3 (Itar-Tass) - Turkey's National Security Council endorsed a new national security document, or white paper, removing Russia from a list of potential threats to the country's national security, America’s Defense News weekly reported on Wednesday.

The decision was made over a meeting of the Council on October 27, where Turkey’s President Abdullah Gul chaired the discussion of the national security. Besides Russia, the decision will be effective for Greece, Iran, Syria and Iraq. The council, whose members include the president, prime minister, other top ministers and top military officials, sent the paper to the government for ratification. The top-secret document is being revised every fifth year.

“This is the first time since Turkey joined NATO in the early 1950s that Russia is not classified as a potential enemy,” the Defense News reports. “During the Cold War, Turkey defended NATO's southeastern flank against the former Soviet Union.”

Japan warns Russia against visits to disputed isleshttp://www.reuters.com/article/idUSTRE6A224J20101103

4:01am EDT

TOKYO (Reuters) - Japan warned Moscow on Wednesday against more visits to rocky islands claimed by both countries, Kyodo news agency reported, after Russia's president stopped off in one of the isles this week, sparking a diplomatic row.

"We have conveyed our position that the Northern Territories are Japanese territory. We would like them to act accordingly," Kyodo quoted Foreign Minister Seiji Maehara as telling reporters after a meeting with Tokyo's ambassador to Moscow, who returned on Wednesday in protest at President Dmitry Medvedev's visit to the islands, which Russia calls the Southern Kuriles.

(Reporting by Linda Sieg; Editing by Alex Richardson)

Japanese ambassador briefs senior officials on Medvedev's visit to disputed islandhttp://news.xinhuanet.com/english2010/world/2010-11/03/c_13589362.htm

2010-11-03 16:19:01

TOKYO, Nov. 3 (Xinhua) -- Japanese Ambassador to Russia Masaharu Kono on Wednesday briefed Foreign Minister Seiji Maehara and other senior government officials

on Russian President Dmitry Medvedev's visit to a disputed island held by Russian but claimed by Japan.

Kono returned to Tokyo earlier in the day as he was recalled by the government in protest against Medvedev's trip to Kunashiri Island, one of the islands off Hokkaido, known as the Northern Territories in Japan and the Southern Kurils in Russia.

"I will temporarily stay in Japan as I was ordered to explain the current Russian situation," the envoy was quoted as saying by local media before leaving Moscow late Tuesday.

He also told reporters that he had no idea how long he would stay home.

At a press conference Tuesday, Maehara announced the decision to recall the envoy temporarily. It was a further step taken by Japan to protest the visit of Medvedev, who became the first leader from Russia or the former Soviet Union to set foot on the disputed islands.

On Monday, Maehara summoned Russian ambassador to Japan Mikhail Bely to lodge a protest shortly after Medvedev landed on the island.

Japan business leader voices concern over Japan-Russia rowhttp://mdn.mainichi.jp/mdnnews/business/news/20101103p2g00m0bu047000c.html

TOKYO (Kyodo) -- A Japanese business leader expressed concern Tuesday that the rising tension between Japan and Russia following Russian President Dmitry Medvedev's visit to a disputed island off Hokkaido may have a negative impact on bilateral cooperation over energy development.

The ongoing cooperation in development of energy sources between Japan and Russia "has been made possible as it benefits both sides," Masamitsu Sakurai, chairman of the Japan Association of Corporate Executives known as Keizai Doyukai, said at a press conference in Tokyo. "I don't want (the current political situation) to affect it."

Concerning an existing opinion that Japan should take a retaliatory measure against the president's visit to Kunashiri Island, Sakurai said the Japanese government should tell Russia what it has to say, but that it should be careful in dealing with the matter so that the territorial issue will not affect the economic ties between the countries.

Medvedev visited Kunashiri, one of four Russian-held northern islands claimed by Japan, for a few hours despite Japan's earlier warning that such an action could affect Japan-Russia ties. He is the first leader from Russia or the former Soviet Union to set foot on any of the islands off Hokkaido since they were occupied by the Soviet Union at the end of World War II.

(Mainichi Japan) November 3, 2010

RF President, Qatari Emir to discuss coop'n, int'l issues

http://www.itar-tass.com/eng/level2.html?NewsID=15649608&PageNum=0

03.11.2010, 03.55

MOSCOW, November 3 (Itar-Tass) – Efforts to deepen cooperation between the Russian Federation (RF) and the State of Qatar in the gas sector are to be discussed here on Wednesday by RF President Dmitry Medvedev and Qatar's Emir Hamad bin Khalifa Al Thani, who arrived in Moscow on Tuesday for an official visit, a Kremlin press service official has told Itar-Tass.

The press service official said, "Our two countries have common intention to strengthen constructive political interaction and step up mutually beneficial cooperation on a broad spectrum of areas." "This refers primarily to the deepening of Russo-Qatari interaction in the gas sphere, including that within the framework of the Forum of Gas Exporting Countries (FGEC)," the Kremlin official pointed out.

Dmitry Medvedev and Hamad bin Khalifa Al Thani are to discuss key aspects of cooperation in the trade-and-economic and investment fields. "It is planned to examine promising joint projects in the oil and gas sector, the sphere of high technologies, infrastructure, nuclear power engineering, and agriculture -- both in the territory of Russia and in the territory of Qatar," the Kremlin official said.

"During the (upcoming) talks at summit level, it is also planned to compare positions on a whole lot of items that are on the global and regional agenda," the presidential administratio official said.

Putin supports Qatar’s gas summit initiative

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=396255&version=1&template_id=57&parent_id=56

HH the Emir Sheikh Hamad bin Khalifa al-Thani with Russian Prime Minister Vladimir Putin in Moscow yesterday. Putin welcomed the Emir’s visit, expressing hope that it would contribute to the promotion and development of bilateral co-operation. He supported Qatar’s initiative to host a summit of gas exporting countries  next year.

The meeting was attended by HE the Prime Minister and Minister of Foreign Affairs Sheikh Hamad bin Jassim bin Jabor al-Thani and members of the official delegation accompanying HH the Emir. The Emir is due to meet President Dmitry Medvedev today. Russia’s Rosatom State Corporation and Qatar’s Ministry of Environment later signed a memorandum on the use of nuclear energy for peaceful purposes.

Qatar, Russia eye joint gas projects

http://www.tradearabia.com/news/OGN_188428.html

Wednesday, November 03, 2010Moscow: 2 hours and 32 minutes ago

The emir of Qatar met Russian Prime Minister Vladimir Putin on Tuesday to discuss cooperation in the gas industry, with joint gas production projects on the table.

Qatar is home to the headquarters of the Gas Exporting Countries Forum (GECF), a loose grouping of producers of the  fuel which has so far failed to co-ordinate production caps in the manner of the Organisation of Petroleum Exporting Countries (Opec).   

The Russian chairman, Leonid Bokhanovsky, has said the group will discuss an Opec-style market model at its next meeting.

Qatari Emir Sheikh Hamad bin Khalifa Al-Thani met on Tuesday with Prime Minister Vladimir Putin who said Russia, the world's largest gas producer, backed a plan for a summit in Qatar later this year.

Qatar is interested in Russian independent gas producer Novatek's liquefied natural gas project (LNG) in Arctic Russia, while export monopoly Gazprom has been invited to tender for oil and gas projects in the Gulf state, the Kremlin said in a statement.

State controlled VTB, Russia's second-largest bank, is expected to sign a memorandum of understanding with sovereign wealth fund Qatar Holding, the Kremlin said, without elaborating.   

Al-Thani is due to meet President Dmitry Medvedev on Wednesday. - Reuters

Russian weapons shift balance of forces in Middle East – Israel's MI chiefhttp://en.rian.ru/world/20101103/161190850.html

05:19 03/11/2010

Military cooperation Moscow and Damascus shifts balance of forces in the Middle East "back to the 70's," when Israel was close to being defeated by Syria, outgoing chief of Israel's military intelligence said.

Israeli media quote Maj.-Gen.Amos Yadlin as saying at a closed session of the parliament's Foreign Affairs and Defense Committee that Russia was providing Syria with portable, state-of-the-art anti-aircraft systems.

"These are fairly inexpensive missiles compared to the S-300 but they are no less lethal or effective," the Ynet News portal quoted the official as saying.

The head of military intelligence also said that Russian specialists are involved in upgrading old Syrian weapons systems.

"Syria is engaged in a very intense campaign to procure highly advanced weapons; so advanced in fact that anything that comes off the Russian assembly lines ends up in Syria," he said on Tuesday at his last meeting with lawmakers before retirement.

The official also warned that Hezbollah could easily get all the most advanced weapons systems possessed by Syria simply by asking for them.

"If it wanted to, Hezbollah could take over Lebanon in a matter of hours. This is not very likely but there is no military force that can stand up to Hezbollah in Lebanon," he said.

According to the official, a new conflict, if emerges, is likely to be far deadlier than Israel's last two military conflicts – the 2006 Israeli-Hezbollah war in Lebanon and the offensive on Gaza in late 2008 – early 2009.

"The next round won't be focused on one theater but rather, will incorporate two or three," he said. "One cannot predict the future according to what happened during Operation Cast Lead or the Second Lebanon War. It will be much bigger, much wider in scope, and with many more casualties."

Israel's enemies "believe that the only way to overcome Israel's deterrence is through long-range missile fire and improving air defense capabilities," the Jerusalem Post quoted the official as saying.

TEL AVIV, November 3 (RIA Novosti)

EU energy commissioner picks ironic day for Russia meetinghttp://euobserver.com/9/31185

ANDREW RETTMAN

Today @ 09:29 CET

EUOBSERVER / BRUSSELS - EU energy commissioner Gunther Oettinger has invited Russia to contribute to a new EU energy strategy, speaking in Moscow on an important day in the trial of oil tycoon Mikhail Khodorkovsky with the very man who took away his company.

Mr Oettinger met with Russia's deputy prime minister in charge of energy, Igor Sechin, in the Russian capital on Tuesday (2 November) after traveling to Moscow for a German think-tank event.

Following the meeting, Mr Sechin's spokesman told Russia's main news agencies: "Oettinger proposed considerably expanding co-operation as part of the Energy Dialogue and invited Russian specialists to join the development of the European Union's long-term energy strategy."

When asked for clarification by EUobserver, a spokesman for Mr Oettinger played down the nature of the offer: "He did not go so far as to include them in the consultation process on the 2050 strategy. There is no formal role for Russia in this process. But, of course, the commission is ready to hold discussions with its Russian partners, including on the 2050 roadmap, especially on the gas aspects [of the strategy paper]."

The EU-Russia Energy Dialogue is a diplomatic process launched on 30 October 2000 to enhance EU energy security.

The EU buys over 40 percent of its gas imports and 30 percent of its oil imports from Russia. Its long-term energy strategy is currently based on diversification of suppliers and renewable resources. But Russia wants EU backing for South Stream, a gas pipeline that would strengthen its near-monopoly on exports from Central Asia.

The Oettinger-Sechin meeting took place on the last day in the trial of fallen Russian oligarch Mikhail Khodorkovsky.

Russian authorities in 2003 arrested Mr Khodorkovsky on charges of fraud and tax evasion and smashed up his massive oil company, Yukos. The second trial, on embezzlement, could see him stay in jail until 2017. Mr Khodorkovsky has accused Mr Sechin of personally orchestrating the Yukos affair for political motives. The deputy PM is also the chairman of Rosneft, the Russian oil firm which bought most of Yukos' assets at knock-down prices.

Speaking out in court in Moscow on Tuesday, Mr Khodorkovsky said: "A state that destroys its best companies, which are ready to become global champions, a country that holds its own citizens in contempt, trusting only in bureaucracy and the special services, is a sick state."

One of his lawyers, Sandy Saunders, at a press conference the same day called the case "a watershed event in Russia's turn away from the rule of law." "This case is known to the EU and US leaders. It's being watched and it will be remembered," he added.

Asked by this website whether Mr Oettinger's choice of date for the Sechin meeting was a poor one, an EU official said the date was linked to the 10th anniversary of the EU-Russia Energy Dialogue.

Mr Oettinger's spokesman said the Sechin offer was not part of his official business: "It was not officially indicated in the meetings. It was not officially said." The spokesman declined to comment on the Khodorkovsky case.

The Khodorkovsky verdict is expected on 15 December, one week after an EU-Russia summit in Brussels.

Mr Oettinger while in Russia also met with Gazprom boss Alexei Miller during which he gave his approval for a new Polish-Russian gas contract until 2022.

Bulgarian PM Vows Massive Boost of Export to Russiahttp://www.turkishweekly.net/news/109187/bulgarian-pm-vows-massive-boost-of-export-to-russia.html

Bulgaria will press for a greater share for its export goods on the Russian market during the upcoming visit of PM Vladimir Putin, stated Bulgarian PM Boyko Borisov.

During the visit scheduled November 13, the two leaders will discuss not only major energy projects like the South Stream natural gas pipeline and Belene NPP, but also the opportunities to expand trade.

"Russia is a natural marked for Bulgaria. Why have we forgotten that?" asked rhetorically the Bulgarian PM.

He explained that in the past Bulgaria has exported massive amounts of wine, foods and other goods from the light industries to Russia and it is high time for it to reclaim that.

"This is pure business and pure economics - fresh money for our country," quipped Borisov.

In an interview given earlier Tuesday for ITAR-TASS, the Bulgarian PM had reconfirmed his commitment to Belene and South Stream, but not to the Burgas-Alexandroupoli oil pipeline.

Bahrain-Russia links hailed   http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=290765

  Posted on » Wednesday, November 03, 2010

MANAMA: A leading political economy expert yesterday welcomed the establishment of Bahraini financial bases in Russia.

International Institute for Strategic Studies (IISS) senior fellow and Russia and Eurasia programme director Oksana Antonenko was speaking during the latest edition of the think-tank's Global Perspective Series.

Speaking during a question and answer session at the IISS Middle East base at Bahrain Financial Harbour, Ms Antonenko said her native country should be very open to the introduction of Islamic banks.

"I think Russia would be very welcoming to the entrance of Islamic financial institutions, and particularly those from Bahrain," she said.

"It would be seen as another step in Russia's liberalisation in a way and certainly a step towards becoming the global financial centre it wants to be.

"At the moment, Russia is too closely connected to Europe and especially the financial hub of central London, but the introduction of legitimate Islamic financial activity could be great.

"It would create a strong link with this part of the world that would be very welcomed."

Among other topics touched on by Ms Antonenko during her speech was Russia's relationship with and policies in Iran.

Although acknowledging Russia's support in building Iran's nuclear power capabilities, she claimed policies were now shifting.

"The priority for Russia since the dawn of the economic crisis is to focus internally on getting the country back to, or at least near to, the levels of economic growth it enjoyed in the years leading up to it," she said.

"The policy for Iran has also changed considerably as Russia has emerged as a supporter

of the US and this relationship will continue to strengthen."

Ms Antonenko is a graduate from Moscow State University and Harvard University's Kennedy School of Government.

Overseeing the institute's work in Russia, Central Asia, South Caucasus and Western New Independent States, she is a frequent contributor to IISS publications.

Putin to chair meeting on life quality for the disabled

http://www.itar-tass.com/eng/level2.html?NewsID=15649670&PageNum=0

03.11.2010, 05.26

MOSCOW, November 3 (Itar-Tass) - Russian Prime Minister Vladimir Putin on Wednesday is to chair a meeting to discuss the formation of an accessible environment for the disabled. Those present are to consider the draft state 2011-2015 Accessible Environment programme (AEP).

The government press service reports that participants in the meeting are to examine a package of measures to create conditions for an unimpeded access for the disabled to various facilities and services with a view to raising the quality of their life.

Pension Fund data have it that there are now about 13 million disabled in Russia, with1.8 million of them having Disability Category (DC) 1, and 6.6 million are of DC2, the press service pointed out. There are 544,000 children among the handicapped people. Pensioners account for 66 percent of the disabled, 30 percent of able-bodied and 26 percent of them are employed.

It is planned that as a result of the implementation of the AEP new job opportunities will be created for the disabled, and the number of social welfare, transport, engineering infrastructure and housing facilities, adapted to meet the needs of the handicapped people, will increase.

UPDATE 1-Former Russian PM Chernomyrdin dies – Kremlinhttp://af.reuters.com/article/energyOilNews/idAFLDE6A204L20101103

Wed Nov 3, 2010 6:01am GMT

MOSCOW Nov 3 (Reuters) - Former Russian prime minister Viktor Chernomyrdin, who created gas behemoth Gazprom, has died, the Kremlin said on Wednesday. He was 72.

Chernomyrdin was appointed prime minister by President Boris Yeltsin in 1992 and served until 1998 with a very short spell as acting president while Yeltsin underwent heart surgery.

He was the longest serving prime minister of post-Soviet Russia but is best known for crafting Gazprom, the world's biggest gas company, out of the Soviet Union's best gas assets.

After the creation of Gazprom, Chernomyrdin, a former Soviet minister of gas, was elected board chairman of the gas giant. (Writing by Thomas Grove and Guy Faulconbridge; Editing by Elizabeth Fullerton)

Former Russian PM Chernomyrdin dies aged 73

http://en.rian.ru/russia/20101103/161192240.html

09:26 03/11/2010

Former Russian Prime Minister Viktor Chernomyrdin died early on Wednesday morning at the age of 73, a source in the political establishment said.

"Chernomyrdin died at 4 am Moscow time [01:00 GMT]. He had been severely ill," the source said.

After serving as Russian prime minister under President Boris Yeltsin from 1992-1998, Chernomyrdin was made Russian ambassador to Ukraine in 2001, a post he held until 2009, when he was designated as a presidential advisor.

Chernomyrdin was a steadfast supporter of Yeltsin and supporter of privatization and a number of other reforms, although he started his career by opposing many economic changes.

Chernomyrdin is best known in the Russian-speaking world for his colorful use of language and coined the now popular proverb "we wanted the best, but it turned out as always," uttered after the Russian Central Bank carried out an unsuccessful monetary exchange in the early 1990s.

MOSCOW, November 3 (RIA Novosti)

Russia implements joint projects worth 1 bln dollars in Turkmenistan http://english.peopledaily.com.cn/90001/90777/90853/7186419.html

09:48, November 03, 2010

Russia was implementing over 120 joint projects and contracts worth around 1 billion U.S. dollars in Turkmenistan, Russian Deputy Prime Minister Viktor Zubkov Tuesday said on Tuesday.

Zubkov, who was attending a session of the Russian-Turkmen intergovernmental commission (IGC) for economic cooperation in Turkmen capital Ashgabat, said a number of Russian companies are active in Turkmenistan.

"In all, 138 companies with Russian investment are operating in the Turkmen market," he said quoted by the Russian government's website.

Zubkov said this bilateral dialogue was constructive and mutually useful, as concrete measures to step up trade relations had been taken since the previous IGC session.

In particular, Moscow and Ashgabat opened Russian-Turkmen and Turkmen- Russian trading houses which should help broaden the range and scope of bilateral deliveries, Zubkov said.

Today's session focused on cooperation in the fuel and energy sector, he said, adding that the session was fruitful as the two countries signed a package of documents.

"That will allow to launch the international railway ferry service between the ports of Makhachkala and Turkmenbashi at full capacity," he said.

In addition, Zubkov said Ashgabat would host the third economic forum of Turkmenistan and Russia and the Days of Business Cooperation between the two countries in 2011.

Source: Xinhua

Turkmenistan, Russia sign agreement on Caspian rail, ferry services

http://en.trend.az/capital/business/1776258.html

03.11.2010 12:31 

Turkmenistan, Ashgabat, Nov. 3 / Trend H.Hasanov /

Turkmenistan and Russia have signed an intergovernmental agreement on railway and ferry crossing between the ports of the two countries, an official Turkmen source reported.

The document was undersigned at a meeting of a joint intergovernmental economic cooperation commission in Ashgabat. The parties noted that the agreement will

"strengthen the equitable balance of interests and a mutually beneficial partnership on a strong pragmatic basis."

The agreement was prepared in 2008 and provides for a direct connection between the Russian port of Olya near Astrakhan and Makhachkala and the port city of Turkmenbashi. The route will increase freight traffic from Turkmenistan to Russia, Georgia, Ukraine and Belarus.

Turkmen President Gurbangulu Berdimuhammedov earlier stated that he stands for "increasing the volume of rail and sea transportation in the region, including through new routes."

Dog bite strains Estonian-Russian relationshttp://baltic-review.com/2010/11/03/dog-bite-strains-estonian-russian-relations/

An employee at the Russian embassy in Tallinn has been bitten by a stray dog.

A deplorable situation, writes the tabloid Õhtuleht:

“There is a big paradox here, because Mayor Edgar Savisaar is generally considered pro-Russian, in light of his trips to Russia and his cooperation with the Kremlin party. But now the embassy has publicly protested over the incident, and it is in the interest of everyone that this is not swept under the carpet. Many normal citizens have already fallen victim to the dogs, but when they complained to the authorities there was no reaction.

… The dog situation in Tallinn has got out of control. Our parks are full of dogs without leashes or muzzles. These animals harass passers-by, or at the very least put them under considerable psychological strain. Joggers give the dogs a wide berth, parents stand protectively in front of their children and postal workers risk their necks in family neighbourhoods, to say nothing of the ubiquitous filth.”

Russia allocates money to repatriate sailors stranded in Canadahttp://en.rian.ru/russia/20101103/161190520.html

04:19 03/11/2010

The Russian government resolved to allocate 2.6 million rubles (about $83,500) from the federal budget to repatriate sailors from a Russian vessel detained in Canada over debts.

The Lyubov Orlova expedition vessel, crewed by at least 51 Russian nationals, was seized in the Newfoundland port of St. John's in late September following a suit by a

haulage contractor over a $251,000 debt. The repatriation of Russians was postponed at least twice.

The government ordered to "allocate up to 2.6 million rubles, equivalent to $83,500, to the Russian Foreign Ministry... to carry out measures needed to evacuate Russian nationals, crew members of the Lyubov Orlova ship, from the city of St. John's."

It was earlier announced that sixteen to twenty sailors will not be repatriated together with the others – they will remain on board the ship to assure its security.

MOSCOW, November 3 (RIA Novosti)

“Lyubov Orlova” crewmember to be urgently flown to Russia http://english.ruvr.ru/2010/11/03/31311444.html

Nov 3, 2010 10:13 Moscow Time

One of the crew of the Russian “Lyubov Orlova” cruise liner, impounded at St. John’s port in Canada in September, will be urgently flown to Russia due to ill-health reasons. The news was leaked by an informed diplomatic source. Another 27 crewmembers will leave Canada for Russia this Saturday. The liner, used for cruises off Canada’s coast, was impounded on return from its last cruise by a court decision due to a commercial dispute. The Russian seamen have brought legal action against the ship owner in a bid to ensure the payment of wage arrears.

Elbrus cableways commercial director killed in Kabardino-Balkaria

http://www.itar-tass.com/eng/level2.html?NewsID=15650084

03.11.2010, 09.41

NALCHIK, November 3 (Itar-Tass) - Commercial director of the Elbrus region cable roads Yusup Taukenov was killed in Nalchik, a source in the republican law enforcement agencies told Itar-Tass on Wednesday.

“Unidentified killers called Taukenov at about 9 p.m. Moscow time on November 2 in the street from his house in Kalmykova Street in Nalchik and gunned down from the automatic rifle. The man died instantaneously,” the source said. A criminal case was instituted for murder and illegal circulation of weapons and ammunition.

4 dead in Sakhalin helicopter crashhttp://english.ruvr.ru/2010/11/03/31295698.html

Nov 3, 2010 06:10 Moscow Time

Nov 3, 2010 06:10 Moscow Time Aviation officials on Russia’s Far Eastern Sakhalin island have confirmed the death of all four crew members of a Mil-8 helicopter that went down during a training flight on Tuesday evening.

Experts are at the site of the crash trying to determine the cause of the disaster.

Russian World assembly to open in Moscow Wed

http://www.itar-tass.com/eng/level2.html?NewsID=15649480&PageNum=0

03.11.2010, 01.56

MOSCOW, November 3 (Itar-Tass) - Over 1,000 Russian and foreign scientists, cultural figures and representatives of public organizations from 70 countries will take part in the Russian World Foundation (RWF) 4th Assembly that opens here on Wednesday.

Participants in the RWF Assembly will discuss most acute issues concerning the use of the Russian language, and work out new approaches to and orientations for the RWF development and accomplishment of its mission. The Assembly has been organized by the RWF.

RWF Director Vyacheslav Nikonov has pointed out that the main purpose of the forum is "patently to reflect the mounting international interest in the study of the Russian language and culture".

"A wide range of matters relating to the history and philosophy of the 'Russian world', the popularization of the Russian culture and language, the problems of diasporas, and the development of the Russian-language media are being brought up for discussion at the Assembly," Nikonov said.

Police should oversee bidding for state contracts - prosecutorhttp://en.rian.ru/russia/20101103/161193997.html

11:49 03/11/2010

Police and FSB officers should oversee sessions of bidding committees for major state contracts as part of efforts to fight corruption, Russia's deputy prosecutor general said on Wednesday.

Police and the Federal Security Service (FSB) should also be notified in advance of any potential state contracts, Yury Gulyagin said.

The statement comes two months after President Dmitry Medvedev ordered a probe into accusations of overpricing in the southern Rostov region.

The row erupted after it was revealed that three medical X-ray machines for a local hospital were bought for $9 million, three times their usual price.

Medvedev has pledged to tackle corruption but analysts say his efforts have so far borne little fruit.

KHABAROVSK, November 3 (RIA Novosti)

Russian police could be restricted from joining political partieshttp://en.rian.ru/russia/20101103/161193816.html

11:33 03/11/2010MOSCOW, November 3 (RIA Novosti) - Russian police officers could be restricted from joining political parties in order to ensure anonymity in police affairs, the first deputy Interior Minister said on Wednesday.

"Police serve the interests of the whole of society, regardless of the political, religious or social convictions of the citizens and the police officers themselves," Sergey Bulavin said.

The measure is part of a police reform bill, which was posted for public discussion in early August at www.zakonoproekt2010.ru to allow the public to discuss the possible changes to the law. Some amendments have already been made to the original text after discussions were considered.

If passed, the bill will come into effect from March 2011.

The state of Russia's police came to the fore after a number of high-profile police scandals, including the random shooting of several people in a supermarket by an off-duty police officer in April 2009.

Radical anti-drug activist released after sentence changehttp://rt.com/Top_News/2010-11-03/anti-drug-activist-released.html/print

03 November, 2010, 11:21

The sentence of Egor Bychkov, an anti-drug activist from Urals who forced substance abusers into rehabilitation, has been overruled. Court replaced his 42-month term with a 30-month suspended sentence.

Earlier, Bychkov and two of his associates were found guilty of the kidnapping and illegal detention of drug addicts, which they did to force them into abstention. Defense counsel appealed against the sentence. The ruling of the higher court opted for milder punishment for all the accused, reports Interfax news agency.

The case of Bychkov and the action group “City without Drugs” which he heads in the Urals city of Nizhny Tagil has drawn nationwide attention. Even President Dmitry Medvedev commented on it, saying the case needs closer consideration.

The group’s supporters believe that the investigation against the organization was instilled by drug gangs and corrupt officials.

Russian Press at a Glance, Wednesday, November 3, 2010http://en.rian.ru/papers/20101103/161191936.html

08:44 03/11/2010

POLITICS

Russian President Dmitry Medvedev's visit to the disputed Kuril Islands on Monday sparked a diplomatic row with Tokyo, which may disrupt the forthcoming Asia-Pacific Economic Cooperation summit in the Japanese city of Yokohama and a Russian-Japanese business forum.

(Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

Observers say the results of the U.S. mid-term elections are unlikely to affect the recent reset in Russian - U.S. relations. The outcome of the polls could, however influence relations between Russia and NATO.

(Vremya Novostei, The Moscow Times, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

Belarusian president Alexander Lukashenko pledged at a meeting with German and Polish foreign ministers to ensure that his country's December 19 presidential elections would be held in compliance with international standards. Poland's top diplomat said

Belarus would receive a loan of 3 billion euros ($4.2 billion) "from various sources" in the next three years, if the elections are free and fair

(Vremya Novostei, Nezavisimaya Gazeta)

ECONOMY

The Russian government should prepare for a drop in global oil prices, the World Bank said in its report on Russia's economy. In addition, growing food prices caused by this summer's draught and wildfires could cause some 700,000 Russians to fall below the poverty line, increasing the overall number to 19.8 million

(Vremya Novostei, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

VEHICLES & ENGINEERING

French automaker Renault and its Japanese partner Nissan are discussing with the Russian government the possibility of raising their stake in the Russian automaker AvtoVAZ to a controlling 50 percent.

(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

TELECOMS & IT

Russians will spend $19.5 billion online this year, mostly to pay for plane and train tickets, cell phone services and music, according to the first major research on the issue by Google Russia and Citibank. Spending by online shoppers is forecasted to grow to 800 billion rubles ($26 billion) in 2012 from the 600 billion rubles expected this year.

(The Moscow Times)

BANKING & FINANCE

Russia's RTS stock exchange plans to sell shares in an initial public offering next year. The announcement comes amid discussion on the possible consolidation of the RTS and MICEX, Russia's equities exchange.

(Vremya Novostei, Vedomosti, Kommersant)

DEFENCE

The lower house of the Russian parliament, the State Duma, will discuss introducing a color-coded terrorist threat scale, similar to systems used in many other countries. The scale would have four levels: none, elevated (blue), high (yellow) and critical (red).

(Vedomosti, Nezavisimaya Gazeta)

SOCIETY

A new round of debates on pension reform has begun in Russia. Experts suspect the health and social development ministry is willing to drop the current pension scheme, which combines state pensions with personal savings.

(Vremya Novostei, Rossiiskaya Gazeta)

Russians will receive a four-day holiday to mark National Unity Day on November 4. The holiday commemorates the liberation of Moscow from Polish-Lithuanian occupation in 1612.

(Vremya Novostei, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

Former oil tycoon Mikhail Khodorkovsky delivered his final statement before Moscow's Khamovnichesky court on Tuesday, saying he and his business partner Platon Lebedev have become "symbols of the fight against despotism," and that their acquittal would prove that Russia's courts were independent. The verdict will be delivered on December 15.

(Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta)

November 2, 2010Peasant Petitioners Visiting Medvedev

http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1288721028

By Rose GriffinRussia Profile

A Dispute Over Land Rights in the Republic of Kabardino-Balkaria Has Added Color to the Moscow Protest Scene    Since July a small group of men from the Republic of Kabardino-Balkaria have been protesting by camping out on the Manezhnaya Square in central Moscow. The ethnic Balkars sit in front of the Kremlin, keeping an eye on the State Duma and waiting for a response from Russian President Dmitry Medvedev to the petition they lodged on land rights. While authorities have given the protestors little credence, their discontent raises new questions about governance in the mountainous North Caucasus republic.   “It’s the most prestigious hotel in Moscow – look at our view of the Kremlin,” said Muradin Rahayev, the director of the Balkar protest, referring to the bench his group occupies on the Manezhnaya Square. Of the 12 protestors who first came to occupy the

bench on July 7 only six remain, and Rahayev is one of them. He said that the protest was conceived as an attempt to combat discrimination at home, particularly over the distribution of land, in a peaceful way. “We want to show the president that not all people from the Caucasus resolve their issues with arms. We also want to show that this issue can be resolved peacefully, that no issue is worth even a single life,” he said. So what exactly are the Balkars concerned about? Ostensibly, they want to see Russian Federal Law 131, which governs the organization of local self-government within the country, properly implemented in the republic. This would involve designating land, which had been common property, to each ethnic group. But the republic’s government has not complied with this law so far.

In an interview with Kommersant at the beginning of October, Republic of Kabardino-Balkaria President Arsen Kanonov defended his administration’s decision not to implement the law. “I think the fact that we didn’t implement this law in the way it was presented to us saved the republic from further problems,” he said. Kanonov added that land, which both Kabardins and Balkars have a claim to, has been put under the republic’s authority and classified as “distant pasture land” to prevent inter-ethnic tension.

Earlier this summer Kanonov told Interfax news agency that implementing Federal Law 131 would lead to a disparity in the amount of land each ethnic group owns: “Russian settlements house approximately 40 people per square kilometer; Kabardin settlements 78 people per square kilometer; and Balkar settlements 14 people per square kilometer,” Kanonov said.

Rahayev said the failure to implement Law 131 was illegal. “The republic’s decision doesn’t correspond to the laws of the Russian Federation and the Russian Constitution,” he said. The protestors cite a Constitutional Court ruling that states that the republic’s authorities must find a solution to satisfy all parties.

However, Djamila Khagarova, Kanonov’s press secretary, described the protest as a public relations campaign. “Colorful mountain men in white sheepskin hats and cloaks amaze Muscovites and particularly foreigners. The protestors understand that this is going to evoke interest and attract attention.” Khagarova said that a timetable to resolve the land question has already been established, and is being overseen by the Presidential Envoy to the North Caucasus Alexander Khloponin. “Balkars from Kabardino-Balkaria met the protestors in Moscow and tried to explain to them that the issue is being resolved. In the areas of Khasanya and Belaya Rechka voting is taking place on whether they will remain part of Nalchik,” Khagarova said, adding that the protestors “didn’t want to leave the place where they are conducting their PR campaign under any circumstances.” Furthermore, Khagarova said that the Balkar protestors were earlier invited to sit on the Kabardino-Balkaria parliamentary committee established to resolve the land issue. 

While Rahayev said that the group protesting in Moscow had not been contacted by the authorities since the protest began, their counterparts in Essentuki in Kabardino-Balkaria have.  The group, which went on a hunger strike on July 10, has intermittent contact with Khloponin’s representatives. “The hunger strikers in Essentukui told us that Khloponin doesn’t understand what we’re doing. Of course he lives on a different level, if he came and saw what we were doing, saw where we lived, he would understand us,” Rahayev said. Rahayev also alleged that Balkars, who account for 11 percent of the republic’s population (compared to the Kabardin community’s 55 percent), are suffering from wider discrimination. “Our people are losing their land, their identity, culture, we can’t develop our sports. If this continues in 15 years we will have passed the point of no return,” Rahayev said.   Rahayev compared the situation at home with that in the neighboring Republic of Karachayevo-Cherkessia. “The Karachay have the majority in their republic. The Kabardin dominate us in Kabardino-Balkaria. But Khloponin appointed a Cherkess as prime minister in Karachayevo-Cherkessia, so why didn’t he appoint a minority prime minister in Kabardino-Balkaria? Why isn’t there a Kabardin prime minister? We have had no answer to this question yet,” Rahayev said.  The protestors are also angry about the lack of Balkar representation in the wrestling federation. “Wrestling is the most popular sport in the Caucasus and our federation is run by Kabardins,” Rahayev said to murmurs of agreement from his fellow protestors.  For the time being Rahayev and his fellow protestors have no plans to go home. The Balkar and the ethnically-related Karachay diasporas have equipped them for the winter ahead. Rahayev pointed to the matching ski jackets that they are all wearing underneath their distinctive black cloaks and sheepskin hats, saying they were sent by their diaspora in Germany.  The police have also helped and protected the protestors during their time in the Russian capital. This surprised the group, not least because the Balkars have no formal permission to protest there. “We didn’t receive any permits to be here, we just lodged our petition with the president and came and sat here,” Rahayev said. “We have to stay here until the issue is resolved, otherwise young people will take it into their own hands, which would not be good for us, for the country, or for any of the Turkic peoples of Russia. We are prepared to stand here until the question is resolved and protect our people.” The protest hasn’t gone entirely smoothly, however. Of the 12 protestors who arrived in the Russian capital in July, only six remain in Moscow. This is largely due to health problems arising from a hunger strike held early on in the protest. “We were on a hunger strike for a month. During that time nine of us ended up in the hospital, some came back, others had to go home,” Rahayev said, adding that they subsequently abandoned this extreme measure due to the cold weather and are now eating one meal per day.   

Rahayev also told a story about one of the many people who took an interest in the protestors since they arrived. “A man came to see us one day and asked us what we were doing here. We explained, and he said we were like the old men in Vladimir Serov’s painting ‘Peasant Petitioners Visiting Lenin,’ but without the beards. He joked about how it may now be the information age, but they probably had easier access to the authorities. Walking away laughing, he said we could grow beards down to the ground before we would get a response. So we decided to be like those peasant petitioners and grow our beards, and they’ve already come on quite a bit.”

Nezavisimaya/Russia Today: The unmotivated terror attacks of the criminal underground http://rt.com/Top_News/Press/eng.html

Terrorists are not setting forth either economic or political demands

Vladimir Mukhin

The upcoming November holidays will be celebrated by the law enforcement agencies of the North Caucasus Federal District by being on a high counterterrorism alert. The alert has come in effect not only in the traditionally turbulent regions – Chechnya, Dagestan and Ingushetia, but also in the recently fairly stable North Ossetia and Kabardino-Balkaria.

The Vladikavkaz police turned to the residents of North Ossetia’s capital to warn them about a possible terrorist attack in the city with the use of trucks. The republic’s Anti-Terrorism Commission has released telephone numbers which people need to call to report “suspicious vehicles, objects, and individuals” to the law enforcement agencies and the Federal Security Service Directorate.

These warning measures are not incidental – as it is known, a terrorist attack was committed on September 9, 2010 near the central market in Vladikavkaz – as a result of which 19 people died and another 209 were injured with varying degrees of severity. In the course of the investigation it was discovered that the local police were at fault for “missing” a suicide bomber. Now, by addressing the public, the Internal Affairs Directorate of the republic seems to be trying to eliminate this gap.

Law enforcement agencies in Kabardino-Balkaria have, too, increased their vigilance. In the republic’s Elbrussky District, the counterterrorism operation regime remains in force, during which clearing operations in the tunnels of an abandoned tungsten-molybdenum plant have been ongoing for already more than 10 days. It is the hiding place of nearly a dozen militants, according to law enforcers, involved in a number of terrorist crimes and killings of staff members of the law enforcement agencies. The localization of this gang, however, did not stop other terrorist groups from killing an Internal Troops officer in Shalushka settlement of the Chegemsky District this past Monday, and shooting point-blank and killing a local police detective in the Islamei settlement of the Baksansky District. Moreover, in Nalchik, the capital of the republic, militants had planted two self-made explosive devices, which, fortunately, were discovered and neutralized in time.

Despite the statements made by the Head of Chechnya, Ramzan Kadyrov, about effective work of the law enforcement agencies, killings of local police members continue in the republic. Yesterday, in the Verkhny Noiber settlement, a member of the Internal Affairs Ministry’s unit for securing the oil and gas complex was found shot in his own home by the militia. On Monday, as a result of a special operation in Grozny, a suicide bomber had detonated an explosive device, injuring nine police officers and one sergeant of the police (eight of them suffered concussions, two – gunshot wounds, all were hospitalized).

Note that the unfolding dispute between field commanders, Doku Umarov and Hussein Gakaev, have no effect on the activity of members of illegal armed groups – just as the conflict between Doku Umarov and one of the separatist leaders, Ahmed Zakaev, who lives in London. Umarov blames Zakaev for accepting $10 million from the George Soros Fund for holding the three-day World Congress of the Chechen People in Poland. Doku Umarov believes that this money “does not, and will not, bring any use to the jihad and Muslims” because the main goal of the Congress was allegedly to split the supporters of the criminal underground. Zakaev denies reports about his receiving funds from George Soros.

Meanwhile, as was stated yesterday by the head of the Caucasus Commission, first deputy speaker of the Federation Council, Aleksandr Torshin, “a crisis in the leadership of the criminal underground led to unmotivated terrorist attacks in the North Caucasus”. “Unmotivated terrorist activity is taking place,” stressed the senator. “Terrorists are blowing themselves up or striking without setting forth any economic or political demands.”

Head of the Internal Affairs Ministry of Chechnya, Ruslan Alkhanov, says that, presently, there is no need in introducing any additional security measures in the republic, despite the fact that the criminals have made some recent appearances – namely, they attacked Tsentoroy, the ancestral village of Ramzan Kadyrov, as well as the Chechen Parliament. “We always hold our forces and resources in the state of full combat readiness. Chechnya is living a normal life. There is no need for introducing additional security measures,” stressed Alkhanov.

“There is control, but at what price?” says military expert and PhD in historic sciences, Vladimir Popov. “Unfortunately, in Chechnya and other republics of the North Caucasus the premises for activity of illegal armed groups continue to exist. According to the FSB, regional terrorists are being supplied from abroad. Moreover, the criminals continually change tactics. Without abandoning the terrorist combat methods, they are shifting to their military and ideological forms.” To the latter, the expert links the murder of an imam, which took place on Monday in Khasavyurt, Dagestan, densely populated with Akintsy Chechens, as well as setting fire to three Orthodox churches in Karachaevo-Cherkessia.

Read the article on the newspaper's web site

Jailed oil executive says all of Russia has a stake in latest trial

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/02/AR2010110206562.html

By Kathy LallyWashington Post Foreign Service Wednesday, November 3, 2010

MOSCOW - Freedom was so near for Mikhail Khodorkovsky, the once fabulously wealthy oil executive who was sent off to Siberia five years ago for tax evasion, although his real offense, his supporters say, was politically opposing Vladimir Putin.

His sentence was supposed to end next fall, just months before the 2012 presidential election. Putin, now prime minister, might run again for president. So Khodorkovsky and his business partner are expecting more time, now on embezzlement charges brought last year.

The verdict is expected Dec. 15. In a concluding statement to the court Tuesday, Khodorkovsky said he foresaw the worst - for himself and his country. This time, he said, the future of all of Russia is at stake.

"There is much more than just the fates of two people in your hands," Khodorkovsky said. "Right here and right now, the fate of every citizen of our country is being decided."

All over Russia, he said, people are setting up businesses, building houses, creating a life to pass on to their children, hoping that they will not lose it all to official lawlessness and "raiders in uniform."

The enormously successful Yukos Oil Co., built by Khodorkovsky and his partner, Platon Lebedev, was declared bankrupt after their arrest and broken up, and much of it was acquired by the state-owned Rosneft. And now all of Russia is watching, Khodorkovsky said, and wondering whether anything has changed.

"They are watching with the hope that Russia will, after all, become a country of freedom and of the law ... where supporting opposition parties will cease being a cause for reprisals ... where human rights will no longer depend on the mood of the czar."

As he was speaking, about 20 to 30 men clad in black, wearing ski masks and brandishing submachine guns, were raiding a Moscow bank owned by Alexander Lebedev, a Russian billionaire who owns the Independent and Evening Standard newspapers in London as well as 39 percent of Novaya Gazeta, virtually the only opposition newspaper in Moscow.

Police spokesmen said the raiders were law enforcement officers but provided no information about their agency or mission at Lebedev's National Reserve Bank.

Sergei Sokolov, deputy editor of Novaya Gazeta, said he was puzzled about the show of force. "They took just a few documents that the bank would have provided if asked," he said. "It showed somebody was dissatisfied with something."

Sources told the newspaper's reporters, he said, that the raid was carried out by the FSB, the KGB successor, Sokolov said. "It doesn't matter who was behind it," he said. "It looked really alarming and was a demonstration of power. I can say it is not possible to have an honest business here. We cannot talk about modernization and investment of any capital if any captain of any law enforcement agency can easily bring these kind of forces against a business."

Modernization and economic investment from abroad are among the favorite themes of President Dmitry Medvedev, who has been entertaining delegations of powerful Americans recently, urging them to put their money to work here.

Those themes resonated in the courtroom Tuesday.

"With the coming of a new president [in 2008], hope appeared once again for many of my fellow citizens, too," Khodorkovsky said. "Hope that Russia would yet become a modern country with a developed civil society. It is clear that this cannot happen all by itself or in one day. But to pretend that we are developing, while in actuality we are merely standing in one place or sliding backwards ... is no longer possible."

11:40Lebedev's bank searched over Rossiisky Kapital operations – sourcehttp://www.interfax.com/news.asp

Moscow police criticised for 'circus' raid on Lebedev's bankhttp://www.independent.co.uk/news/world/europe/moscow-police-criticised-for-circus-raid-on-lebedevs-bank-2123558.html

By Cahal Milmo

Wednesday, 3 November 2010

Masked police officers yesterday raided a Russian bank controlled by Alexander Lebedev, the owner of The Independent, in a move described by an aide to the billionaire as a "circus".

Mr Lebedev was inside the headquarters of the National Reserve Bank when about 30 officers, many of them carrying semi-automatic weapons, entered its offices in central Moscow shortly after midday local time, jumping turnstiles before commencing a search through company documents.

A spokesman for the Moscow city police said the search, which was conducted by a group of about 10 suited investigators accompanying the balaclava-clad marksmen, was part of an "ongoing criminal investigation". Investigators later said they were looking for papers related to Rossiyskiy Kapital, a lender bailed out by the bank in 2008.

High-profile raids involving the seizure of computers and documents are a common tactic among Russia's law enforcement agencies. The practice is widely seen as a tool to intimidate targets, often on behalf of rival businesses or as a precursor to attempts to secure the outright seizure of a company.

Sources close to Mr Lebedev said the raid could be linked to calls from the billionaire for Yuri Luzhkov, the former mayor of Moscow who was sacked in September, to face corruption charges. Mr Luzhkov remains an influential figure but is increasingly dogged by graft claims. He denies any wrongdoing.

Mr Lebedev, 50, is also the financial backer of Novaya Gazeta, the Moscow-based opposition newspaper where four journalists have been murdered since 2001. The title has regularly ruffled feathers in the Kremlin with its investigations into corruption and scrutiny of the activities of state agencies. The paper reported that three of the investigators involved in yesterday's raid demanded a meeting with Mr Lebedev shortly after entering the building. The siege, which saw armed officers stationed at the doors of the bank, was lifted after two hours without arrests.

Artyom Artyomov, Mr Lebedev's spokesman, said no claims had been made against Mr Lebedev or the bank and criticised the ostentatious nature of the "masky-show" – a term coined in the 1990s for raids on Russian businesses by police. He said: "We don't see any reason to organise this circus. Why do they come in here with their guns and masks? If they need a file they can come with a piece of paper and just ask."

Dmitry Muratov, editor-in-chief of Novaya Gazeta, told Bloomberg: "There's no way to look at this other than as an attempt to intimidate Lebedev. He promotes civil society and a free press. This doesn't please the security men in power."

The raid came as the jailed former oil tycoon Mikhail Khodorkovsky told a judge considering new charges against him and a business partner that the fate of all Russians rested on the outcome of his trial for embezzlement, expected next month.

Mr Khodorkovsky, 47, whose supporters say he is being kept behind bars as long as possible after he funded opposition parties, said his case was a litmus test for the rule of "law and freedom" in Russia. If convicted, he faces a further seven years' imprisonment.

Masked police raid on media billionaire Alexander Lebedev's Moscow bankhttp://www.dailymail.co.uk/news/article-1325825/Masked-police-raid-Alexander-Lebedevs-Moscow-bank.html?ito=feeds-newsxml

By Will StewartLast updated at 7:32 AM on 3rd November 2010

A bank controlled by the owner of three British newspapers was raided by armed Russian masked police yesterday in a show of strength against one of Vladimir Putin’s most visible critics.

Alexander Lebedev, a Russian businessman who owns the London Evening Standard, Independent and Independent on Sunday, was inside the 11-storey building in Moscow when 50 officers swarmed in.

The billionaire was not arrested or questioned. However, agents from Russia’s FSB secret service and the interior ministry took away documents relating to a takeover of a financial institution by his National Reserve Bank.

Such raids – which are known as a ‘mask show’ – are commonly used by the authorities to fire a warning shot to critics of the Russian leadership, say liberals.

Mr Lebedev – a former KGB agent – is known for his outspoken criticism of the Kremlin and especially of Mr Putin, the prime minister, who is also a former KGB spy.

Two years ago, one of Mr Lebedev’s Moscow newspapers closed after it published a story claiming Mr Putin’s marriage was on the rocks and that he was involved in a romance with Olympic gymnast Alina Kabayeva, at 27 three decades his junior.

The story was denied, although rumours have persisted since then. Mr Lebedev denied any advance knowledge of the story and also subsequently denied it was correct.

However, he has spoken recently about how the original story surfaced in his newspaper.

Mr Lebedev is a key financial backer – alongside former Soviet leader Mikhail Gorbachev – of another investigative newspaper which is regularly critical of the Kremlin.

The businessman also has a long-running feud with ousted Moscow mayor Yuri Luzhkov and there was speculation last night that the raid could have been triggered by officers loyal to a man sacked last month by the Kremlin.

Mr Lebedev recently called for Britain to investigate Mr Luzhkov, who may seek asylum in London, for alleged corruption.

Mr Lebedev’s spokesman, Artyom Artyomov, said of yesterday’s raid: ‘I don’t see politics in this. It’s simply Russian idiocy.’

Police said the raid concerned an on-going criminal case.

They declined to give details but it is believed to be linked to the takeover of a bankrupt bank and the use of a large state loan paid to Mr Lebedev’s bank.

Mr Artyomov said law enforcement officers could have obtained any documents they needed without resorting to the extraordinary show of force.

Leading Kremlin foe Mikhail Khodorkovsky, once Russia’s wealthiest man, told a Moscow court yesterday he would die in jail if necessary, claiming that a likely new prison term amounted to a blatant political punishment.

The former chief of the Yukos Oil company, who has already been behind bars since 2003 on fraud charges, is now on trial accused of stealing £18billion worth of oil from his firm.

Russia and the future of the CTBThttp://en.rian.ru/valdai_op/20101103/161192733.html

10:06 03/11/2010

Alexei Fenenko

Fifteen years have passed since Russia and the United States approved the Comprehensive Test Ban Treaty (CTBT), but experts have shown little interest in the anniversary. Banning nuclear explosions is seen by analysts as a set of technical issues, beyond the reach of politics. But the CTBT is a political issue.

The Russian Federation is the only nuclear power that is fully engaged in test ban regime. Britain and France have ratified the CTBT but have not declared a moratorium on nuclear testing. By contrast, the United States and China have declared moratoria on nuclear testing but have not ratified the treaty. India, Pakistan, Israel, and North Korea – who are operating outside the international non-proliferation regime – have neither declared moratoria on nuclear testing nor signed the CTBT.

Fifteen years after it was adopted, the treaty’s future remains uncertain, as does Russia’s participation in the test ban regime. Russia’s successful test of the Bulava sea-based ballistic missile on October 29 made it clear that Moscow intends to continue modernizing its strategic nuclear forces.

Why ban nuclear testing?

The history of the nuclear test ban stretches back to the mid-1950s, when the idea was proposed by India and the USSR. Later, the Soviet Union, Britain and the United States signed the Partial Test Ban Treaty (1963), Threshold Test Ban Treaty (1974), and Peaceful Nuclear Explosion Treaty (1976). From 1977 to 1980, these three powers held

trilateral talks on a comprehensive test ban. However, these talks did not yield an agreement. Soviet experts had concerns about U.S. supremacy in the electronic simulation of nuclear explosions and the behavior of fissile material in nuclear warheads, while American analysts worried about the Soviet supremacy in conventional armed forces.

But as testing technology changed in the 1980s, so too did the political landscape. This decade saw rapid development in the field of electronic simulation of nuclear explosions, progress on hydronuclear and subcritical tests, and improvements in “zero-yield” experiment technology. Experts spoke about the possibility of developing nuclear weapons without nuclear testing. But skeptics argued that electronic testing dealt only with caliber and weight, not the technical design of nuclear warhead.

The logic of the non-proliferation regime also paved the way for a test ban treaty. The Nuclear Non-Proliferation Treaty (NPT) made it compulsory for legal nuclear powers “to focus on limiting the arms race and complete nuclear disarmament.” But the NPT (1968) was restricted to only 30 years. Non-nuclear states agreed to extend the treaty only if the “nuclear five” fulfilled their disarmament obligations.

International groups of scientists have been advocating for a nuclear test ban since the early 1980s. In 1985, the idea was supported by Soviet Deputy Foreign Minister Grigory Kornienko and General Secretary Assistant on Foreign Affairs Anatoly Chernyaev. In the U.S., Secretary of Defense Caspar Weinberger and his assistant Richard Perle opposed it. But President Ronald Reagan and Secretary of State George Shultz supported the idea of cutting nuclear arsenals, because the small strategic nuclear forces theoretically could be more vulnerable for a space-based missile defense system (the Strategic Defense Initiative). In the summer of 1986, the USSR and the United States began the Geneva talks on nuclear testing.

The Geneva talks were quite complicated. Joint Soviet-U.S. experiments at Nevada nuclear test sites and Semipalatinsk (1988-89) proved that it was possible to monitor nuclear tests. Both the USSR and the United States declared a moratorium on nuclear tests several times, only to renege. Only in 1990 did the United States ratify the Threshold Test Ban Treaty and Peaceful Nuclear Explosion Treaty.

In 1980s, Soviet and American experts talked about the declining psychological impact of nuclear deterrence and the possibility of replacing nuclear weapons with something that can actually be used. The idea was that by banning nuclear tests, nuclear powers would lose their technological base to build nuclear weapons. But were nuclear powers motivated by humanistic considerations or a desire to revive the possibility of wars using conventional weapons (just as the ban on the use of chemical weapons in 1925 led to the rise of tank warfare in the Second World War)?

Basic compromise

The end of the Cold War standoff accelerated the search for compromise. In Vancouver

(April 1993), presidents Boris Yeltsin and Bill Clinton agreed to start negotiations on signing the CTBT in a multilateral format. The negotiation of this treaty was to be a package with the Fissile Material Cut-Off Treaty (FMCT). In January 1994, negotiations on both documents began in Geneva. The Russian-U.S. compromise was not easy. The Clinton administration insisted on banning subcritical and hydronuclear tests, which rankled the Russian Ministry of Defense and Ministry of Atomic Energy. It was only at the New York summit (October 23, 1995) that Bill Clinton and Boris Yeltsin finally agreed that the core of the treaty would be the “zero yield concept.” The text of the treaty was ready to be signed in Geneva on September 24, 1996.

Russia and the United States without nuclear testing

However, Russia ratified the CTBT under certain conditions. These were: (1) the possibility of implementing a federal program to support nuclear weapons without nuclear testing; (2) the option of withdrawal in the event of a threat to national interests; (3) the separation of national and international mechanisms for IAEA monitoring over fissile materials; and (4) the non-deployment of nuclear weapons on the territory of new NATO members. The latter condition was recorded in the Russian-NATO Founding Act (1997).

These conditions soured Republicans in the U.S. Congress on the CTBT. They viewed the New York agreement as an unjustified concession to Russia. (If nuclear testing had been completely banned, Washington would have had an advantage given its superiority in electronic nuclear testing). Russian conditions for ratifying the CTBT were considered excessive by Republicans, who portrayed the New York agreement in the media as Clinton’s “nuclear Munich.” In October 1999, the Republican Congress predictably voted against ratification.

Resource or weakness?

Russia’s participation in the CTBT was largely criticized by military experts. However, ratification of the CTBT benefitted the Russian Federation in many ways. For example, many non-nuclear states supported Moscow’s position. It gave Russia leverage to persuade the United States to continue negotiations on START and ABM. When the United States criticized Russia for its diplomatic position on the nuclear programs of Iran, India and North Korea, Russia responded that Americans had not yet ratified one of the pillars of the non-proliferation regime. This approach has paid dividends. Public opinion surveys around have revealed that Washington, not Moscow, started a new arms race.

The situation changed after President Barack Obama called for the ratification of the CTBT in April 2009. The CTBT establishes an International Monitoring System for nuclear tests (IMS), which includes seismic stations, as well as radionuclide, infrasound and hydroacoustic monitoring. These stations are located in the states subject to the CTBT. But all the data is to be sent to the Provisional Technical Secretariat in Vienna, which is subordinate to the CTBT Organization. In this respect, the United States is in a

better position than Russia for several reasons.

First, Washington has a network of these stations on the territory of its military allies: NATO, Japan and Middle Eastern countries. The Americans can use these stations to monitor Russian sites. Russia, by contrast, does not have similar stations near the U.S. border.

Second, the United States is currently working toward a global missile defense system. IMS stations, which are being built now, seem to be unfit for observing the launches of ballistic missiles. But in 1996, the CTBT participants discussed the draft of a satellite monitoring system for underground nuclear explosions. Space surveillance systems are easier to use than “dual use” technologies: they could be observing not only the nuclear tests, but the nuclear sites, too.

Third, Americans will be able to use the issue of subcritical and hydronuclear tests against Russia. In 2003, American experts claimed that under the cover of Russia’s federal program to support nuclear weapons with testing, Moscow was pursuing a program of subcritical nuclear tests. If the United States decides to ratify the CTBT, similar charges (whether justified or not) could become official.

Fourth, the United States is conducting experiments to develop “small nuclear weapons.” Future administrations (for example, if a Republican takes back the White House in 2012) could increase funding for these projects. Over the past 15 years, significant progress has been made in subcritical and hydronuclear testing. The question, then, is whether the Russian segment of the IMS will be able to give absolutely accurate information about the American experiments. Post-November prospects

If the Republicans win control of the House of Representatives on November 2, they may solve these problems, as they are likely to postpone ratification of the CTBT once again. But Russia cannot remain the only nuclear power to have both ratified the CTBT and imposed a moratorium on nuclear testing. The United States and China have great latitude with respect to nuclear experiments. Like Britain and France, they have not imposed a moratorium on nuclear tests and, theoretically, are free to carry out a program of subcritical and hydronuclear testing. In fact, Britain could do this under a joint program with Washington.

There is another problem. In 2008, the Provisional Technical Secretariat in Vienna decided to start using the IMS facilities. It is expected that they will be fully operational after 2015. But unless the CTBT is ratified, the purpose of this system is unclear. Russia will have to amend the agreement with the Preparatory Commission (1997) and the Technical Secretariat of the CTBT (2000).

In the mid-2000s, Russian experts proposed some scenarios for a possible collapse of the CTBT:

(1) large-scale modernization of the U.S., Russian, and Chinese nuclear arsenals; (2) China, France and, possibly, Britain may have concerns about their inability to maintain their nuclear arsenals at the level necessary to preserve the nuclear status quo;(3) Russia’s withdrawal from the CTBT in order to support programs to modernize Russia’s strategic nuclear forces;(4) one of the threshold states or non-legal nuclear states (India, Pakistan, North Korea) conducts nuclear tests.

A Republican victory, of course, would not spell immediate collapse. But if the treaty has not been in force for fifteen years, it is difficult for Russia to be the only nuclear power which complies with its terms and conditions in full. Russia’s official position is to support the CTBT’s entry into force. However, Russian experts tend to focus on the pessimistic scenarios of CTBT collapse. In the near future, Russia could face a difficult choice between the political dividends the CTBT affords and the military necessity to upgrade its nuclear capabilities.

Alexei Fenenko is Leading Research Fellow, Institute of International Security Studies of RAS, Russian Academy of Sciences

Prospects of Russian-Georgian relations: hypothetical scenarios http://eng.expertclub.ge/portal/cnid__6616/alias__Expertclub/lang__en/tabid__2546/default.aspx

02/11/2010 15:06 Simon Kiladze

Disagreement is evident in the ruling tandem of Russia. The closer the presidential election of 2012, the more distinct becomes political transformation of the President. His "I" became more pronounced in his actions. Dmitry Medvedev, once docile to Vladimir Vladimirovich Putin is gradually showing his, until recently hidden, temper and seems to be coming out from under the influence the boss. Though it is still a long way to 2012, but it is obvious that the formula "president-prime minister-president", devised by Putin during the elections in March 2008, is already crumbling.

"Rivalry between inhabitants of the Kremlin and the White House (the building of the Russian government) has been going on for a long time. Some say that differences that started between Medvedev and Putin back in 2009 and that became evident during the solution of certain personnel matters, has even further deepened in 2010. An issue of Khimki forest that is located near Moscow (Putin supported cutting down of the forest because of construction of a highway, while Dmitry Medvedev stopped it) and Yuri Luzhkov's removal from the post of the Mayor of Moscow confirmed existence of disagreement.

Medvedev-Putin: liberal vs. conservative?

As Russian and Western political analysts note Dmitry Medvedev can be conventionally regarded as the leader of the liberal wing of the ruling elite in modern Russia, while Putin is the most influential figure in extreme conservatives.

Vladimir Putin, as it is inherent in a man whose worldview was formed during work in the Soviet era security services (KGB), is a person of "hard, ruthless and stern" nature. And we can say that formation of a relatively liberal outlook of Dmitry Medvedev and his perception of events was due to his involvement in the civil service to a significant degree.

Of course, such "classification" of the leaders of Russia may be debatable, but, as we said above, it is obvious that American or European vectors of the foreign policy of Prime Minister and the President are still quite different. It would suffice just to recall Vladimir Putin's speech that he made at the Munich security conference that almost shocked Europeans, or how the Russian-US relations deteriorated during his presidency (despite the fact that George W. Bush "looked into Putin's eyes and saw his soul "), while Medvedev and Obama began a well-known process of "reset" and in Europe and America began to talk about friendly and business partnership with Russia.

At the same time it is also obvious that the west still looks at the Russian bear with a certain degree of timidity and fear. The world is well aware of different tones of Russia's imperial policy, when estrangement is followed by rapprochement and periods of warming are replaced by periods of freeze with its heavy results for almost the entire world. Such recurrences are many ranging from the XIX century to the present day and it remained unchanged during the monarchy, the communist period and at the time of "liberal-democratic Russia" of 1990s.

In its turn, attitude of the west towards Russia, too, is not completely homogenous. It has different approaches. Leading states of continental Europe are more loyal to the Kremlin than the United Kingdom and the United States of America. Out of the factors determining this situation two are most important. Firstly it is that Russia has historical political-economic and cultural ties with "old" states of continental Europe that is often expressed in a strategic partnership. And secondly, Germany, France and other developed countries of Europe are still basically "dependent" on Russian oil and gas and Russia's economy is largely integrated with theirs.

This difference in approach to Russia to some extent weakens efforts of the Western "democratic front" directed at democratization of Moscow, and if we add to this loyalty of the well-known policy of "reset", it becomes clear why strictness of Berlin-Paris and Brussels-Strasbourg is quite often only illusory and it is mainly expressed in "concern and indignation". And Russia uses it and directs its anger against unruly and stubborn countries of "the near abroad".

In the period of Russian anti-Georgian hysteria it can be noticed that the policy of Vladimir Putin and Dmitry Medvedev towards Georgia is more or less distinct in tone and style in some respects. Dmitry Medvedev relatively rarely makes offensive statements against Georgia. Today his political vocabulary is more civilized than in the early period of his presidency, while permanent politically incorrect remarks of Putin are well known.

Sceptics may argue that in the context of Russian imperial occupation policy it is of no great importance whether Russia's leaders refer to Georgia with a soft tone or strict one. The bottom line is that the anti-Georgian vector of the Kremlin has remained unchanged.

And still, how far can attitude of the northern neighbour change towards Georgia, given ongoing domestic political processes in Russia? To be more precise, how will relations between Russia and Georgia develop if "liberal" Dmitry Medvedev continues to restrain "conservative and rigid" Vladimir Putin and after that manages to remove him from politics?

Although today it is difficult to predict as no one knows what will happen and what Putin will do against Medvedev or vice versa. But, let's give our imagination free reign and imagine a kind of simplified hypothetical scenario with optimistic and pessimistic aspects.

Optimistic scenario:Compromises of Russia with Georgia

Let's imagine that Dmitry Medvedev have overcome Vladimir Putin's resistance and forced him to gradually retreat into the background; entourage of the Prime Minister is more or less neutralized; central and regional ruling elite is staffed with staunch supporters of the President; the campaign in support of the President intensifies in the media; law enforcement bodies and Putin's kindred security services are now subordinated to the president not just formally but actually as well. The moment of truth comes – by the decision of Medvedev Vladimir Putin is dismissed. The President has full freedom of action.

The period of real political growth and gain of Medvedev coincides with the pre-election period in the country. Democratic processes are becoming decidedly more active in Russia. Reforms are deepening. The West supports the political course of Medvedev while requests the Kremlin to solve problems of international and regional security, including those regarding Georgia.

Probably, a question related to Georgia will be one of the most important in the new Kremlin policy, although very difficult one to address. There is no solid foundation and a clear background for Medvedev to concede anything with regards to Georgia, but there is a possibility for the political situation to change. Slight, but definite signs of this can be seen on the horizon.

It is true that under the constitution of Russia the attack on Georgia and deployment of military occupation troops of Russia on its territory happened exactly by the orders of the President - Dmitry Medvedev personally. But at the same time, during public performances he consistently stressed that "it was a forced decision". The same thing he says about the recognition of so-called independence of Abkhazia and "South Ossetia". Who compelled Dmitry Medvedev to go against his will? We should recall that by August 2008 presidential experience of Medvedev was only some three months and he depended on Vladimir Putin, who at the time, we may say, was the de facto ruler of Russia.

With what will Dmitry Medvedev start?

We should keep in mind that it's difficult for the president to take back what has been publicly said once, all the more for the leader of such an ambitious country as Russia. This requires some time and appropriate timing.

Since the primary and main goals for Georgia are: a) withdrawal of Russian troops from the occupied territories; b) establishing control of the Georgian-Russian state border; d) restoration of territorial integrity we should assume that Medvedev will try to take certain steps in these very directions.

The process of rapprochement between Georgia and Russia is possible in two stages. At the first stage, I think, a significant role with this regard can be played by a factor of future membership of Russia in the World Trade Organization (WTO). it is possible that at the first stage of de-occupation and under certain pressure from the U.S. (or on the basis of political deal) the Kremlin would agree to demands of Tbilisi and for a start symbolically allow Georgian customs officers at the checkpoint of Rocky-Nizhny Zaramag (if not Georgians, at least representatives of international organizations acting on behalf of Georgia. Similar facts have happened before in the conflict regions of the world). It might seem fantastic now, but we should not forget that principle agreement on joint checkpoints on the border between Georgia and Russia was reached back in February 2008. In addition, Washington is making such strong and reassuring statements about Russia becoming a WTO member in just one year that suggestion about existence of a deal involuntarily comes to mind.

The second stage will probably begin in 2012 if Dmitry Medvedev once again is elected a president. Russia is actively pursuing integration with the west, at the same time it reduces its contingent of occupation troops in the breakaway regions of Georgia, convinces Sukhumi and Tskhinvali of necessity to pursue such policy. While Tbilisi, in turn, through mediation of international organizations and taking into account new political realities, begins to work on the format of territorial arrangement of Georgia, strengthening of mechanisms of security and mutual trust. The west and Russia jointly give Georgia financial aid, much of which goes to Abkhazia and "South Ossetia" under international control.

Eastern European states that were quite hostile towards Moscow support efforts of Medvedev; problems that used to arise between them in previous years are reduced dramatically; hard pro-Serbian course of Russian diplomacy In the Balkans is neutralized as Serbia itself is already integrated in the EU. Against this background when Belgrade and Moscow are actually "are already on the NATO orbit" pursuance of old policy loses its meaning, respectively, Russia recognizes independence of Kosovo. Thus, it practically agrees with the political course of the west.

Recognition of Kosovo which means rejection of old politics naturally leads to possibility to revise and adjust relations with Abkhazia and "South Ossetia", but what about "prodigal sons" of Georgia independence of which Russia has already been recognized?

This is a very problematic issue.

Of course, independence of Abkhazia and "South Ossetia" was artificial and granted by the Kremlin. And the recognition of their sovereignty has been largely caused only to annoy the west (because of Kosovo). Of course, both regions of Georgia are occupied by Russia. it is also clear that the Sukhumi and Tskhinvali authorities are separatist, though there are also differences between them. "South Ossetia" which in reality is part of the Shida Kartli region, is in a completely different situation than Abkhazia. "South Ossetia" is absolutely groundless and artificial entity without a future that cannot exist independently.

Dmitry Medvedev knows well possibilities of Abkhazia and "South Ossetia". He had been in both Sukhumi and Tskhinvali. He knows that Tskhinvali is a kind of "black hole" where billions of Russian rubles intended for the public disappear without a trace (or rather accumulate in the pockets of the Eduard Kokoity regime). "South Ossetia" for Russia is a "stone of Sisyphus" which it slung on its back and Russia drags it i.e. it is altogether unprofitable and disadvantageous - both economically and politically.

Thus, according to the optimistic scenario, we can assume that Russia, first of all, will free itself of the heavy ballast. After years liberal democrat President admits a mistake, overcomes false pride, checks his ambitions and cancels his decree recognizing the independence of "South Ossetia". We have already mentioned above that recognition of one's mistakes is quite a difficult task for a president. But quite often happens that the recognition of a wrong step becomes the foundation for future success. As to withdrawal of recognition of independence, its abolition, such precedents though rarely, but still have been in international diplomacy. This happened in twenties, thirties and forties of the last century. The same is happening today with regard to some African or Asian separatist regimes.

(To be continued ...)

National Economic Trends

Russia’s Services Grow at Fastest Pace Since June, PMI Data Showhttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=adYgVX_hsV38

By Henry Meyer

Nov. 3 (Bloomberg) -- Russia’s service industries grew at the fastest pace since June last month, the second consecutive monthly increase after a contraction caused by a heatwave, HSBC Holdings Plc said.

The seasonally adjusted Business Activity Index rose to 55.6 in October from 51.5 in September, HSBC said in a report today, citing data compiled by Markit Economics. The survey- based index indicates a contraction when it is below 50 and growth with a figure above 50.

Russia’s economic recovery from last year’s 7.9 percent contraction, the biggest on record, remains moderate, the bank said.

The economy completely awakened in October from the “summer nap,” said Alexander Morozov, HSBC’s chief economist in Moscow, in the statement. “Yet we still talk about the return of the economy to moderate growth rates, which are lower than the multi-year average.”

Gross domestic product may expand by as little as 3.6 percent in 2010, Deputy Economy Minister Andrei Klepach said on Sept. 24. The government left its official GDP forecast for this year unchanged at 4 percent.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

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

Last Updated: November 3, 2010 01:58 EDT

World Bank Reduces GDP Forecasts http://www.themoscowtimes.com/business/article/world-bank-reduces-gdp-forecasts/421737.html

03 November 2010Reuters

The World Bank cut its forecast for Russia's economic growth and warned on Tuesday of risks from inflation, pre-election spending pressures and the high level of oil prices factored into the budget.

With ample banking sector liquidity and higher than previously expected inflation, the Central Bank may also need to react with tighter monetary policy before the end of the year, said Zeljko Bogetic, the World Bank's lead economist for Russia.

Russia's gross domestic product will grow 4.2 percent this year, 4.5 percent in 2011 and 3.5 percent in 2012, the World Bank said in its latest Russian Economic Report.

In June, it had forecast expansion of 4.5, 4.8 and 4.7 percent, respectively.

"The pace of economic growth in 2011 and 2012 will be constrained and will depend on sustained gains in consumption and the pace of recovery in longer term credit to the private sector, needed to facilitate growth in fixed investment," the report said.

The World Bank raised its 2010 inflation forecast to 8 to 9 percent from 7 to 8 percent, taking a more pessimistic stance than the government and factoring in a surge in food prices seen after a severe drought killed a third of the harvest.

"The inflation scare was a one-time shock but there is a lot of liquidity in the economy, and the banks are just beginning to lend so it is not conceivable … that inflation pressures could build up and … maybe it would be even prudent to rein in some of that liquidity," Bogetic said.

"If not by raising interest rates — because the interest rate channel is not very strong in this country — maybe with alternatives, such as reserve requirements. … Possibly by the end of the year they [the Central Bank] may … have to react." Russia's Central Bank left interest rates on hold in October and signaled that policy would likely remain unchanged for a few more months. Most analysts do not expect it to start raising interest rates until early 2011.

The World Bank also gave a thumbs up to the Central Bank's moves toward greater exchange rate flexibility.

A key threat to the economy is the high level of oil prices currently factored into the budget — $75 a barrel for 2010-11.

"With a high budgeted price of oil close to the current forecast, Russia's budget has lost the cushion it had in previous years, becoming more vulnerable than in the past to sudden drops in the price of oil," the World Bank said.

On the revenue side, "expenditure pressures may increase in the election cycle 2011-12," adding risk to the budget.

"Fiscal risks have increased, suggesting the need to rethink the fiscal strategy in the face of heightened uncertainty and downside risks in the oil market," the report said.

A $20 fall in the oil price next year would increase the budget deficit by 2 percentage points of GDP, it calculated. That would take the budget gap to about 5.5 percent of GDP.

"At that level of deficit, I think the financing strategy would have to be rethought," Bogetic said, adding that financing the extra gap with domestic borrowing could create inflation risks and may also lead to a crowding out of corporate players.

"It might be prudent to activate the external financing sources much more," he said.

If the risks to oil prices and spending materialize, Russia would do well to revise the 2011 budget with more conservative forecasts for oil, Bogetic said.

Financial regulator's assets inch up in September

http://www.rbcnews.com/free/20101103114934.shtml

      RBC, 03.11.2010, Moscow 11:49:34.The assets of the Bank of Russia inched up 0.2 percent and amounted to RUB 15.889 trillion (approx. USD 516.04bn) as of October 1, 2010, the Central Bank indicated in its balance sheet today. Since the beginning of the year, when the regulator's assets stood at RUB 15.419 trillion (approx. USD 500.78bn), they rose 3 percent.

      Meanwhile, the bank's precious metals account stood at RUB 1.045 trillion (approx. USD 33.93bn), up 7.8 percent in September of this year. Funds placed with non-residents and securities issued by non-residents reached roughly RUB 13.670 trillion (approx. USD 443bn), showing a 1.5-percent increase. Conversely, the amount of loans and deposits stood at RUB 585.7bn (approx. USD 19.02bn), having shrunk 2.6 percent in September.

      The bank's capital remained virtually unchanged at RUB 2.161 trillion (approx. USD 70.18bn) as of October 1, 2010 compared to the figure for September 1.

Business, Energy or Environmental regulations or discussions

Russian stock market daily morning report (November 03, 2010, Wednesday)http://www.stockmarketsreview.com/reports/russian_stock_market_daily_morning_report_20101103_54723/

By Veles Capital

Upping continued at the Russian share market on Tuesday, but as we expected the rate slowed down. The current high oil prices and upping at the foreign markets became the supporting factors. The resistance factor was provided by the coming holidays in Russia, during which the important events are to occur, the key one would be announcement of U.S. monetary policy features, the volume of assets to be directed to buyback of the Treasury bonds would be the key one. While waiting for such important stats some investors prefer staying in cash for the week-end and that leads to slight sale at the market.

 Main eventsOGK-5 presented strong results for 9 months of 2010 by IAS.

We assume once again OGK-5 presented strong results showing that it is one of the most efficient companies in the industry. We suppose the company will continue upping its profitability, especially in terms of the power energy market liberalization, which is to be completed by early 2011. News brieflyEnergy: FNC report for 9 months of 2010 by RAS.

AvtoVAZ, CTC Media, Gazprom Neft and Rosneft: Russian Preview http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=amY9l1p4pVuU

By Jason Corcoran

Nov. 3 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index added 0.2 percent to 1,537.27 at the close in Moscow. The dollar-denominated RTS Index increased 0.3 percent to 1,604.39.

OAO AvtoVAZ: (AVAZ RX) The Renault-Nissan alliance aims to take control of the Russian automaker after Prime Minister Vladimir Putin gave the deal his blessing, Chief Executive Officer Carlos Ghosn said yesterday to reporters in Moscow. AvtoVAZ, Russia’s biggest automaker, added 0.1 percent to 35.38 rubles on the Micex Stock Exchange.

CTC Media Inc.: (CTCM US) The Russian television network is due to report third-quarter earnings based on U.S. GAAP accounting standards. The stock last traded 0.9 percent higher at $24.70 on the NASDAQ.

OAO Gazprom Neft: (SIBN RX): The Russian natural gas monopoly’s oil arm is scheduled to report third-quarter earnings based on U.S. GAAP accounting standards. The stock increased 1 percent to 121.9 rubles on the Micex Stock Exchange.

OAO Rosneft (ROSN RX): Crude surged to its highest level in three weeks, adding 1.2 percent to $83.92 a barrel in New York as the dollar weakened against major currencies on speculation the Federal Reserve will inject funds into the U.S. economy. Rosneft, Russia’s largest oil producer, fell 0.1 percent to 217.68 rubles on the Micex Stock Exchange.

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

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

Last Updated: November 2, 2010 22:00 EDT

Mostotrest Raises $388 Million in Initial Public Offering http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aZhqHx_6TROo

By Brad Cook

Nov. 3 (Bloomberg) -- OAO Mostotrest raised $388 million in an initial public offering, the Russian construction company said in a statement today.

Mostotrest sold 62 million shares at $6.25 apiece, valuing the company at $1.6 billion. Deutsche Bank AG, JPMorgan Chase & Co. and Troika Dialog managed the sale.

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

Last Updated: November 3, 2010 01:34 EDT

Aeroflot Grounds Airplanes for Lack of Pilots, Vedomosti Reports http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aZNV_tY68nNg

By Henry Meyer

Nov. 3 (Bloomberg) -- OAO Aeroflot, Russia’s largest airline, is grouding airplanes because of a lack of pilots, Vedomosti reported, citing Chief Executive Officer Vitaly Savelyev.

The state-run carrier has already grounded eight airplanes and may have to take another four of five out of service by the end of the year, the Moscow-based newspaper reported today.

Aeroflot has to remove pilots from rotation once they’ve flown 800 hours within a 12 month period, Vedomosti said.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

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

Last Updated: November 3, 2010 01:58 EDT

Russian Billionaire Lebedev Cuts Aeroflot Holding to 13.7% http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aBeScg7vYzB8

By Henry Meyer

Nov. 3 (Bloomberg) -- Russian billionaire Alexander Lebedev’s National Reserve Bank cut its holding in state carrier 0AO Aeroflot to 13.7 percent from 16.6 percent, the company said in a regulatory filing.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

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

Last Updated: November 3, 2010 02:05 EDT

UC Rusal not interested in selling Norilsk Nickel's shares

http://www.rbcnews.com/free/20101103105540.shtml

      RBC, 03.11.2010, Moscow 10:55:40.Viktor Vekselberg, UC Rusal's chairman of the board of directors, has responded to Vladimir Potanin's offer to sell the company's stake in Norilsk Nickel for $9bn by indicating in a letter that the proposed deal violated the rights of the latter company's minority shareholders. Vekselberg went on to assert that UC Rusal was not interested in selling its stake in the mining and metallurgical company. At the same time, according to the RBC Daily newspaper, Interros and Norilsk Nickel viewed Vekselberg's statement as a signal to launch negotiations.

      As reported earlier, Russian tycoon and owner of Interros Vladimir Potanin submitted a letter to Vekselberg just over a week ago, proposing to launch talks on the sale of UC Rusal's stake in Norilsk Nickel.

      Vekselberg said, "Your announcement stating that Norilsk Nickel's current market capitalization is a fair evaluation of the company in existing market conditions only

justifies Rusal's concern over the fact that Norilsk Nickel's potential as the leader in its industry has not been fully used for the best interests of all shareholders."

Usmanov, Metalloinvest Partners Said to Study $4 Billion IPO http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ayHVkmq_ztGk

By Ilya Khrennikov

Nov. 3 (Bloomberg) -- Billionaire Alisher Usmanov and his partners in OAO Metalloinvest, Russia’s largest iron ore producer, are considering seeking as much as $4 billion in an initial public offering in London as early as the first half of next year, two people familiar with the matter said.

The partners haven’t made a final decision on the potential $3 billion to $4 billion offering, the people said, declining to be identified because discussions are private. Yulia Mazanova, a spokeswoman for the producer in Moscow, declined to comment.

Metalloinvest expects iron-ore prices to jump as much as 33 percent by the end of next year, the Moscow-based company said last week. Metalloinvest plans to boost iron-ore output about 20 percent to 36 million metric tons this year as demand surges in China, the biggest consumer of the steelmaking ingredient.

Usmanov, Russia’s seventh-richest man with a fortune of $12.4 billion according to Finans magazine, owns half of Metalloinvest and has stakes in Facebook Inc. investor Mail.Ru Group Ltd., the Arsenal football club and Russian wireless operator OAO MegaFon. Andrei Skotch, a lawmaker in Russia’s lower house of parliament, and entrepreneur Vasily Anisimov own 30 percent and 20 percent of Metalloinvest, respectively.

Anisimov may sell his entire stake to spend more time with his family, the billionaire told the Vedomosti business daily in an interview published last month.

Metalloinvest gets about three-quarters of its revenue from supplying raw materials to steelmakers, including the European mills of ArcelorMittal, U.S. Steel Corp. and Corus Group Ltd. Metalloinvest also operates steel mills in Russia and U.A.E.

The company’s steel output will be little changed at about 6.4 million tons this year, Metalloinvest said in June. ArcelorMittal, the world’s largest steel producer, said Oct. 26 that attempts to raise prices had failed as demand for the metal remained subdued.

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

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

Last Updated: November 3, 2010 02:55 EDT

Metalloinvest, Iron-Ore Supplier to U.S. Steel, Sees Price Gains http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aUgUa1xTcb94

By Ilya Khrennikov

Nov. 3 (Bloomberg) -- OAO Metalloinvest, the Russian iron- ore supplier to ArcelorMittal, U.S. Steel Corp. and Corus Group Ltd., sees prices of the raw material rising as much as a third in a year and plans to expand production.

The spot prices in China, to which Metalloinvest links its export contracts, may gain to as much as $200 a metric ton, from about $150 a ton now, Chief Financial Officer Pavel Mitrofanov said in an interview in his Moscow office on Oct. 29.

Iron-ore companies including Brazil’s Vale SA, the world’s biggest, are boosting production to meet increasing demand from China, the largest consumer of the commodity. Vale said Oct. 28 it would almost double its investment next year to $24 billion as it seeks to expand iron-ore production, as well as expand in non-ferrous businesses including nickel, copper and fertilizers.

Metalloinvest, Russia’s largest iron-ore producer, plans to process so-called hematite ores it currently leaves as waste, adding about 10 percent to its output at a relatively low cost, Mitrofanov said. The company sees 2010 iron ore production up 20 percent at about 36 million metric tons, it said in June.

Metalloinvest also plans to double output of hot-briquetted iron, a form of semi-finished steel, to about 4.5 million tons within several years, the CFO said.

IPO ‘Isn’t Crucial’

The company, which had $6.5 billion of debt in late 2008, has cut borrowings 31 percent since then as iron ore prices recover. It has repaid $2 billion of debt, including loans received under state guarantees, according to Mitrofanov.

While the producer doesn’t rule out the possibility of an initial public offering, it “isn’t crucial either for debt repayments, or for business expansion,” Mitrofanov said. The company generates enough cash flow to service debt and finance capital spending of about $800 million a year, the CFO said.

Metalloinvest is controlled by Russian billionaire Alisher Usmanov, co-owner of Arsenal soccer club and internet company Mail.ru, due to sell shares in London this month. The iron-ore company also makes steel in Russia and the United Arab Emirates.

Margins on earnings before interest, taxes, depreciation and amortization are helping the company, Mitrofanov said.

“In the first half of 2010, we generated the highest Ebitda margin of any ferrous metals and mining company in Russia,” he said, without giving specific figures.

OAO Novolipetsk Steel, typically Russia’s most profitable steelmaker, said on Oct. 4 it had first-half Ebitda margins of 30 percent.

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

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

Last Updated: November 3, 2010 02:02 EDT

Petropavlovsk Cuts 2010 Gold Output Estimate on Delayshttp://www.businessweek.com/news/2010-11-03/petropavlovsk-cuts-2010-gold-output-estimate-on-delays.html

November 03, 2010, 4:49 AM EDT

By Thomas Biesheuvel

(Updates with production estimate from first paragraph.)

Nov. 3 (Bloomberg) -- Petropavlovsk Plc, Russia’s third- largest gold producer, cut its 2010 estimate for output of the metal on delayed equipment deliveries and “harsh” weather.

The company will produce 510,000 ounces to 530,000 ounces, London-based Petropavlovsk said in a statement today. The figures are less than analysts estimated in October, when they cut their outlooks following a site visit. Collins Stewart Plc forecast output of 590,000 ounces, UBS AG predicted 630,000 ounces and Numis Securities Ltd. 614,000 ounces.

“We continued to believe that we could overcome these difficulties in time to meet our production expectations but are now aware that this is no longer feasible because not enough contingency was built into our plans for the year,” Petropavlovsk said in the statement.

Equipment delays and cold weather cut output in the first nine months by 12 percent to 304,600 ounces from a year earlier. The company said on Oct. 7 that it was “striving” to

hit its full-year guidance, and in August said it may miss its 670,000- ounce to 760,000-ounce annual target by as much as 5 percent.

“Our revised forecast production for 2010 is far short of the number that we originally predicted and, indeed, the reduced number we estimated as recently as August,” it said today.

Petropavlovsk produced 138,300 ounces in the third quarter.

--Editor: Tony Barrett

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net.

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

PhosAgro Considers Rival Bid for Potash Corp., Vedomosti Sayshttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aPfkCVI6w6.s

By Henry Meyer

Nov. 3 (Bloomberg) -- OAO PhosAgro, Russia’s largest maker of phosphate fertilizers, is considering a bid for Potash Corp. of Saskatchewan Inc., Vedomosti reported, citing a company document.

PhosAgro Chairman Vladimir Litvinenko wrote to Russian Prime Minister Vladimir Putin on Oct. 20 asking for state credits to make the acquisition, the Moscow-based daily said, citing the letter. Putin forwarded the request to Deputy Prime Minister Igor Sechin, who contacted relevant ministries and state banks, said Vedomosti, without citing anyone. One possibility is a merger of PhosAgro and Potash Corp., it cited a person close to PhosAgro as saying.

Canadian Industry Minister Tony Clement plans to announce his decision on whether to approve BHP Billiton Ltd.’s $40 billion bid for Potash Corp. today after markets close in New York, said an official familiar with the announcement.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

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

Last Updated: November 3, 2010 00:53 EDT

UPDATE 1-Russia's Phosagro eyes bid for Potash Corp – paperhttp://in.reuters.com/article/idINSGE6A208R20101103

11:52am IST

* Phosagro seeks backing of Russian PM Putin for bid-Vedomosti

* Has set deals with Canadian banks for half of funding-paper

* Decision by Canada on BHP's bid due on Wednesday - source (Adds details from newspaper report, background)

MOSCOW, Nov 3 (Reuters) - Russian fertiliser company Phosagro is planning to bid for Canada's Potash Corp (POT.TO: Quote, Profile, Research), the world's top fertilizer maker, rivalling a bid by BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research), business daily Vedomosti reported on Wednesday.

Phosagro Chairman Vladimir Litvinenko has asked Russian Prime Minister Vladimir Putin to approve a potential deal and request financing from Russian banks, the newspaper said, citing a letter from Litvinenko to Putin.

The news comes as Canada insisted on Tuesday it has made no decision yet on BHP's $39 billion offer for Potash, even as two newspapers said bureaucrats were advising the government to allow the bid and rumors swirled in the markets that Ottawa would block it. [ID:nN02206060]

The federal Canadian government will announce its decision on Wednesday, a source close to the matter told Reuters. Ottawa has until the end of Wednesday (0400 GMT Nov 4) to make its ruling public.

Vedomosti said it was unclear how much Phosagro planned to bid for Potash Corp.

It quoted Litvinenko as saying in the letter he knows well Canada's government officials who make decisions on the matter as well as Potash Corp's senior management and that they were not against an alliance with Russia.

Phosagro has also secured preliminary agreements with Canadian banks over providing half of financing needed for the deal, while Russian banks should provide the rest, the paper said.

Phosagro was not immediately available for comment.

Potash Corp said late last month its advisers had identified several potential buyers that could realistically make an offer to buy Potash Corp, competing with BHP Billiton's $39 billion bid. (Reporting by Maria Kiselyova; Editing by Muralikumar Anantharaman)

Pangaea Partners Says Renaissance Bought Stake in Zambian Broker http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aYv0fP_MrVSg

By Renee Bonorchis

Nov. 3 (Bloomberg) -- Pangaea Partners Ltd., a U.S. investment banking group that specializes in emerging markets, said it sold its stake in a Zambian stockbroker to Renaissance Capital for an undisclosed sum.

“It was Renaissance that bought our stake,” Eric Postel, the founder of Madison, Wisconsin-based Pangaea, said in an e- mail today. Pangaea Partners on Nov. 1 said it sold its stake in Pangaea Renaissance Securities Ltd., which started trading in Zambia in 1994, without disclosing the buyer.

Renaissance Capital, the Russian investment bank part-owned by billionaire Mikhail Prokhorov, operates in five African nations and plans to move into Angola, Uganda and Rwanda with the continent already accounting for a quarter of RenCap’s investment-banking business.

Renaissance Capital first purchased a 49 percent stake in Pangaea in Zambia in April 2008.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Edward Evans at eevans3@bloomberg.net

Last Updated: November 3, 2010 02:55 EDT

Wärtsilä and United Shipbuilding Corporation sign Memorandum of Understanding for co-operationhttp://www.yourshipbuildingnews.com/w%C3%A4rtsil%C3%A4+and+united+shipbuilding+corporation+sign+memorandum+of+understanding+for+co-operation_56023.html

Wednesday, Nov 03, 2010

Wärtsilä, a global leader in complete lifecycle power solutions for the marine and energy markets, and United Shipbuilding Corporation (Sudoexport), Russia’s leading shipbuilder, have signed a Memorandum of Understanding. Both parties have expressed the mutual interest to establish joint set-ups in the areas of developing modern ship designs and manufacturing of propulsion systems.

The long-term strategic partnership between United Shipbuilding Corporation and Wärtsilä is aimed to combine the joint expertise of both companies to meet customers’ challenging requirements in building of modern and efficient vessels.

Wärtsilä’s first representative office in Russia was established in 1979. Today, Wärtsilä Vostok LLC employs more than 130 people in its St. Petersburg head office and its branch offices in Moscow, Vladivostok and Murmansk.

United Shipbuilding Corporation is the company formed to integrate the major Russian shipbuilding and ship repair yards, as well as the design bureaus, that together account for more than 70 per cent of all Russian shipbuilding facilities.  www.oaoosk.ru

Sudoexport acts in the interests of the United Shipbuilding Corporation in terms of business development with foreign partners.  www.sudoexport.ru

Russia looks to the sun with with for its first solar power stationhttp://themoscownews.com/business/20101103/188176497.html?referfrommn

Source Tom Washington at 03/11/2010

Plans have been drawn up to build the country’s first solar power station on the Black sea. Nano giant Rusbnano and energy conglomerate Renova have announced their plans to build the 12.3 megawatt staion in the spa town of Kislovodsk.

"This is a breakthrough into a different dimension," Rusnano CEO Anatoly Chubais told an innovation forum in Moscow, RIA Novosti reported.

The station is to be built by the companies joint venture Khevel. The $97 million deal was sealed by Khevel CEO Evgeny Zagordny and Stavropol region governor Valery Gayevsky. Swiss-made thin-film solar panels will be used to trap the rays and the station could be operating by 2012, Zagorodny said.

UPDATE 1-Enel's Russia unit 9-month profit up 66 pcthttp://uk.reuters.com/article/idUKLDE6A124T20101102

Tue, Nov 2 2010

* Russia's OGK-5 reports a rise in 9-mth net profit

* Net profit 4.6 bln roubles vs 2.78 bln last year

* Revises 2009 figures

(Adds detail, revised 2009 figures)

MOSCOW, Nov 2 (Reuters) - Italian group Enel's (ENEI.MI: Quote, Profile, Research) Russia unit OGK-5 (OGKE.MM: Quote, Profile, Research) said nine-month net profit in 2010 came in 66 percent higher than the same period last year due to higher Russia consumption and greater operating efficiency.

The company, 56 percent owned by Enel, said in a statement on Tuesday net profit reached 4.6 billion roubles ($149.4 million) for the nine months to end September, compared with a revised 2009 figure of 2.78 billion roubles.

OGK-5 had earlier reported net profit for the first nine months of 2009 at 2.65 billion roubles.

The net power output for the period was 16 percent above the corresponding period of 2009, the company said.

"The increase in net output was mainly driven by the growth of energy consumption due to economic recovery, colder weather conditions in the first quarter of the year and exceptionally hot temperatures registered during summer months," the company said in the statement.

Revenue increased 29 percent to 37.7 billion roubles from a revised 29.17 billion last year. The earlier published 2009 figure was 30.4 billion roubles.

OGK-5 is one of two Russian electricity generators controlled by overseas firms, the other being E.ON (EONGn.DE: Quote, Profile, Research)-owned OGK-4 (OGK4.MM: Quote, Profile, Research)

OGK-2 (OGK2.MM: Quote, Profile, Research), more than 50 percent owned by gas state monopoly Gazprom (GAZP.MM: Quote, Profile, Research), said on Monday net profit more than doubled quarter on quarter in Q3. ($1=30.78 Rouble) (Reporting by Anastasia Lyrchikova and John Bowker; Editing by Jon Loades-Carter)

Renault-Nissan could increase its stake in AvtoVAZ to controlling level in three yearshttp://en.rian.ru/business/20101103/161193071.html

10:57 03/11/2010

MOSCOW, November 3 (RIA Novosti) - Auto giant Renault-Nissan could increase its stake in Russia's largest car maker, AvtoVAZ to controlling level in two to three years, head of Russian state corporation Russian Technologies Sergei Chemezov said on Wednesday.

"This will happen in two or three years," Chemezov said when asked when the deal could take place.

Renault May Get Control of AvtoVAZ http://www.businessneweurope.eu/dispatch_text13441bneNovember 3, 2010

French automaker Renault and its Japanese partner, Nissan, are in talks with the government on raising their stake in AvtoVAZ to a controlling 50 percent, the Moscow Times reported.

Renault CEO Carlos Ghosn said Russian Prime Minister Vladimir Putin had agreed that Renault could raise their stake to 50 per cent after talks on November 2.

"For Renault-Nissan, that is absolutely logical, and we understand this proposal. We will gladly consider the possibility," Ghosn told Interfax. he said.

AvtoVAZ's three main shareholders Ñ state-run Russian Technologies, the Renault-Nissan alliance and Troika Dialog Ñ each hold blocking stakes of 25 percent.

In July, they signed an agreement on restructuring that would see the state holding's stake increase, while Renault would maintain 25 percent and Troika Dialog's stake would be diluted.

The restructuring takes into account the 75 billion rubles ($2.4 billion) the state gave AvtoVAZ to help it survive plunging demand for cars last year. In his meeting with Ghosn, Putin said that bailout and other emergency measures were already bearing fruit.

"Last year, the company's capitalization was at $670 million, but this year, today, it is already at $1.7 billion. Independent experts have given even higher figures," Putin said, according to a transcript on the government web site.

AvtoVAZ's shares on the MICEX closed flat on November 2.

Sergei Chemezov, the chief of Russian Technologies, said the state corporation would maintain a blocking stake of 25 percent but saw "absolutely no sense" in holding more if Renault-Nissan wanted control, RIA-Novosti reported.

Ghosn did not give any additional details on when a decision could be made or how Renault-Nissan would consider raising its stake. Previously, the group has pledged to contribute technology.

Additionally, late last month Renault and Troika said they were in talks for the French carmaker to buy part of the investment bank's stake in AvtoVAZ. Chemezov has also said Russian Technologies could sell part of its stake to Renault after the secondary share issue.

AvtoVAZ said November 1 that its domestic sales jumped 78 percent last month compared with October 2009. About 54 percent of those cares were sold through the state's cash-for-clunkers program, the carmaker said.

Sibur Planning to Leave Tyre Businesshttp://www.tyrepress.com/News/51/Russia/21022.html

Created: November 02, 2010 03:06:00 PM

Sibur is planning to exit the tyre business “eventually,” in a move that would mark the end of the firm’s tyre subsidiary - Sibur-Russian Tyres - in its current form. Speaking to journalists at a recnt press conference, Dmitry Konov, chair of the executive board and president of Sibur said he expects a significant degree of consolidation amongst the Russian tyre makers in the coming years. The company’s eventual aim is to dispose of the tyre production assets “at a profit,” he explained.

For some time Sibur has been working on acquiring the assets of the bankrupt Amtel NV, having acquired Amtel’s debts over the summer. The situation is complicated, but according to a Sibur spokesman, “Sibur now has full operational control of all the assets of Amtel.”

Sibur said the three domestic tyre makers need to broaden the range of tyres they make, adding new sizes and dimensions in consumer tyres and improving the technology used in truck tyres. In consumer tyres, it is all about raising the profile of the existing brands and removing the negative connotations of the made in Russia label. This is not expected to mean. According to a report in the European Rubber Journal (ERJ) this does not mean Sibur Russian Tyres expects to compete with Michelin and Nokian at the top of the brand tree, but rather to offer “fierce competition in the mid range.”

This means investing in the Voronezh 2 tyre plant, which has been standing idle since Amtel's bankruptcy. ERJ added that the mixing room “still needs to be installed to make silica compounds for tyres.” A Sibur spokesman reportedly said it was possible

competitor Nizhnekamskshina might participate in that investment, but side stepped details of how the two companies could be working together as a joint venture.

Russia’s Vedomosti newspaper reported that Sibur Holding and Nizhnekamskshina, intend to merge their tyre back in August. At the time the news that the two companies were in talks was confirmed by a Tatneft official.

Russia has the technologyhttp://rt.com/Business/2010-11-03/russia-technology-kundert-semi.html/print

03 November, 2010, 10:48

With investors in Russian for the international nanotechnology forum Business RT spoke with Heinz Kundert, President of SEMI Europe about plans to promote technology in Russia.

HK: “I haven’t fully understood the project, so I cannot tell you exactly is in their mind. But what I can tell you is that I have been working with Russian technology for 30 years, and I have seen the history of technology in Russia, and the technology is excellent. So, there is a lot of stuff here. A lot of patents, a lot of brilliant people. The problem is to translate that into brilliant products and applications. To build up an industry. That’s the bottleneck, and I think the Russian government has understood that, and they want to build up a strong industry. So, it’s not technology, it’s not science, forget about that in Russia, it’s about building an industry. You have a wonderful cluster in Russia, this is Zelenograd. Zelenograd has manufacturing of semiconductors, has technology, has SME’s, so small and medium enterprises, has an excellent university, has a lot of institutes. So this is the cluster, for semiconductor manufacturing, is a model. And it takes a very long time. Russia has everything, but no time.”

RT: Why hasn’t nanotech captured the public imagination?

HK: “You cannot see that, and that’s the problem, it’s very difficult to explain that to the consumer, when they buy a product, what is nano – is it good, is it bad? – nano is part of everyday life in all our gadgets, applications, in our car, in a telephone. Wherever you go, nano is part of our life.”

RT: What sort of nano products can people see in the shops?

HK: “It is coming more and more, and also it is energy saving, reducing the amount of materials used. It’s improving your performance. There is a variety of applications and products.”

Net buying picks up steamhttp://rt.com/Business/2010-11-03/citibank-google-internet-shopping.html/print

03 November, 2010, 11:35

The internet may become Russia’s second most popular promotion tool after Television, online buying also growing rapidly amongst Russians

Virtually everything can be done through the internet from buying hi-tech gadgets to just paying the bills and Russians are hooked on that noted Aleksey Surkov, Tech lead, Google.

“We examined what people are searching for. It turns out the use of the phrase “buy online” has increased three-fold since 2008. Most of the requests are coming from Moscow and Saint Petersburg, which account to over 70 per cent of all search requests on buying.”

Research by Google and Citibank shows Russians most often pay for things like telecom services which account for 29 per cent of all operations. Railway tickets and music are gaining momentum with more than 10 per cent share out of all internet payments. Interest in News and Data displays a 6 per cent share along with air tickets.

The volume of web purchases in Russia amounts to no more than 1% of GDP. In comparison, the figure for England is 7 times higher. Russia’s internet market is gaining popularity and makes a good alternative to traditional shopping according to Andrey Oberemok, Head of the Analytical department at Citibank Russia.

“The market of internet purchases in 2010 is around $20 billion according to our estimates. In two years it could grow up to $29 billon. Last year, despite the crisis, it showed substantial growth and forced some companies online, where the costs are less, and profitability is greater.”

According to Citibank and Google investigation the typical portrait of an online buyer in Russia is a single university male student or graduate from Moscow. Women, nevertheless, still prefer the classic shopping techniques.

Russian Channel One ownership confirmedhttp://www.broadbandtvnews.com/2010/11/03/russian-channel-one-ownership-confirmed/

By Chris DziadulPublished: November 3, 2010 07.43 Europe/London

Roman Abramovich has been officially confirmed as the 49% owner of Channel One, Russia’s leading broadcaster.

In a wide ranging interview in Kommersant, John Mann, the head of information policy at Millhouse, Abramovich’s asset manager, went on record to clear up confusion caused by a report in the newspaper Vedomosti.

According to Mann, the 49% stake in ORT was bought on behalf of Abramovich from Boris Berezovsky for $175 million (€125.3 million) in 2001. Berezovsky is currently suing Abramovich, claiming that he was underpaid for the asset.

Mann revealed that Abramovich had received dividends totalling R113,66 million (€2.64 million) from Channel One between 2004-7.

He also denied that there are any plans to sell the 49% stake in Channel One.

Yahoo! launches Russian version of its web portal

http://www.businessneweurope.eu/dispatch_text13441

Renaissance CapitalNovember 3, 2010

Event: Yesterday (2 Nov) Yahoo! launched a Russian version of its web portal. In addition to a search engine, the Russian version includes mail service, instant messaging, access to different social networks, news and other applications. Yahoo! has tried to enter the market before and its current decision is an indication of growing interest in the Russian internet market from international players, in our view. Currently, the market is dominated by Russian players - Yandex, with 62.9% market share, is the leader in the Russian internet search market, followed by Mail.ru (7.1%) and Rambler (2.1%), while Mail.ru is Russia's most popular portal. The arrival of Yahoo! and other international players should tighten competition and in the medium term could potentially reduce the market share of Russian internet companies.

David Ferguson

Activity in the Oil and Gas sector (including regulatory)

First Russian oil reaches Chinahttp://english.ruvr.ru/2010/11/03/31319779.html

Nov 3, 2010 10:45 Moscow Time

The first batch of Russian oil has arrived at the city of Mohe in the northeast of China via a spur of the Eastern Siberia – Pacific pipeline.

   The oils is now expected to reach the oil refinery in Daqing, which boasts 18 depots with a capacity of 100 thousand cubic meters.

    Until now Russia supplied oil to China by rail.

Russia – China Pipeline delivers first oil to Chinahttp://pipelinesinternational.com/news/russia_china_pipeline_delivers_first_oil_to_china/052173/

Wed, 3 November 2010

The 964 km Russia – China Oil Pipeline, which forms part of the first stage of Russia’s East Siberia Oil (ESO) Pipeline, has delivered first oil to the Chinese border.

Construction of the Russia – China Oil Pipeline, which runs from Skovorodino in Russia’s Far East to China's northeastern city of Daqing, was completed in September 2010.

The ESO Pipeline is being constructed in two stages.

The first stage of the pipeline runs 2,757 km from Taishet, Irskutsk Region, via Yakutia to Skovorodino in the Amur Region. A 1,100 km section of the first stage was brought online in October 2008.

The second stage of the ESO will run 2,100 km from Skovoridino to the Pacific coast. Currently the oil is transported by rail from Skovoridino to the port of Kizmino on the Pacific coast.

Upon completion of the second stage, the ESO pipeline will traverse 4,857 km.

In January 2010, Russian Prime Minister Vladimir Putin opened the first stage of the ESO pipeline at a ceremony held at the port of Kozmino on Russia’s Pacific Coast.

October gas output: Gazprom's position firming, albeit slowly http://www.businessneweurope.eu/dispatch_text13441

Troika DialogNovember 3, 2010

October gas output data indicate an ongoing seasonal recovery in demand, with Gazprom's production dynamics staying in positive territory (up 2.6% y-o-y after 2.8% growth in September and a 2.0 % decline in August). It also saw NOVATEK's y-o-y

growth accelerating to 12.7% after a rise of 11.5% in September and 8.6% in August. Gazprom's position is firming, albeit slowly, production in October, spurred by seasonal demand, exceeding not only the figure for October 2009 but also the corresponding pre-crisis level in 2008.

That said, Gazprom's 10m10 gas output remains a hefty 10.0% below the corresponding 2008 score, despite rising 13.2% y-o-y. We expect Gazprom's full-year production, hit by export market weakness, to come in at 505-510 bcm. This would imply Gazprom this year making up only half of the gas output lost in 2009. At this stage, the results should be viewed as a tangible improvement in operating performance, even though output is expected to be the second-lowest figure for the past two decades.

The situation is much brighter for NOVATEK. In October, the company announced the start of the final stage of development at the Yurkharov field. Two additional processing units for separating natural gas have been launched at the field, expanding Yurkharov's productive capacity to about 33 bcm per year of natural gas and approximately 3 mln tonnes of unstable gas condensate.

Russia asks EU to help Surgutneftegas acquire MOL shareshttp://en.rian.ru/business/20101103/161193873.html

11:36 03/11/2010

MOSCOW, November 3 (RIA Novosti) - Russian Deputy Prime Minister Igor Sechin has asked the European Union to help Russian energy company Surgutneftegas acquire stock in Hungary's oil company MOL, Sechin's administration said on Wednesday.

"The coming of Surgutneftegas, which produces 65 million tons of oil per year, into property rights for acquired shares will strengthen MOL's position on the market from the point of view of crude supplies," an administration official quoted Sechin as telling European Energy Commissioner Gunther Oettinger.

The official quoted Oettinger as saying he would scrutinize the issue.

In March 2009, Surgutneftegas bought 21.2 percent of MOL from Austria's OMV for 1.4 billion euros. The deal displeased Budapest, with Hungarian President Laszlo Solyom saying the purchase threatened the country's energy security.

MOL considered the deal between Surgutneftegas and OMV as hostile and accused OMV of collusion with the Russian company and of initially buying shares in Surgutneftegas' interests.

MOL contests Surgutneftegas' rights as a shareholder and insists it disclose its beneficial ownership. In April, MOL's board of directors refused to include Surgutneftegas in a shareholder list and the Russian company attended MOL's annual shareholders' meeting in May as an observer.

Surgutneftegas has filed a court suit against MOL for the refusal to include it in the shareholder list.

Surgutneftegas-Rosneft merger rumors resurface http://www.rbcnews.com/komment/komment.shtml

As gov’t takes a closer look at its privatization plans

After the government announced its plans to sell part of its stake in Rosneft, the rumors of the Surgutneftegas-Rosneft merger that ran rampant on the market earlier are heating up again. According to RBC Daily, the government is currently discussing the option of selling 15 percent or even more in Rosneft. Meanwhile, since the government is opposed to the idea of admitting foreign investors to the oil giant, Surgutneftegas and VTB are slated as the main prospective buyers.

According to a source familiar with the matter, the government is now negotiating to choose the buyer of the Rosneft stake. “The company has a lot of debts, so a potential investor must have uncommitted cash at hand to help the company repay some of them,” the source explained. In his estimation, Vladimir Bogdanov’s Surgutneftegas, with its considerable amount of idle cash ($17.3bn as of the end of 2009), is a strong contender. Part of the stake could also be sold to VTB. The source added, however, that the government did not see any foreign strategic investors as an option, since such an investor would be in a position to influence the activities of what is still a state-run company. The source did not reveal the exact mechanics of the deal – whether it will be a merger or a strategic partnership.

VTB and Surgutneftegas have declined to comment on the situation. Unofficially, however, the oil company confirmed that rumors on the possible acquisition of a stake in Rosneft were being discussed in the government, while a source in the state-owned company, although acknowledging the issue, said it was still too early for any actual moves.

In late October 2010, Russia's First Deputy Prime Minister Igor Shuvalov announced that the government intended to sell 15 percent in Rosneft, thus slashing its stake to 60 percent. At that time, he admitted that the government could cut its stake even further, but noted that the final decision was contingent on the market.

Meanwhile, market experts cite the fact that the acquisition could be the first step towards a merger of the two oil companies. The rumors have already been live on the market for a few years now. In 2006, it was assumed that the state-run company would buy a controlling stake in Surgutneftegas for roughly $20bn. In 2009, the gossip picked up again when Bogdanov took a seat on Rosneft’s board of directors. Yet, the government refuted a likely merger.

According to analyst Alexei Kokin at Uralsib, Bogdanov’s election to Rosneft’s board of directors was widely seen as a signal that the two companies would merge. Currently, the

deal seems to be more than just practicable: if Surgutneftegas had enough funds to buy 21.2 percent in Hungary’s MOL, it is highly likely that it can afford Rosneft. “The 15-percent stake in Rosneft is worth roughly $11bn. That is way too much for Surgutneftegas, but it will still be able to digest half the stake, that is, 7.5 percent for around $5.5bn,” Kokin explained.

Another expert, Anna Luneva of the Center for Political Information, believes that Bogdanov has been saving up precisely in order to buy a large stake in Rosneft. “Rosneft’s debt is closing in on $14bn, and it has to get rid of it. To do this, a prospective investor must benefit the company in all respects – and Surgutneftegas does. It is no coincidence that Bogdanov is currently on Rosneft’s board,” Luneva asserted.

If the deal is actually made, it will benefit both sides involved. For Surgutneftegas shareholders, it will serve as a way to avoid accumulation of idle cash on low-interest deposit accounts, and will even pay back huge dividend. For Rosneft, it will help the state-owned company finally cut its debts.

Analytical department of RIA RosBusinessConsulting

Rosneft Samara Refinery Investments Signal Growing Russian Downstream Gaphttp://www.oilandgasinsight.com/file/93840/rosneft-samara-refinery-investments-signal-growing-russian-downstream-gap.html

November 2010 | Project NewsRussian state-owned oil giant Rosneft has allocated US$3bn to upgrade its refineries in the Samara region, according to remarks made by the region's Governor Vladimir Artyakov on October 29.

02.11.2010

Bashneft Wins Tenders for Arctic Oilhttp://www.oilandgaseurasia.com/news/p/0/news/9359

The Russian oil company OAO Bashneft had the highest bid for the two oil fields Titov and Trebs in the Nenets Autonomous Okrug.

The company may increase its reserves about 70 percent after getting this tender, Businessweek.com writes. The Titov and Trebs fields, discovered in the Soviet era, are with their reserves of respectively 63,4 and 78,9 million tons of oil among the biggest untouched fields in the Timan-Pechora province.

The only other company in the bid for the tender, Surgutneftegas failed to make a necessary cash deposit, a spokeswoman at Russia’s Ministry of Natural Resources said.

Six companies wanted to participate in the tender to the two oil fields, but only Bashneft and Surgutneftegas were allowed by the Ministry of Natural Resources to participate. The four other contenders – Lukoil, Gazprom Neft, TNK-BP and ONGC were for various reasons held out of the tender, as BarentsObserver reported.

Copyright 2010, Barents Observer. All rights reserved.

Gazprom

Gazprom mulls offering Eurobonds on foreign markets in 2010http://www.prime-tass.com/news/show.asp?topicid=0&id=700000192

MOSCOW, Nov 3 (PRIME-TASS) -- Russian natural gas monopoly Gazprom is considering offering Eurobonds on foreign markets in 2010, ITAR-TASS and Bloomberg reported Wednesday citing Gazprom Deputy CEO Andrei Kruglov.

Gazprom has not offered bonds on foreign markets since it placed a U.S. $1.25 billion 5-year Eurobond and an 850 million euro 5.5-year Eurobond in July 2009.

Kruglov said that the situation had changed since that time and the company was considering foreign markets as a priority for borrowing funds.

End

03.11.2010 12:10

Gazprom refutes new agreements on price of gas for Ukrainehttp://www.kyivpost.com/news/business/bus_general/detail/88575/

Today at 10:43 | Interfax-Ukraine The price of natural gas for Ukraine for the first quarter of 2011 would be defined under the existing formula, an official representative of OJSC Gazprom Sergei Kupriyanov in an interview with the RT TV channel late on Monday.

“We have a contract, according to which the price is calculated. We don’t have new agreements on the price of gas,” he said.

Kupriyanov said that the price is adjusted every quarter depending on fuel price changes.

November 03, 2010 11:30

Gazprom Neft plans to increase oil production 6%-7% each yearhttp://www.interfax.com/newsinf.asp?id=199838

MOSCOW. Nov 3 (Interfax) - Gazprom Neft (RTS: SIBN) plans to increase oil production 6%-7% a year, Deputy CEO for Exploration and Production Boris Zilbermints is quoted in the in-house journal Sibirskaya Neft as saying.

The Yamal and Gydansky peninsulas, alongside existing assets, are the company's zones of interest. The territory is subject to extreme cold and difficult geological conditions that necessitate effective technological solutions, Zilbermints said.

The company must also deal with problem of developing nearly depleted fields, which make the goal of boosting yields a priority.

It was reported earlier that Gazprom Neft expects annual production to reach 100 million tonnes by 2020.

RTS$#&: SIBN

Gazprom, EU to collaborate on EU legislative initiative

http://www.rbcnews.com/free/20101102183413.shtml

      RBC, 02.11.2010, Moscow 18:34:13.Gazprom and the European Commission on energy have agreed to form a joint working group to discuss matters regarding the implementation of the Third Energy Package, the Russian energy holding's information department announced following a meeting between Gazprom CEO Alexei Miller and EU Energy Commissioner Guenther Oettinger. According to the statement, the working group will also review the effects of the European Commission's legislative initiative on the implementation of Gazprom's long-term contracts.

      During today's meeting, the parties discussed the future of Russian-European cooperation in the gas sector and reached an understanding that it is necessary to compile a presentation on the potential of Gazprom-EU cooperation.

      In October of this year, Gazprom's deputy chairman of the executive committee Alexander Medvedev voiced concern that the EU's legislative initiative - the Third Energy Package - eliminated Gazprom's access to the management of gas

transportation assets on the territory of the EU. "This devaluates all investments into gas transportation assets for gas suppliers," he warned.

Italian Edison Sues Gazprom Subsidiary over High Gas Prices http://www.businessneweurope.eu/dispatch_text13441AtonNovember 3, 2010

Kommersant reports today (3 Nov) that Italian company Edison has taken legal action against Gazprom and ENI's 50/50 JV Promgas over high gas prices charged in long_term contracts.

Current spot prices for gas in Europe are approximately 20% lower than Gazprom's long_term contract prices and Edison says it must accept losses due to these contract terms. The company has a contract with Promgas under which it will receive 2bcm per year until 2022. The amount of the legal claim was not disclosed, but Edison's CEO said the sum is significant and will allow one company (Edison) to post profits at the expense of the other (Gazprom).

Bottom line We believe the news is marginally negative for Gazprom shares. However, we do not believe there are sufficient reasons for Edison to win its suit. We also doubt that other large European consumers will take legal action against Gazprom because it could worsen relations with a key supplier. This year the largest European consumers received discounts from Gazprom, not via the courts, but rather through negotiations.

ArmRosGazprom will put into action new underground natural gas storage reservoir at Abovian facilityhttp://www.arka.am/eng/energy/2010/11/02/22227.html

YEREVAN, November 2, /ARKA/. Armenia’s natural gas operator, ArmRosGazprom (ARG), a joint venture with Russian Gazprom, will put into action a new underground natural gas storage reservoir at its Abovian facility, Roland Adonts, an aide to ARG CEO, said today. Speaking at a news conference he said it will be the 27-th underground reservoir, which is located 1000 meters deep with a capacity to hold 19-20 million cubic meters of gas, 1.6 times more than any of the currently used reservoirs can do.

This, he said, will increase the current capacity of the gas storage to 140 million cubic meters. He said in the facility’s capacity will be raised to 170 million cubic meters in 3-4 years and to 200 million cubic meters in nine years.

Vyacheslav Asriyan, head of an ARG department in charge of the system’s operation and maintenance, said ARG will have invested one billion Drams by the yearend in upgrading

the Abovian facility.

The Abovian gas storage is one of the principal elements of Armenia’s gas transmission system ensuing the country’s energy security. It was constructed in 1962 on rock salt deposits at a depth of 800-1,000 meters. The gas storage regulates also the seasonal gas consumption by Armenia’s industrial sector and supplies gas to the country’s most important gas consumers.-0-

Gazprom's Trusty Business Model: The Strong Arm Methodhttp://seekingalpha.com/article/234119-gazprom-s-trusty-business-model-the-strong-arm-method

November 03, 2010

Several Gazprom-related stories, with a common (and all too familiar theme): The company’s rather unconventional ways of trying to win friends and influence people. Unconventional, except for the Mafia, perhaps.

First, Mr. Charming, Oleg Sechin, went to Turkmenistan along with Medvedev, and went on at length as to how Ashgabat should run its gas business. Don’t ship gas to Europe. Don’t ship it to China. Ship it across Afghanistan (!) to Pakistan and India. Oh, and by the way, if you “choose” the latter alternative, of course Gazprom (OGZPY.PK) is willing to “help” in whatever way it can:

Russia’s top energy official, Igor Sechin, who accompanied Medvedev and met the Turkmen president, said Russia was interested in taking part in Turkmenistan’s Subcontinent pipeline project.

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, conceived in Soviet days, never got off the ground. But last month plans to build it were revived after the four countries signed an new framework agreement.

“The issue of Gazprom’s participation in the TAPI gas pipeline was discussed during this visit,” Sechin, told reporters.

“Gazprom may participate in this project in any capacity — builder, designer, participant, and so on,” said Sechin, adding Gazprom, Russia’s state-owned energy giant, would consider importing more gas from its southern neighbour.

Sechin pointedly suggested that Turkmenistan fuggedabout sending gas to Europe:

Sechin, however, went out of his way to discourage Turkmen gas exports to Europe. He insisted that European gas markets could hardly absorb Turkmen gas in the years ahead, due to depressed demand and diversification of supply from sources other than Turkmenistan. He stated, repetitively, that the EU-backed Nabucco project had “no

future” due to insufficient gas supplies (an outcome that he promoted by trying to discourage Ashgabat from participating). Moreover, Sechin claimed, Russia’s South Stream project will advance faster than Nabucco, preempting gas resources and making Nabucco redundant. He implied that Ashgabat shared his views; an insinuation rebuked six days afterward in Ashgabat’s statement.

There is some dispute about what Sechin said, or implied, about Turkmen gas shipments to China. Two analysts quoted by Reuters assert that Russia wants to divert Turkmenistan from China:

“And second, it is in Gazprom’s interest to divert Turkmen gas flows away from markets desired by Gazprom, from Europe and from China. China is a coveted market for Russians and Turkmenistan has already taken out a big bite,” Nesterov said.

In December 2009 Turkmenistan commissioned a 1,833-kilometre (1,139-mile) China-bound gas pipeline, which runs through Uzbekistan and Kazakstan to China’s north-western Xinjiang region.

China receives 24.5 million cubic metres of Turkmen gas a day via the pipeline. In 2012-2013 this will equal 40 bcm, almost as much gas as Russia used to import. Meanwhile, Russia is also attempting to boost its own gas exports to China.

“If Turkmenistan gets its own pipeline to India, or an alternative route westward, like it did with China, Gazprom can no longer negotiate from a position of power,” said Alexei Kokin, an oil analyst at Ural Sib.

Vladimir Socor claims, however, that Sechin strongly encouraged Turkmenistan to pursue opportunities in China:

Conversely, Sechin encouraged Turkmenistan to increase gas exports to China, an “almost infinite market” that could absorb both Turkmen and Russian gas.

Some comments. First, it appears that Sechin doth protest too much about the poor export opportunities to Europe. His remarks in this regard were clearly just another sally in Russia’s ongoing campaign to choke off competition for Russian gas in Europe, and to keep the Europeans in Gazprom’s thrall. If the European market is so bad, why is Gazprom so eager to build not one but two pipelines there? Second, Russia wants to hamstring Turkmenistan’s efforts to direct its gas to Asia and the Indian subcontinent, and what better way to do that than to get Gazprom involved in some way. Gazprom involvement in a pipeline means (a) higher costs, (b) chronic delays, and (c) the ability to interfere with the marketing of Turkmen gas. Turkmenistan would be well advised to steer clear.

And it may be doing just that. Ashgabat responded sharply to Sechin’s remarks, basically telling him–and Russia–to shove it:

Turkmenistan’s Foreign Ministry accused Russia of interfering in the country’s attempt to develop international energy ties following Russian claims that the European gas market had no place for Turkmen natural gas.

“Turkmenistan views the published remarks as an attempt to interfere in the normal course of international energy relations, and cast doubt on our responsibilities to our partners,” the Turkmen ministry said in a statement on its website today.

. . . .

“Deliveries to Europe have become more realistic ever since Russia lowered its purchases of Turkmen gas,” the ministry said in the statement. “Turkmenistan will continue to develop European aims in its energy policy.”

Smart move. Turkmenistan seems to have learned its lesson from The Producers episode of April, 2009, during which Russia caused an explosion in the pipeline from Turkmenistan because it no longer wanted to pay for the gas that it thought it had been so clever buying the year before.

I once said that Turkmenistan was so close to Russia, so far from God. I can’t speak about its distance from God, but it is clear that it is moving away from Russia, which is a good thing. Hopefully that even the Europeans and Americans are not so clueless as to miss out on this opportunity to put a crimp in Gazprom’s plans.

Second item: Gazprom wants India’s stake in Sakhalin I, and will supply LNG in exchange:

OAO Gazprom is considering supplying liquefied natural gas to India in exchange for the 20 percent stake in the Sakhalin-1 project held by state-owned Oil & Natural Gas Corp., the Indo-Asian News Service reported citing Stanislav Tsygankov, the head of foreign relations at the Russian company.

Gazprom is considering this, you see. Uhm, what about the Indians?

Given Gazprom’s track record in Sakhalin, most notoriously Sakhalin II, but also its leaning on Exxon (XOM) to prevent it from selling Sakhalin I gas to China (something I wrote about last year) makes me very skeptical about Gazprom’s motives in this case.

Moreover, reading “Gazprom” and “LNG” in the same sentence pegs my BS meter. The gap between Gazprom’s talk and its walk on LNG is huge. Essentially Gazprom is asking ONGC to give up something valuable today on the promise of getting something that Gazprom has a poor track record of delivering. India should take a pass. It will be interesting to see, though, whether Russia will let it take a pass, or whether this is one of those offers not to be refused.

The last item: apparently the new bonds of fraternal friendship between Great and Little Russia, I mean Ukraine, don’t extend to gas:

Russia and Ukraine were unable to agree a new gas supply deal sought by the cash-strapped Ukrainian government on Wednesday, leaving the threat of a new year gas war hanging in the air.

In January 2009, a pricing row between Moscow and Kiev resulted in a stoppage of Russian gas flows to Europe for about two weeks, tarnishing Russia’s image as a reliable exporter and spurring a European quest for new suppliers.

The two ex-Soviet nations will continue gas talks, senior Russian officials said on a visit to Kiev on Wednesday, indicating Moscow continues to seek control over Ukraine’s transit pipelines as a condition of a price discount.

Ukraine depends heavily on imports of Russian gas, governed by a 10-year deal struck in 2009. But Kiev, which tranships 80 percent of Russian Gazprom’s gas bound for Europe, says the current agreement is unacceptable.

Winter is coming. I hope the Europeans have topped off their storage.

About the author: Craig Pirrong Dr Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business of the University of Houston. He was previously Watson Family Professor of Commodity and Financial Risk Management at Oklahoma State University,