Russia 090811

Basic Political Developments Halonen to Meet with Russian President Medvedev Tuesday - President Tarja

Halonen is expected to once again bring up the sticky issues of wood tariffs and the Baltic natural gas pipeline when she meets with Russian President Dmitri Medvedev today. European security policy is also believed to be high on the list of discussion topics.

Finnish President to Russia President Dmitry Medvedev, Prime Minister Vladimir Putin continue working

visit to Sochi, until Aug 15 Medvedev blasts 'anti-Russian' Ukraine - President Dmitry Medvedev on Tuesday

furiously attacked Ukrainian counterpart Viktor Yushchenko, saying his administration was anti-Russian and had caused the worst crisis in ties since the Soviet collapse.

Medvedev delays arrival of new RF ambassador to Ukraine Russia says Ukraine putting gas to Europe at risk - Russian President Dmitry

Medvedev accused Ukraine on Tuesday of seeking to disrupt economic ties with Russia and putting at risk the safety of gas supplies to Europe.

Medvedv: 'Kiev risks Europe's gas supply' “No new Russian ambassador to be sent to Ukraine” – Medvedev: President

Dmitry Medvedev reveals the reasons behind refraining from sending the new Russian ambassador to Ukraine just yet, as well as the roots of strain in Russia-Ukraine relations in his new video blog message.

No hope for normalizing relations with Russia under current leadership - Party of Regions leader Viktor Yanukovych said that there is no hope today for an improvement in the Ukrainian-Russian relations.

NATO's secretary-general, Russia's envoy to discuss improving ties: Dmitry Rogozin will be received by Anders Fogh Rasmussen, the former Danish premier, who replaced his Dutch predecessor Jaap de Hoop Scheffer on August 1 as NATO's 12th secretary-general.

Vladimir Putin to visit Poland, but only for a few hours Coveted Russian Market Becomes Battleground In GM-Opel Talks: GM fears a

deal with Magna International Inc. (MGA), the German government's favored suitor, would essentially hand over advanced engine and transmission technology to Russia and stymie the auto maker's ability to compete there down the road.

Russian Proton-M carrier rocket set to orbit Chinese satellite - A Proton-M rocket with a Chinese telecommunications satellite will be launched on Tuesday from the Baikonur space center in Kazakhstan, the Russian Federal Space Agency said.

Bangladeshi N-power team to visit Russia in Oct: official - A government delegation is awaiting the final nod from the prime minister's office to visit a Russian nuclear power plant, an official of the science ministry told bdnews24.com on Monday.

Russia, Belarus sign off on nuclear power station draft agreement - The governments of Russia and Belarus signed off on a draft agreement that would see Russia build a the first nuclear power station in Belarus, reports Interfax.

Turkey: Nuclear plant tender to be finalized in September - A joint venture composed of AtomStroyExport -- which has constructed nuclear energy power plants in Russia for Rosatom -- Inter Rao UES JSC and the Ciner Group's Park Teknik was the sole bidder in a tender held in September 2008 for the construction and operation of the nuclear plant for 15 years.

Russia on Pace to Meet Chemical Disarmament Deadline, General Says - "We will meet all deadlines," said Gen. Nikolai Abroskin, head of the Russian Federal Special Purpose Construction Agency. "There will be no delays in the implementation of the international convention. Today, the state authorities regard the federal program 'Destruction of Chemical Weapons Stockpiles in the Russian Federation' as one of the most successful programs in the country."

Secret cargo aboard missing ship? - The “Arctic Sea” ship which disappeared in the Atlantic was carrying a cargo of timber worth nearly $2 MLN and, perhaps, a “secret” cargo says Mikhail Voytenko, editor-in-chief of the Russian maritime bulletin Sovfrakht.

Thai court rejects US request to extradite Russian - Tuesday's ruling marks a setback for the United States, which used an elaborate scheme to lure Viktor Bout to Bangkok in March 2008.

Thai court refuses to extradite "Merchant of Death" to U.S. - The United States wanted to try Bout, dubbed the "Merchant of Death," for conspiracy to sell millions of dollars of weapons to rebels from the Revolutionary Armed Forces of Colombia (FARC), which it said could be used to kill Americans.

Thai court has ruled against extraditing Bout to the US Russian FSB services helped Hizbullah bust spy ring – report Two workers of non-gvnmtl organization found dead in Grozny Humanitarian group leader, husband found killed in Chechnya - The bodies of the

head of a humanitarian organization and her husband were found in Grozny early on Tuesday, a spokesman for Chechen investigators said.

Charity head found dead in Chechnya -- report Memorial: kidnapped Chechen activist found dead Human rights activist abducted in Chechnya: activists - "Today, towards two

o'clock, unidentified armed men got into the offices of Let's Save the Generation and abducted its leader, Zarema Sadulayeva, and her husband," said Alexander Cherkasov of Memorial, the Interfax news agency and Moscow Echo Radio reported on Monday.

Human rights activist murdered in Caucasus region -    Sadulayeva and her husband were both found dead, relatives told the German Press Agency dpa from the Chechen capital Grozny. The couple was abducted by gunmen on Monday.

Hospital Releases Recovering Yevkurov - Ingush President Yunus-Bek Yevkurov, who was badly injured in a suicide bombing in June, was released from a Moscow hospital on Monday and said he might be back to work in a week.

Recovering Ingush leader targets return to work in month - "I would like to return to work right away, but it looks as though I will have to wait for about a month. But I hope to return home in a week. Upon arrival in the republic, I will gather an extended session of the government and hear reports on who worked how," Yunus-Bek Yevkurov told government daily Rossiiskaya Gazeta.

Kudrin: Russian economy will need 4-5 years to recover -"I think it could take four to five years to return to the previous level of GDP in real terms and for the economy to recover from the decline of about 8.5% to be seen this year. Growth of 1% is already planned for 2010. This means that we will have less revenue in real terms over these four to five years. This means that we should calculate our programs for a period of four to five years and not for one year," Kudrin said.

Regional Leaders Criticized for Overspending - Prime Minister Vladimir Putin on Monday scolded regional leaders for spending too much and urged them to borrow carefully as the federal government faces its first budget deficit in a decade.

Medvedev Submits Troops Bill - President Dmitry Medvedev sent a bill Monday to the State Duma that would allow for the deployment of the Russian military virtually anywhere abroad, although a senior lawmaker brushed off the announcement as a gimmick to intimidate Georgia.

Hate crimes rate in Moscow down somewhat – prosecutor City of Moscow to borrow 241.1 bln roubles in 2010-report Russian Hunger Strikers Demand Overdue Salaries, Severance - Workers at

RegionAvtoTrans-Kurgan in the Russian city of Kurgan have resumed a hunger strike after the transport company's management reportedly failed to make good on a pledge to catch up on overdue payments, RFE/RL's Russian Service reports. What People of the Russian Far East Looked for in July - Top Yandex Searches

MT: Putin’s Team Relies on Familiar Faces - Many officials appointed by Putin “occupy their posts exclusively by Putin’s grace and often to the detriment of professionalism,” said Alexei Mukhin, an analyst with the Center for Political Technologies.

National Economic Trends Russian economy shrinks 10.9% Russia Output Shrank Record 10.9% Last Quarter as Slump Deepens Ruble Gains Versus Dollar First Time in Week Before GDP Report Russian government to decide on bond issue in September Russian Harvest Reached 45.3 Million Tons of Grain on Aug. 10

Business, Energy or Environmental regulations or discussions MDM and URSA: Post-merger comments and rating actions Government announces new rules for 'guaranteed investment projects' - A

Ministry of Energy press statement issued on Friday (7 Aug) announced the adoption of new rules governing so-called 'guaranteed investments' in new electricity generation capacity.

Electricity Council latest figures show 10% contraction in demand TGK-13 to raise $75m loan from EBRD Rusal may IPO to raise money for debts RusAl Deal Broker Available - Vladimir Strzhalkovsky, chief executive officer of

Norilsk Nickel, offered to find buyers for the 25 percent stake in his company held by United Company RusAl if it opts to dispose of the shares.

Severstal eying purchase of Holding Gonvarri Russia Alfa to take control of Estar Donetsk steel mill – Report

Raspadskaya raises domestic coal prices and increases supply to China Mechel signs memorandum of cooperation with Mitsui Sistema to start placing 20 bln rubles in second series bonds Aug 18,guidance

14.95% Uralkali to Boost Supplies to Fertilizer Firms - Uralkali agreed to sell more to

three domestic fertilizer makers to bolster supply from Silvinit, Uralkali said Monday.

CTC Media set to expand - Kommersant reports that the commercial broadcaster, which is backed by Modern Times Group (MTG), is hoping to enter into a joint venture with the Belarusian cable operator BelMuzTV.

Isuzu's Russia venture with Sollers halts production VEB to Help Finance Aeroflot Jet Purchase - Aeroflot, Sukhoi Civil Aircraft and

VEB will sign an agreement next week under which the bank will finance the delivery of Superjet aircraft to Aeroflot, Industry and Trade Minister Viktor Khristenko said Monday.

Magnit Russian Sales Advanced 30% in July to 14.6 Billion Rubles

Activity in the Oil and Gas sector (including regulatory) Russia could hike oil export duty to $237-$241 a tonne on Sept 1 –official Source: Lukoil Takes Out $1.2 Bln 3-Yr Club Loan - Prime-Tass GE Oil & Gas Develops Unique –60ºC Gas Turbine Generators For Rosneft

Power Station At Vankor Oil Field

Gazprom MOL, Gazprom to Set Up Gas Storage Company, Vilaggazdasag Says - Mol

Nyrt., Hungary’s largest oil refiner, will set up a joint venture with Russia’s state-run OAO Gazprom this year to build a natural-gas storage facility in Hungary, Vilaggazdasag reported, without citing anyone.

NIS appoints independent auditor - Serbian Oil Industry (NIS) management approved Monday the appointment of Ernst & Young company as special auditor of its 2008 accounts. The auditor should establish whether NIS last year had a profit of RSD 2.3bn as the previous leadership of the firm had claimed when it was a public company, or whether it had a loss of around RSD 8bn, as shown in the report by the KPMG auditor engaged by Russia's Gazprom, the new majority owner of NIS.

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Full Text Articles

Basic Political Developments

Halonen to Meet with Russian President Medvedev Tuesdayhttp://www.yle.fi/uutiset/news/2009/08/halonen_to_meet_with_russian_president_medvedev_tuesday_919513.html

published today 06:38 AM

President Tarja Halonen is expected to once again bring up the sticky issues of wood tariffs and the Baltic natural gas pipeline when she meets with Russian President Dmitri Medvedev today. European security policy is also believed to be high on the list of discussion topics.

Both presidents' offices are reticent to reveal their official agenda for the talks. Halonen's office released a statement saying they will discuss "current international issues", while Medvedev's office has refused to discuss the agenda.

Finland is concerned about tariffs that Russia has threatened to impose on wood exports that are the lifeblood for Finnish sawmills. So far, the worst of the tariffs have been postponed, but Finnish industry is desperate to see Russian give up the idea entirely.

Halonen will no doubt also bring up the feasibility and environmental impact of a massive Baltic pipeline that Russia wants to build to connect their natural gas reserves to eager customers in Europe.

But European security will likely be what the Russians want to emphasize most at the talks. Medvedev has called for the creation of a new European security policy which would include Russia as a major part of the plan. The overture was made without a lot of detail, but the message from the Kremlin is clear: Russia is unhappy about being left in the wake of NATO and EU-led security policies.

The two presidents are meeting in the Russian resort city of Sochi. This is their second meeting in a relatively short time, having met in Helsinki in April.

Finnish President to Russiahttp://www.barentsobserver.com/finnish-president-to-russia.4617609-16174.html

2009-08-11 Finnish President Tarja Halonen today meets with Russia’s Dmitry Medvedev in Sochi for bilateral talks “Timely international issues” are on the agenda, a press release from the Finnish President’s office reads. It is less than four months since the two presidents last time met. That was in Helsinki and then energy and security issues were high on the agenda.

The talks take place in one of Russia’s biggest construction sites, the place for the 2014 Olympic Winter Games.

http://www.prime-tass.com/news/show.asp?topicid=0&id=462065President Dmitry Medvedev, Prime Minister Vladimir Putin continue working visit to Sochi, until Aug 15

Medvedev blasts 'anti-Russian' Ukrainehttp://www.google.com/hostednews/afp/article/ALeqM5imxu3qSzRG2R__BnryMjSBF9ogLg

By Stuart Williams (AFP) – 1 hour ago

MOSCOW — President Dmitry Medvedev on Tuesday furiously attacked Ukrainian counterpart Viktor Yushchenko, saying his administration was anti-Russian and had caused the worst crisis in ties since the Soviet collapse.

Medvedev said that Moscow would not be sending a new ambassador to Kiev due to the policies of Yushchenko, who was ignoring "principles of friendship and partnership with Russia".

Yushchenko took power in the wake of the 2004 Orange Revolution that ousted the old pro-Moscow elite in Ukraine and set his country on a course towards membership of NATO and the European Union that irked Russia.

"I want to inform you that under the current anti-Russian course of the Ukrainian leadership, I have taken a decision to postpone sending a new ambassador to Kiev," Medvedev said in the letter to the Ukrainian president.

Ukraine is to hold crucial presidential elections on January 17 in which pro-Western forces are again expected to square up against figures more loyal to Russia.

"Russia hopes a new political leadership in Ukraine will be ready to create relations between our people that respond to the real hopes of our people," Medvedev added in the letter, excerpts of which were published by the Kremlin.

He said in a video blog also released by the Kremlin that "the strain in our relations between our two countries has hit unprecedented levels".

Russia had been due to send a new envoy to Ukraine after the departure of its last ambassador, former Russian prime minister Viktor Chernomyrdin.

Medvedev fired off a litany of accusations at the Ukrainian leadership over Moscow's war last year with Georgia, historical disputes, language, the economy and religion.

He accused Ukraine of still seeking to ship arms to pro-Western Georgia and said its leadership "shares responsibility" with Georgia for the "crimes" committed in the war.

He said the Yushchenko administration was also creating complications for the work of Russia's Black Sea fleet which is based on the Crimean peninsula in southern Ukraine.

And he accused Ukraine of interfering in the Russian Orthodox Church by creating unfavourable conditions for the visit of the Russian Orthodox Patriarch Kirill to the country earlier this month.

Yushchenko is expected to stand in January's presidential elections but is given little chance as his poll ratings are at a single-digit all-time low.

Leading the polls is the head of the Regions Party Viktor Yanukovich, who is likely to be Moscow's preferred candidate amd draws his strength from the mainly Russian-speaking east of the country.

In second place is Prime Minister Yulia Tymoshenko, a former Orange Revolution ally of Yushchenko but who has now fallen out with the president and takes a more careful line on relations with Russia.

Ties between Russia and Ukraine have nose-dived over the last months, most notably during a gas crisis early this year when a row over non-payment of debts by Kiev prompted Russia to cut off gas to western Europe.

Medvedev delays arrival of new RF ambassador to Ukrainehttp://www.itar-tass.com/eng/level2.html?NewsID=14222525&PageNum=0

MOSCOW, August 11 (Itar-Tass) - Russian President Dmitry Medvedev has sent a message to Ukrainian President Viktor Yushchenko in which he informed him that “in the conditions of the anti-Russian course of the Ukrainian leadership I have made a decision to delay the arrival in Ukraine of our new ambassador.” “The arrival timeframe will be specified later with taking into account the real development of Russian-Ukrainian relations,” the Russian head of state specified, the Kremlin press service reported.

“For Russia the Ukrainians at all times have been and remain not simply neighbours, but a brotherly nation towards which we will always have the warmest feelings and with which we have common history, culture and religion, are united by the close economic cooperation, strong kinship and human relations,” the RF president stressed.

He said that he is certain that the “leadership of Russia and Ukraine must cherish this good neighbourliness, this wealth that is also the common competitive advantage in the globalising world.” “The task of responsible state figures is not to yield to the temptation to put our nations at odds with each other for the sake of anyone’s geopolitical projects or political career, but to preserve in every possible way the friendship of Ukrainians and Russians, to strengthen the foundation of cooperation to the mutual advantage and in the interests of prosperity of our countries,” Medvedev noted. “It is inadmissible to put the many centuries-old relations to severe tests for the sake of the immediate conjuncture,

instilling into the younger generations the idea of mutual enmity, playing on nationalistic complexes,” he stated.

Russia hopes that the “new political leadership of Ukraine will be ready to build between our countries such relations that will be indeed correspond to the true aspirations of our nations and the interests of strengthening European security,” the Russian president emphasised.

UPDATE 2-Russia says Ukraine putting gas to Europe at riskhttp://in.reuters.com/article/oilRpt/idINLB59146620090811

Tue Aug 11, 2009 11:08am IST

* Medvedev says Ukraine putting gas flows to Europe at risk

* Russia says postponing sending new ambassador to Kiev

(Adds details, new quotes)

By Oleg Shchedrov

MOSCOW, Aug 11 (Reuters) - Russian President Dmitry Medvedev accused Ukraine on Tuesday of seeking to disrupt economic ties with Russia and putting at risk the safety of gas supplies to Europe.

In an open letter to Ukrainian President Viktor Yushchenko, Medvedev said he would postpone sending a new ambassador to Kiev and that Moscow hoped a new Ukrainian leader -- due to be elected in January -- could improve bilateral ties.

Disputes over Russian gas supplies to Ukraine have led to disruptions in supplies to Europe twice in the past two years and caused problems in Russia's relations with the West.

"We have an impression that Kiev consistently seeks to break traditional economic ties with Russia, firstly in the energy sector," Medvedev said in the letter posted on his website (www.kremlin.ru).

"As a result, the stable use by our countries of a factually united gas pipeline network serving the energy security of Russia, Ukraine and many European states has been put at risk," said Medvedev.

"Russia hopes the new Ukrainian leadership will be ready to build ties between our countries, ties which will indeed answer the true hopes of our peoples in the interests of strengthening European security," he said.

Russia has also been at odds with Kiev, whose leadership is seeking to join NATO and the European Union, over of other issues ranging from the future of the Russian Black Sea naval base in Crimea to the future of the Russian language in Ukraine.

Moscow has been alarmed by Ukraine's deal with the EU earlier this year to reconstruct its gas pipeline network, seen by Russia as an infrigement of its accord with Kiev reached after the last gas supply dispute in January.

"The supreme Ukrainian leadership is negotiating the supplies of gas -- the Russian gas -- with the European Union, bypassing Russia, and signs a document contradicting the Russian-Ukrainian deals in January," Medvedev said in a separate posting on his website.

"I would want to inform you that taking into account the anti-Russia course of the Ukrainian leadership, I have decided to postpone sending our new ambassador to Ukraine," he said.

'Kiev risks Europe's gas supply'http://www.upstreamonline.com/live/article185477.ece

News wires

Russian President Dmitry Medvedev today accused Ukraine of seeking to disrupt economic ties with Russia and putting at risk the safety of gas supplies to Europe.

In an open letter to Ukrainian President Viktor Yushchenko, Medvedev said he would postpone sending a new ambassador to Kiev and that Moscow hoped a new Ukrainian leader - due to be elected in January - could improve bilateral ties, a Reuters report said.

"We have an impression that Kiev consistently seeks to break traditional economic ties with Russia, firstly in the energy sector," Medvedev said in the letter posted on his website.

"As a result, the stable use by our countries of a factually united gas pipeline network serving the energy security of Russia, Ukraine and many European states has been put at risk," said Medvedev.

Disputes over Russian gas supplies to Ukraine have led to disruptions in supplies to Europe twice in the past two years and caused problems in Russia's relations with the West.

Russia has also been at odds with Kiev, whose leadership is seeking to join NATO and the European Union, over of other issues ranging from the future of the Russian Black Sea naval base in Crimea to the future of the Russian language in Ukraine.

Moscow has been alarmed by Ukraine's deal with the EU earlier this year to reconstruct its gas pipeline network, seen by Russia as an infrigement of its accord with Kiev reached after the last gas supply dispute in January.

Tuesday, 11 August, 2009, 05:15 GMT | last updated: Tuesday, 11 August, 2009, 05:57 GMT

“No new Russian ambassador to be sent to Ukraine” – Medvedevhttp://www.russiatoday.com/Politics/2009-08-11/medvedev-ukraine-relations-ambassador.html/print

11 August, 2009, 09:02

President Dmitry Medvedev reveals the reasons behind refraining from sending the new Russian ambassador to Ukraine just yet, as well as the roots of strain in Russia-Ukraine relations in his new video blog message.

"A few days ago, I sent a letter to the President of Ukraine. It was not an ordinary document, I should say, as it contained a number of complex and unflattering characteristics of the actions by the top political leadership of Ukraine. In my address today, I would like to explain the reasons behind my step.

There has been public concern in both Ukraine and Russia of late over the state of our bilateral relations. Ukrainian politicians themselves have admitted that relations are at an extremely low point today, and it is hard not to agree. The strain in relations between our countries has indeed hit unprecedented levels.

I have on many occasions stated that Russia seeks to be a predictable, strong and comfortable partner for its neighbors, all the more so for a country with which we share common historical and cultural roots. We are more than just neighbors; our ties are those of brothers.

Nikolay Gogol, the great writer and son of both Ukrainian and Russian peoples, said, “There are no bonds more sacred than the bonds of brotherhood.” As we celebrate the 200th anniversary of Gogol’s birth, we remember these words once again. These celebrations are yet another vivid illustration of our peoples’ spiritual closeness.

Set against this background, the difficult – to say the least – relations our countries have been experiencing make an even stronger contrast. Let’s take a look at what is actually happening.

The leadership in Kiev took an openly anti-Russian stand following the military attack launched by the Saakashvili regime against South Ossetia. Ukrainian weapons were used to kill civilians and Russian peacekeepers. Russia continues to experience problems caused by a policy aimed at obstructing the operations of its Black Sea Fleet, and this on a daily basis and in violation of the basic agreements between our countries. Sadly, the campaign continues to oust the Russian language from the Ukrainian media, its

education, culture and science. The Ukrainian leadership’s outwardly smooth-flowing rhetoric fits ill with the overt distortion of complex and difficult episodes in our common history, the tragic events of the great famine in the Soviet Union, and an interpretation of the Great Patriotic War as some kind of confrontation between two totalitarian systems.

Our economic relations are in a somewhat better situation and are developing, but we have not yet succeeded in tapping their full potential. Again, the problem is that Russian companies frequently face open resistance from the Ukrainian authorities. Bypassing Russia, Ukraine’s political leaders do deals with the European Union on supplying gas – gas from Russia – and have signed a document that completely contradicts the Russian-Ukrainian agreements reached in January this year.

But no matter what complexes or illusions motivate the actions of individual Ukrainian officials, we will always value our fraternal ties with the Ukrainian people and will strive to strengthen our humanitarian cooperation. It is with this aim in mind that we plan to open branches of the Russian Science and Culture Centre in several Ukrainian cities and will do all we can to support Ukrainians living in our country in their efforts to develop their national culture.

Patriarch Kirill’s recent pastoral visit to Ukraine was also an event of great significance. I had a meeting with the Patriarch following the visit, and he shared his impressions and said many cordial words. We both are of one and the same opinion that the two fraternal peoples may not be separated as they share common historical and spiritual heritage.

I am confident that our relations with Ukraine’s people will overcome any problems. They cannot be destroyed by politicians’ selfish interests, fickle changes in the global situation, or individual leaders’ mistakes, and all the more so, cannot be undone by empty words and pseudo-historical research.

I am certain that a new era will begin. Nevertheless, in the current situation, I have made a decision to refrain from sending the Russian ambassador to Ukraine. The new ambassador will commence his duties at a later stage, and naming the exact date for this will depend on positive dynamics in our bilateral relations.

There can be no doubt that the multifaceted ties between Russia and Ukraine will resume on a fundamentally different level – that of strategic partnership – and this moment will not be long in coming. I hope that the new leadership of Ukraine will be ready for the breakthrough. We will in turn make our best efforts for this to happen."

No hope for normalizing relations with Russia under current leadershiphttp://www.kyivpost.com/nation/46790

Today, 11:31 | Interfax-Ukraine

Party of Regions leader Viktor Yanukovych said that there is no hope today for an improvement in the Ukrainian-Russian relations.

Yanukovych was commenting on Russian President Dmitry Medvedev's open letter to Ukrainian President Viktor Yushchenko.

"Unfortunately, under the current leadership, there is practically no hope for a normalization or improvement in relations with Russia," the party's press service quoted Yanukovych as saying on Tuesday.

If the Party of Regions comes to power, the first thing it will do is normalize mutually-advantageous relations with Russia, he said.

"The first thing we will do after we come to power is revive normal, good-neighborly, equitable and mutually beneficial relations with our strategic partner Russia - relations that will open prospects for both states," Yanukovych said.

NATO's secretary-general, Russia's envoy to discuss improving tieshttp://en.rian.ru/world/20090811/155780569.html

BRUSSELS, August 11 (RIA Novosti) - Russia's NATO envoy will hold his first meeting on Tuesday with the alliance's newly appointed secretary-general to discuss steps to normalize Russia-NATO relations.

Dmitry Rogozin will be received by Anders Fogh Rasmussen, the former Danish premier, who replaced his Dutch predecessor Jaap de Hoop Scheffer on August 1 as NATO's 12th secretary-general.

At his first news conference as NATO chief, Rasmussen said he hoped for a "true strategic partnership" with Russia and called for active practical cooperation with Moscow on Afghanistan, international terrorism, piracy and nonproliferation of weapons of mass destruction.

Rogozin said last week that he hoped "to see a predictable partner in the new NATO secretary general."

Russia-NATO ties have been damaged in recent years by the alliance's eastwards expansion, U.S. plans for a missile shield in Central Europe, and last year's war between Russia and Georgia over South Ossetia.

Vladimir Putin to visit Poland, but only for a few hours

http://www.wbj.pl/article-46369-vladimir-putin-to-visit-poland-but-only-for-a-few-hours.html?typ=wbj

10th August 2009

The Russian prime minister will travel to Gdańsk to commemorate the 70th anniversary of WWII

Russian Prime Minister Vladimir Putin will visit Poland on September 1, joining other world leaders in commemorating the 70th anniversary of the outbreak of WWII in 1939.

“Vladimir Putin will take part in the 70th anniversary celebrations of the outbreak of WWII,” the Russian Embassy in Warsaw announced. The Russian PM will visit the northern city of Gdańsk, but will only spend a few hours there.

"For us, this visit is of particular importance since it is the first time [a Russian prime minister] has visited Poland in many years. This is proof that our policy of thawing relations [between the two countries] is having an effect," Sławomir Nowak, the Chief of the Prime Minister's Political Cabinet, told TVN24.

The Polish prime minister will avoid sensitive issues such as the Soviet invasion of Poland on September 17, 1939. "There are a lot of other topics [for discussion],” Mr Nowak explained, “such as low border traffic [between the two countries], and what we have finally succeeded after so many years, namely the restoration of traffic in the Strait of Baltiysk, as well as a new gas contract.” (RG)

Source: Dziennik

AUGUST 10, 2009, 4:10 P.M. ET

Coveted Russian Market Becomes Battleground In GM-Opel Talks http://online.wsj.com/article/BT-CO-20090810-714846.html

By Sharon Terlep Of DOW JONES NEWSWIRES

DETROIT (Dow Jones)--Haggling over the wide-open Russian automotive market has emerged as one of the central impediments to resolving a bidding war over General Motors Co.'s Opel European operations.

Though it comprises fewer than 5% of the world's automobile sales, Russia's growth and increasing wealth have made it a key battleground in the global auto industry.

GM fears a deal with Magna International Inc. (MGA), the German government's favored suitor, would essentially hand over advanced engine and transmission technology to Russia and stymie the auto maker's ability to compete there down the road.

The difference is a critical one, since GM is relying on Germany to keep Opel afloat and provide the bulk of funding to restructure the struggling unit.

But GM won't likely budge easily. The auto maker isn't keen on cutting a deal that could compromise its chances in one of the few significant markets in which the company is growing.

Russia is proving one of few bright spots as GM's sales sink around the globe amid a worldwide sales slump and restructuring at home.

GM's global market share in the first half of 2009 is down nearly two points from 2007, but its share of the Russian market is up just over a point. GM has either lost or barely maintained its share in most the world's markets, including a four-point drop in the U.S.

"These parts of the world are tremendously important, and Russian investors are asking for things that would potentially compromise technologies and plans for the future," said HIS Global Insight analyst John Wolkonowicz. "Why would you want to create a competitor who has access to all this?"

If GM cuts a deal with Magna, the parts maker wouldn't be the only one with access to GM's brain power.

Magna has teamed up with Russian savings bank Sberbank (SBER.RS) and Russian carmaker GAZ (GAZA.RS). The team would like to use Opel to increase its presence in Russia, a move that could ultimately conflict with GM's plans to expand the Chevrolet brand there. More worrisome to GM is the idea that valuable technology could end up in competitors' hands.

GM's Group Vice President John Smith, the company's lead Opel negotiator, summed up the concerns in a recent Internet posting. "This transaction should not become a pipeline, shipping valuable intellectual property to destinations unknown," Smith said, referencing complications with a Magna deal.

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@dowjones.com

Russian Proton-M carrier rocket set to orbit Chinese satellitehttp://en.rian.ru/russia/20090811/155779131.html

MOSCOW, August 11 (RIA Novosti) - A Proton-M rocket with a Chinese telecommunications satellite will be launched on Tuesday from the Baikonur space center in Kazakhstan, the Russian Federal Space Agency said.

Russian-U.S. joint venture International Launch Services (ILS) and Hong Kong-based Asia Satellite Telecommunications Co. Ltd. (AsiaSat) signed a contract in February for the launch of the AsiaSat 5 satellite.

"The launch is scheduled for 23:47 Moscow time [19:47 GMT]," the agency said.

ILS, owned by the Khrunichev Center, RSC Energia, and U.S. firm Space Transport Inc., provides spacecraft launch services on board Proton-M heavy carrier rockets.

The launch of the AsiaSat 5 satellite will be the sixth involving a Proton-M carrier rocket in 2009 and the 347th Proton launch overall.

AsiaSat 5 will carry 26 C-band and 14 Ku-band transponders, and has a service life of 15 years, replacing Asiasat 2 at the orbital location of 100.5 degrees east.

The satellite will offer an enhanced pan-Asian C-band footprint that covers more than 53 countries spanning from Russia to New Zealand and from Japan to the Middle East and parts of Africa.

N-power team to visit Russia in Oct: officialhttp://bdnews24.com/details.php?id=91948&cid=4

Mon, Aug 10th, 2009 11:06 pm BdST Maruf Mallick bdnews24.com energy correspondent

Dhaka, August 10 (bdnews24.com)—A government delegation is awaiting the final nod from the prime minister's office to visit a Russian nuclear power plant, an official of the science ministry told bdnews24.com on Monday.

"Russia has invited a Bangladeshi delegation to visit their nuclear power plants," said the official, who asked not to be named but was closely involved with the negotiations.

A nine-member delegation is slated to visit in October, he said.

He said a proposal had been sent to the prime minister for approval regarding the visit, which is likely to be headed by state minister for science and ICT Yafes Osman.

Bangladesh and Russian signed memorandum of understanding (MoU) in Dhaka in May this year, on the peaceful use of nuclear power, which was seen as a first-step towards construction of a Bangladeshi nuclear power plant.

Chairman of the Bangladesh Atomic Energy Commission, Dr Mosharaf Hossain, and deputy-director general of the Russian State Atomic Energy Corporation (Rosatom), NN Spasskiy, signed the deal.

The MOU covers the design, licensing, construction, operation and maintenance of nuclear power and research reactors.

It also provided guidelines for joint initiatives in exploration and extraction of uranium

deposits and radiation waste management.

Russia had not specified any financial terms as yet, but they are interested in providing loans rather than grants, which are likely be on favourable terms, said the ministry official.

"The Economic Relation Division will settle the financial terms and conditions once the MoU is signed," he said.

Bangladesh also has similar MoUs with the USA and China.

Bangladesh's one and only initiative to install a nuclear power plant in Rooppur, Pabna, has remained stalled since 1961.

Russia built 10 nuclear power plants last year, and in total has constructed 65 plants in Iran, India, China, Armenia, Ukraine, Hungary, Slovakia, the Czech Republic, Finland, Bulgaria and Germany.

Russia is currently constructing 11 power plants overseas.

Currently, 439 nuclear power plants around the globe are generating 16 percent of the world's electricity.

China and South Korea have also approached Bangladesh to set up nuclear power plants.

bdnews24.com/mrf/am/2000h

Russia, Belarus sign off on nuclear power station draft agreementhttp://www.businessneweurope.eu/dispatch_text9501

bneAugust 11, 2009

The governments of Russia and Belarus signed off on a draft agreement that would see Russia build a the first nuclear power station in Belarus, reports Interfax.

General contractor Atomstroyexport represented the Russian side and the Kremlin has been pushing the sale of nuclear power technology as one of Russia's strategic exports.

The next stage will be to carry out a feasibility study.

French-German Areva and American-Japanese Westinghouse-Toshiba have also been competing for the contract.

The station will have two energy units, each with the capacity of 1,200 megawatts, in the Belarus' Grodno region. The first unit will be ready in 2016, and the second on in 2018.

The key issue of financing the construction has yet to be settled. Minsk has asked Moscow to lend it the estimated $9bn needed for the work as part of the deal, but no decision has been made yet.

Minister: Nuclear plant tender to be finalized in Septemberhttp://www.todayszaman.com/tz-web/news-183627-105-minister-nuclear-plant-tender-to-be-finalized-in-september.html

The government plans to conclude a tender for the construction of Turkey's first nuclear energy power plant in September, Energy and Natural Resources Minister Taner Yıldız said on Monday. "We have to finish an important part of the tender process in August, and we must conclude it next month," Yıldız told reporters in Ankara.

"This project will be put into effect if we agree on a reasonable price," the minister said. Noting that Turkey could take a stake of up to 25 percent in the project if a reasonable price is set, he recalled that Turkey has offered guarantees to buy electricity for 15 years. Yıldız added that the plant would remain in operation for almost 60 years. "That's why we have to scrutinize the tender process very carefully," he said.

A joint venture composed of AtomStroyExport -- which has constructed nuclear energy power plants in Russia for Rosatom -- Inter Rao UES JSC and the Ciner Group's Park Teknik was the sole bidder in a tender held in September 2008 for the construction and operation of the nuclear plant for 15 years.

The government asked the consortium to lower the price it would charge for electricity from the nuclear plant. The consortium submitted a new price of 15.35 cents per kilowatt hour (kWh) in early February -- much lower than its unexpectedly high bid of 21.16 cents on Jan. 20 -- in an attempt to prevent its bid from collapsing; however, state officials say the figure is still high. Turkish and Russian officials discussed the issue of a price cut last week during Russian Prime Minister Vladimir Putin's visit to Ankara, Yıldız also said.

11 August 2009, TuesdayTODAY'S ZAMAN  İSTANBUL

Russia on Pace to Meet Chemical Disarmament Deadline, General Sayshttp://www.globalsecuritynewswire.org/gsn/nw_20090810_1959.php

Monday, Aug. 10, 2009

Russia has reported destroying 37 percent of its arsenal of chemical warfare agents, Interfax reported last week (see GSN, July 30).

The government said Friday it is on schedule to destroy the entire stockpile by 2012, as promised.

"We will meet all deadlines," said Gen. Nikolai Abroskin, head of the Russian Federal Special Purpose Construction Agency. "There will be no delays in the implementation of the international convention. Today, the state authorities regard the federal program 'Destruction of Chemical Weapons Stockpiles in the Russian Federation' as one of the most successful programs in the country."

Under the international Chemical Weapons Convention, Russia must eliminate all chemical weapons by April 2012. Observers have expressed skepticism of Moscow's repeated affirmations of its ability to keep to that schedule.

Russia has already disposed of 15,000 metric tons of its 40,000-metric-ton arsenal of banned materials, according to government reports (Interfax, Aug. 7).

Secret cargo aboard missing ship?http://www.russiatoday.com/Top_News/2009-08-11/arctic-sea-cargo-missing.html/print

11 August, 2009, 10:25

The “Arctic Sea” ship which disappeared in the Atlantic was carrying a cargo of timber worth nearly $2 MLN and, perhaps, a “secret” cargo says Mikhail Voytenko, editor-in-chief of the Russian maritime bulletin Sovfrakht.

“It has been unveiled that the cargo belongs to the biggest European paper manufacturer, Stora Enso Oyj,” Voytenko told Interfax.

However, the company maintains that they were not the only ones whose cargo the “Arctic Sea” was carrying. Voytenko stated that a cargo of timber was unlikely to have been the cause for the ship’s disappearance.

“It was either a secret or a counterfeited shipment,” he said.

The company whose cargo the ship was officially carrying also confirmed that something else might have been at stake.

“We are not the only company whose cargo was on board,” a spokesman for Stora Enso Oyj told Interfax.

He also noted that all of their timber was insured, so the company will not suffer a loss as a result of the incident. When asked whether he knew whether other companies had their cargo aboard the “Arctic Sea,” the spokesman said that such information was unavailable.

The last signals from the ship were received on July 30. Specialists from France and the UK have stated that the last position of the ship was in the waters of the Biscay Gulf near

France, and not Portugal as previously stated.

“The entire staff of my company is working very hard to establish communication with the ship. Unfortunately, there is no information so far and, much to my regret, I cannot comment on the situation,” said Viktor Matveev, CEO for Solchart Management – the company which owns the ship.

In his Sovfrakht bulletin, Voytenko stated that it would be very simple for a specialist to deactivate the vessel’s short-range tracking system. If this was done, the ship would purposefully disappear from navigation monitors.

As Voytenko reports, families of the disappeared sailors said that the investigative services who interrogated them were very vague in their descriptions of the incident.

Meanwhile, the wives and children of the 15 missing Russian sailors struggle to piece together what they can.

“We are now only interested in one thing: where the ship and the crew are. We have been told that the crew are safe and sound, and the ship is being searched for,” one of the sailors’ relatives said.

Aleksandr Doshenya is an experienced sailor and the father of one of the missing seaman.

“A vessel carrying a cargo of timber cannot sink. I transported timber for many years, and I know for sure. Even if the ship did sink, the timber would be floating all over the sea,” he said.

An investigation is underway, however, and a group of Russian vessels which was headed for military training in the Baltic Sea is now participating in a search operation.

This is not the first incident with the “Arctic Sea” in last few weeks. On July 24, unknown people presenting themselves as police officers stopped the vessel in the Swedish waters of the Baltic Sea.

According to Voytenko’s sources, they then proceeded to tie up the crew and search the ship for 12 hours.

But what’s strange is that those men apparently left the ship peacefully – and without taking anything.

Journalist Natalya Gracheva was the last to interview the crew following their hijacking.

“A number of mask-wearing attackers burst in from the bridge wing and pinned down the ward service, after which they called the skipper and made him lie down on the deck. Later other crew members were tied. The attackers used sufficiently rough methods. The skipper received several blows with the butt of an automatic rifle. Incidentally, the

attackers were very well armed, using hand to hand combat and quite familiar with all of the ship’s technology,” Natalya said.

Thai court rejects US request to extradite Russianhttp://www.google.com/hostednews/ap/article/ALeqM5haRr15ezQeo6CBkBtvXrXaYZnOtgD9A0IQLG0

By MICHAEL CASEY (AP) – 19 minutes ago

BANGKOK — A Thai court has rejected a U.S. request to extradite a Russian arms dealer dubbed the "Merchant of Death" to face terrorism charges.

Tuesday's ruling marks a setback for the United States, which used an elaborate scheme to lure Viktor Bout to Bangkok in March 2008.

Bout was arrested after U.S. agents posed as arms buyers for the Revolutionary Armed Forces of Colombia, or FARC, which Washington classifies as a terrorist organization.

The judge said the U.S. has 72 hours to indicate if an appeal will be filed, and, if not, Bout will be set free.

If an appeal is filed, Bout will be held pending further proceedings.

Bout has been linked to some of the world's most notorious conflicts. He has repeatedly denied any wrongdoing.

Thai court refuses to extradite "Merchant of Death" to U.S.http://www.reuters.com/article/worldNews/idUSTRE57A1NF20090811

Tue Aug 11, 2009 4:38am EDT

BANGKOK (Reuters) - A Thai court on Tuesday refused to extradite alleged Russian arms dealer Viktor Bout to the United States to face trial on charges of supplying weapons to Colombian rebels.

The United States wanted to try Bout, dubbed the "Merchant of Death," for conspiracy to sell millions of dollars of weapons to rebels from the Revolutionary Armed Forces of Colombia (FARC), which it said could be used to kill Americans.

"The U.S. charges are not applicable under Thai law. This is a political case. The FARC is fighting for a political cause and is not a criminal gang. Thailand does not recognize the FARC as a terrorist group," said the judge delivering the verdict at Bangkok's Criminal Court.

Bout was arrested in a Thai-U.S. sting operation at a Bangkok hotel in March 2008 after arriving from Moscow.

The Unites States has 72 hours in which to appeal against the ruling, during which time Bout will remain in detention.

(Reporting by Kittipong Soonprasert; Writing by Martin Petty; Editing by Alan Raybould and Sanjeev Miglani)

Thai court has ruled against extraditing Bout to the UShttp://www.russiatoday.com/Top_News/2009-08-11/court-verdict-bout-weapons.html/print

11 August, 2009, 12:22

According to latest reports, a Thai court has ruled in favor of Russian citizen Victor Bout. Thus, Bout will not be extradited to the US at this point.

The United States believe Bout is the biggest gun runner in modern history. He is accused of supplying weapons to just about every military conflict in the world since the 1980s, from Liberia to Iraq.

With accusations of this scale, Bout would face a life in prison if tried in the US.

Russian FSB services helped Hizbullah bust spy ring – report

http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=2&article_id=105148

Lebanese Group has ‘amassed quantities of undisclosed data’

Daily Star staffTuesday, August 11, 2009

BEIRUT: Western intelligence sources in the Middle East have disclosed to DEBKAfile that a special unit of the Russian Federal Security Service (FSB), commissioned by Hizbullah’s special security apparatus earlier this year, was responsible for the massive discovery of alleged Israel spy rings in Lebanon in recent months with the help of “super-efficient” detection systems.

DEBKAfile is an Israeli, Occupied Jerusalem-based English-language open source military intelligence website with commentary and analyses on terrorism, intelligence, security, and military and political affairs in the Middle East.

The sources told DEBKAfile last week that the FSB and Hizbullah have “amassed quantities of undisclosed data” on Israel’s clandestine operations in Lebanon and “are holding it in reserve in order to leak spectacular discoveries as and when it suits their purpose.”

“This disclosure, if borne out, would indicate that the Russian agency, which specializes in counterespionage, is engaged for the first time in anti-Israel activity in the service of an Arab terrorist organization,” DEBKAfile said.

An Israeli security source described this turn of events extremely grave, Debkafile reported. It also cast an ominous slant on Moscow’s deepening strategic involvement in Syria.

“It was generally assumed until now that new electronic devices supplied by France to the Lebanese Army were instrumental in uncovering the suspected Israeli spy rings,” the DEBKAfile report said.

“It now transpires that the Lebanese Army was not directly involved; it only detained the suspects handed over by the Shiite Hizbullah,” it added.

Those same sources disclosed to the Israeli news website that FSB agents, “by blanketing every corner of Lebanon with their sophisticated surveillance systems, were able to detect the spy rings one by one and additionally hack into Israeli intelligence data bases.”

The Russians dated Israel’s massive clandestine infiltration of Lebanon to shortly after the summer 2006 war.

“Hizbullah sustained heavy casualties and, fearing an Israeli surprise attack at that point, began conscripting thousands of young Shiites as fighters [haphazardly], without checking their backgrounds,” the sources told DEBKAfile.

“In their haste, they also rounded up Syrian and Egyptian migrant laborers in Lebanon,” they added.

The sources explained that Israel “used the opportunity to recruit large numbers of agents in both these groups, especially among the conscripts sent to Revolutionary Guards camps in Iran and Syrian military facilities for training.”

The Lebanese judiciary has so far charged at least 20 people, some of them top-ranking military and police officers with espionage. Despite the ceasefire between Lebanon and its southern neighbor, the two countries are technically still at warl. Treason in Lebanon is punishable by death.

A growing list of double agents has been exposed over the last few years as part of a continuing operation, code-named “Surprise at Dawn,” which began in June 2006 before the outbreak of the 34-day 2006 war with Israel.

In July, the UN Security Council warned that the existence of a large Israeli-run espionage network in Lebanon could threaten a fragile peace established between the two countries following the end of the 2006 Israel-Lebanon war.

Israel has refused to comment on the spy allegations. But it has been reported in the Israeli media that without the intelligence provided by the Lebanese network, the Israeli Air Force would not have been able to knock out Hizbullah’s medium-range missile launchers with such a high degree of accuracy during the 2006 war.

Many of Hizbullah’s men were also assassinated on the basis of information provided by the spies.

The campaign of assassinations culminated in the killing, supposedly by Mossad agents, of top Hizbullah military commander Imad Mughniyeh who was killed in a car bombing in Damascus last year.

The operatives were allegedly given orders to spy on a number of Palestinian resistance organizations as well as Hizbullah. – The Daily Star

Two workers of non-gvnmtl organization found dead in Grozny

http://www.itar-tass.com/eng/level2.html?NewsID=14222786

GROZNY, August 11 (Itar-Tass) -- Two workers of a non-governmental organization found dead in Grozny. As ITAR-TASS learnt at the Investigation Department of the Investigation Committee at the Russian Prosecutor’s Office (SKP) on Tuesday, “bodies of Alek Dzhabrailov and Ryana Saidulayeva with many wounds were found on the territory of the village of Chernorechye at 04.00 Moscow time on Tuesday.” “Their bodies were in the boot of the VAZ-2107 car belonging to Dzhabrailov. The car was standing near house # 6 in Mansurov Street ten meters from the entrance to the Republican Rehabilitation Centre,” a SKP representative specified.

According to preliminary data, the murdered headed the non-governmental organizaion “Let’s Save the Generation.”

“Earlier, ombudswoman Svetlana Gannushkina informed the law enforcement bodies in the Leninsky district of Grozny about their disappearance. On the eve, a search for them began at about 22.00 Moscow,” the SKP representative said.

Criminal proceedings were instituted. Investigation is underway.

Humanitarian group leader, husband found killed in Chechnyahttp://en.rian.ru/russia/20090811/155779713.html

GROZNY, August 11 (RIA Novosti) - The bodies of the head of a humanitarian organization and her husband were found in Grozny early on Tuesday, a spokesman for Chechen investigators said.

Zarema Sadulayeva of Let's Save the Generation which works with Chechen children injured in the Chechnya war and their parents, and her husband, Alik Dzhabrailov, were kidnapped on Monday.

Their bodies, with numerous gunshot wounds, were found in the trunk of a car parked at the entrance to a local rehabilitation center.

Chechen investigators have already launched criminal proceedings. A team of leading experts from the Investigative Committee of the Russian Prosecutor General's Office has also been summoned.

The committee's head, Alexander Bastrykin, currently on a visit to the North Caucasus, has altered his itinerary to hear the first results of a probe later on Tuesday.

Another top member of Sadulayeva's group, Murad Muradov, was abducted in 2005. His body was only handed over to his family a year later. The police said Muradov was a militant and had been killed in a special operation.

Chechen nongovernmental organization Let's Save the Generation works for the psychological and physical rehabilitation of war young victims. It has been a partner of UNICEF over the past few years, playing a coordinating role for UN organizations providing assistance to victims of mine blasts in the North Caucasus.

Sadulayeva's death follows the murder of Chechen rights activist Natalya Estemirova in mid-July, which created outrage among Russian rights campaigners and consternation around the world.

Charity head found dead in Chechnya -- report http://www.alertnet.org/thenews/newsdesk/LB587448.htm

11 Aug 2009 05:16:03 GMT Source: ReutersMOSCOW, Aug 11 (Reuters) - The head of a charity and her husband, both kidnapped by a group of armed men in Russia's restive region of Chechnya, have been found dead, Interfax news agency reported on Tuesday.On Monday, armed men raided the office of the Save the Generations charity and seized Zarema Sadulayeva and her husband."Their bodies have been found in the Chernorechye suburb of (the Chechen capital) Grozny," Interfax quoted a senior member of the Memorial rights group, Alexander Cherkasov, as saying. The report could not be immediately verified independently. (Writing by Oleg Shchedrov)

Memorial: kidnapped Chechen activist found dead

http://www.google.com/hostednews/ap/article/ALeqM5glq6Q1GrMjMwi8kl8ThPkmZ-H91AD9A0FVE00

(AP) – 12 minutes ago

MOSCOW — An official of the Russian human rights group Memorial says a Chechen aid worker and her husband have been found dead, a day after they were kidnapped.

Memorial's Alexander Cherkasov told The Associated Press on Tuesday that the bodies of Zarema Sadulayeva and her husband were found near the Chechen capital Grozny. He did not have immediate information on the cause of death. Sadulayeva's group works with helping children in the war-battered Russian republic.

The abductions followed last month's kidnapping and killing of another prominent rights activist, Nataliya Estemirova. Rights activists blame the forces of the Chechen president for abductions, killings and torture.

Human rights activist abducted in Chechnya: activistshttp://www.google.com/hostednews/afp/article/ALeqM5jZkfee3LeioOR1w6TfziRLtUg8jA

(AFP) – 12 hours ago

GROZNY, Russia — Armed men abducted the leader of a human rights group and her husband in the troubled Russian republic of Chechnya, leading members of two other groups said.

"Today, towards two o'clock, unidentified armed men got into the offices of Let's Save the Generation and abducted its leader, Zarema Sadulayeva, and her husband," said Alexander Cherkasov of Memorial, the Interfax news agency and Moscow Echo Radio reported on Monday.

"They have taken them away to an unknown destination. They came back into the NGO's office and took the mobile telephone and the car of the husband," he added.

They had no word on where they were, he added.

One of Memorial's own activists, Natalya Estemirova, was abducted and murdered in July, sparking an international outcry.

Another senior human rights worker and a former colleague of Sadulayeva told AFP earlier: "A gang came into her office around midday while she was working and then forced her into a car.

"There has been no news of her since," the colleague said, asking not to be named.

Cherkasov said the interior ministry and the Russian federal security service, the FSB, have been informed of the abductions.

Sadulayeva's husband, Alik Djibralov, had been jailed for four years for links to illegal armed groups, said Cherkasov. He had married Sadulayeva two months after leaving prison, he added.

But a police source quoted by Interfax said they were sceptical about the kidnapping, as "according to witnesses, Sadulayeva and her husband got into the car voluntarily and under no physical coercion."

Let's Save the Generation works with young people in Chechnya who have been marginalised, helping them get back on their feet to prevent them joining any of the armed groups in the unstable region.

The group's former chief, Murad Muradov, and his staff member Ismail Kadayev were abducted by members of an undetermined security unit during a special operation in Grozny in April 2005. Their bodies were returned to their relatives in 2006.

"I thought that after Estemirova's murder there would be a pause -- but now it is obvious that violence against rights activists has become a standard practice," the head of Moscow Helsinki Group, Lyudmila Alexeyeva, was quoted as saying by Interfax.

The body of Memorial's award-winning activist Estemirova was found shortly after she was seen being bundled into a car outside her home in the Chechen capital Grozny on July 15.

In the wake of her killing, Memorial chairman Oleg Orlov accused Chechnya's pro-Kremlin leader Ramzan Kadyrov of being responsible for the murder, irrespective of who ordered the crime.

He refuted the allegation on Monday, saying in an interview with Radio Svoboda, the Russian service of Radio Free Europe: "Why should Kadyrov kill a woman who was useful to no one?

"She was devoid of honour, merit and conscience," he added.

Kadyrov is praised by the Kremlin for restoring some stability to the Caucasus region but is detested by human rights activists who accuse him of letting his personal militia carry out kidnappings and torture.

Cherkasov said that Kadyrov's comments showed that "he does not believe it is necessary to guarantee the security of rights activists in Chechnya."

After her death, Russian President Dmitry Medvedev praised Estemirova for speaking "the truth".

Deadly clashes between government forces and Islamist rebels are common in Chechnya, a predominantly Muslim region in the North Caucasus mountains.

The region was the scene of two wars between separatists and Russia's central government after the collapse of the Soviet Union in 1991.

The insurgency has spilled over into neighbouring regions, taking a steady toll of lives.

Human rights activist murdered in Caucasus region http://www.monstersandcritics.com/news/europe/news/article_1494714.php/Human-rights-activist-murdered-in-Caucasus-region

Aug 11, 2009, 5:26 GMT   Grozny, Chechnya/Moscow - Human rights activist Zarema Sadulayeva was murdered in the northern Caucasus region, her family said Tuesday.

   Sadulayeva and her husband were both found dead, relatives told the German Press Agency dpa from the Chechen capital Grozny. The couple was abducted by gunmen on Monday.

    There was no confirmation of the deaths from Russian authorities.

   Sadulayeva, who headed the human rights group Let's Save the Generation is the second activist to be murdered within one month. In mid-June Chechen activist Natalya Estemirova was kidnapped and murdered, sparking an international outcry. dpa sv im se

Hospital Releases Recovering Yevkurovhttp://www.themoscowtimes.com/article/1010/42/380396.htm

11 August 2009By Alexandra Odynova / The Moscow Times

Ingush President Yunus-Bek Yevkurov, who was badly injured in a suicide bombing in June, was released from a Moscow hospital on Monday and said he might be back to work in a week.

“If today they were to name the one who did it, I’m ready to forgive him,” Yevkurov told reporters as he left the Vishnevsky hospital, according to comments released by his press office.

“I don’t want to take revenge, but those militants who won’t lay down their weapons will be eliminated,” he said, Interfax reported.

Yevkurov suffered serious head and internal injuries when a car raced up to his motorcade near Nazran on June 22 and exploded. He has undergone several operations.

Despite the security lapse, Yevkurov said he was not planning to shuffle his staff, although he said he “has a few questions” to ask them.

“The policies will remain the same, although a bit tougher, including toward corrupt officials,” he said, Interfax reported.

“He is keeping the situation in the republic under control, receiving reports from the ministries and giving orders,” the Ingush president’s spokesman, Kaloi Akhilgov, told The Moscow Times on Monday.

A Chechen terrorist group, Riyadus Salikhin Martyrs’ Brigade, has claimed responsibility for the attack.

Yevkurov, 46, stressed the importance of fighting against rebels, whose “leaders are bought” and “blackmailed.” People who became rebels unintentionally must be returned to the peaceful life, he said.

The Ingush leader is scheduled to stay in a health resort in the Moscow region for additional rehabilitation before returning to the republic. He said he hoped to resume his work in a week but would heed doctors’ advice.

Recovering Ingush leader targets return to work in monthhttp://en.rian.ru/russia/20090811/155780548.html

MOSCOW, August 11 (RIA Novosti) - The president of the south Russian republic of Ingushetia, who survived an assassination attempt in June and was released from a Moscow hospital on Monday, plans to resume work in a month.

"I would like to return to work right away, but it looks as though I will have to wait for about a month. But I hope to return home in a week. Upon arrival in the republic, I will gather an extended session of the government and hear reports on who worked how," Yunus-Bek Yevkurov told government daily Rossiiskaya Gazeta.

Yevkurov, who is now undergoing treatment in a Moscow Region sanatorium, also said: "I saw how people in the republic worried about me, and I will try to fully justify their trust: I will work with even more enthusiasm and quality."

The Ingush leader underwent a series of operations in Moscow after sustaining head and internal injuries when a car bomb exploded as his motorcade passed by on June 22.

His press secretary said earlier that Yevkurov would undergo a five-day rehabilitation course in a medical center near Moscow and would return to the republic late next week.

Russia's mainly Muslim North Caucasus regions have seen a rise in violence in recent months. Attacks on police, officials and troops have been reported almost daily in Ingushetia and Dagestan that border Chechnya, which saw two separatist wars in the late 1990s-early 2000s.

The rise in violence followed the Kremlin officially announcing an end of its anti-terrorism campaign in the region.

Yevkurov spoke out against tough antiterrorism measures in Ingushetia, saying "there is no need" for them, but vowed to wipe out militants who would not surrender.

A group led by notorious Chechen warlord Doku Umarov has claimed responsibility for the bombing, which also killed two men accompanying the president. Umarov is a former underground president of Chechnya and now the self-proclaimed leader of the North Caucasus, or the Caucasus Emirate.

The attack on Yevkurov came after a series of high-profile killings in Ingushetia and Dagestan.

Ingushetia's forensics chief died in July after a shooting, and the republic's Supreme Court judge and Dagestan's interior minister were assassinated in June. In Chechnya, a respected human rights activist was abducted and killed last month.

Kudrin: Russian economy will need 4-5 years to recoverhttp://www.kyivpost.com/world/46765

Yesterday, 20:59 | Interfax-Ukraine

Kislovodsk, Russia. August 10 (Interfax) - It will take four to five years for the Russian economy to recover in real terms, Deputy Prime Minister and Finance Minister Alexei Kudrin told journalists in Kislovodsk on Monday.

"I think it could take four to five years to return to the previous level of GDP in real terms and for the economy to recover from the decline of about 8.5% to be seen this year. Growth of 1% is already planned for 2010. This means that we will have less revenue in real terms over these four to five years. This means that we should calculate our programs for a period of four to five years and not for one year," Kudrin said.

The government "has started to better understand the nature of the crisis and this has been reflected in the forecast for three years," he said. The fact that it will take four to five years for the economy to recover and not one year requires "a better selection of priorities and a better selection of social support measures," he said.

"We understand this better today - the nature and the prospects of this crisis as well as the likely timeframe for getting out of it and, accordingly, the measures we need to take in our economy," he said.

A considerable amount of federal budget expenditures have already been optimized, he said. "We haven't used all the reserves earmarked for this year, that wouldn't be efficient

everywhere. I think we have a good margin of safety to get through the coming years," Kudrin said.

Regional Leaders Criticized for Overspendinghttp://www.moscowtimes.ru/article/600/42/380431.htm

11 August 2009By Nadia Popova / The Moscow Times

Prime Minister Vladimir Putin on Monday scolded regional leaders for spending too much and urged them to borrow carefully as the federal government faces its first budget deficit in a decade.

“This is a crisis year, but expenses are growing,” Putin said at a meeting with regional governors in Kislovodsk, in the Stavropol region.

Putin said regional administrations’ expenses had risen 4 percent so far this year. Some of the worst offenders are the Magadan region, whose expenses have risen 38 percent; Ingushetia with a 30 percent rise; the Murmansk region with 26 percent; and Moscow with 27 percent, Putin said.

“I call on all of you to live within your means — and this begins with yourselves,” Putin said, adding that the federal government had already cut its expenses by 30 percent to 45 percent for this year and next.

Putin told the regional leaders that everyone had less money to work with during the crisis and that the federal government would spend only 1 trillion rubles ($31.5 billion) on the regions in 2010, down 16.6 percent from this year.

“We will earmark 1 trillion rules to support the regional budgets next year,” Putin said. “This is quite a big, solid sum, which, in our view, will cover the bare necessities in the regions.”

The government earmarked 1.2 trillion rubles in 2009 to support the regional budgets, which have suffered from a drop in tax revenues of 18 percent in the first half of the year.

In addition to the budgetary funds, Putin said the government had provided an extra 70 billion rubles to help regions cover their deficits. The government has allocated a total of 140 billion rubles to help cover regional deficits this year.

Putin called on regional leaders to borrow carefully and suggested that they pursue three-year loans from the finance ministry at low interest rates instead of borrowing from debt markets.

“If you borrow this year, it’s not clear what you will do with your debts next year,” Putin said. “If you think that we will transfer billions of rubles to the regions to pay off some debts as we did this year, it may not happen.”

“Putin’s speech in Kislovodsk was the first serious signal from the federal center to the regions to take control of their spending so far,” Alfa Bank chief analyst Natalya Orlova said. “By contrast, talk in the first half was all about covering the regional deficits.”

The regions borrowed 76 billion rubles from banks in the first five months of the year. The Moscow city government said Monday that it would borrow 241 billion rubles in 2010 — nearly triple the amount it will borrow this year.

The 2010 draft budget foresees a deficit of 3.2 trillion rubles ($100 billion) in 2010, or 7.5 percent of GDP. This year’s deficit, the first Russia has faced in the last decade, may climb to as much as 10 percent, Vedomosti reported Monday.

Finance Minister Alexei Kudrin, who took part in the meeting in Kislovodsk, said it would take four to five years for the Russian economy to revive.

“I think that the revival of the economy from a 8.5 percent drop in gross domestic product this year and 1 percent growth in 2010 … may take four to five years,” Kudrin said, Interfax reported. He added that the government has now begun to “better understand the character of the crisis.”

Kudrin also swatted back rumors that the government may be considering another ruble devaluation. “As long as the oil price is high, we shouldn’t talk about the devaluation,” he said.

Stavropol Governor Valery Gayevsky told Putin on Monday that he had recently prevented “a second Pikalyovo” in his region. n

“The owner of a Georgiyevsk-based plant tried to close it and file for bankruptcy, saying he had used the plant as a collateral for a project in the Rostov region,” Gayevsky said, referring to Arzil, controlled by the Viktor Makushin’s MAIR-Group.

“We didn’t let him do that. I told him directly, ‘Sell your plane … and pay people wages, pay taxes.’ He is now thinking about it, but I reported him to the law enforcement agencies.”

Medvedev Submits Troops Billhttp://www.themoscowtimes.com/article/1010/42/380413.htm

11 August 2009By Nabi Abdullaev / The Moscow Times

President Dmitry Medvedev sent a bill Monday to the State Duma that would allow for the deployment of the Russian military virtually anywhere abroad, although a senior lawmaker brushed off the announcement as a gimmick to intimidate Georgia.

Speaking at a meeting with leaders of the Duma factions in Sochi, Medvedev made clear that he was motivated by last year’s war, during which Russian troops fought on Georgian territory.

“These issues need to be strictly regulated,” he said. “We ultimately would not want these events to be repeated, but we need to have clear procedures.”

An explanatory note posted on the Kremlin web site said the bill would introduce amendments to the Law on Defense, according to which Russian troops can be used oversees to fight off aggression against Russian or foreign militaries; to prevent aggression against another state; to protect Russian citizens abroad; and to fight piracy.

The bill overlaps with the 2006 Law on Countering Terrorism, which lets the military operate against terrorists outside Russia. Under that law, the decision to deploy troops abroad is to be made by the president after getting a resolution from the Federation Council.

It was not immediately clear from the note what the decision-making procedure would be under the new bill.

Viktor Ilyukhin, a deputy head of the Duma’s Security Committee, told The Moscow Times on Monday that the bill actually aimed to streamline legal procedures for military deployments and to “press on Georgia’s sensitive spots.”

He said international law already allows Russia to use troops abroad to prevent aggression. The new provisions allowing Russia to defend foreign forces and countries would apply to states that have signed military cooperation pacts with Russia, Ilyukhin said.

Russia has signed such treaties with South Ossetia and Abkhazia, another breakaway Georgian province that Moscow recognized as independent after the war.

Hate crimes rate in Moscow down somewhat – prosecutorhttp://www.itar-tass.com/eng/level2.html?NewsID=14221908&PageNum=0

MOSCOW, August 11 (Itar-Tass) -- Moscow has seen what looks like a decline in the rate of hate crimes, the city’s prosecutor, Yuri Syomin said on Monday.

“There have been fewer nationalist attacks and extremism-fuelled crimes in general, but the situation remains explosive,” he said. “We are aware of this, the more so, since elections to the Moscow city legislature are due soon. Political activity is bound to grow.

The prosecutor’s office is bracing for this sort of trend.

“During the election campaign all matters of legal abuse and manifestations of extremism will be under our control,” the prosecutor said.

“In general extremism in Moscow has developed a downtrend. There are no explicitly extremist crimes any more,” Syomin said.

The Moscow Prosecutor’s Office has carried out 276 probes into the activity of public, religious and non-commercial organizations for their compliance with the legislation on resistance to extremist activity and issued 77 warnings. Fourteen requests for declaring information materials extremist were submitted to courts of law.

City of Moscow to borrow 241.1 bln roubles in 2010-reporthttp://www.forbes.com/feeds/afx/2009/08/10/afx6760160.html

08.10.09, 09:44 AM EDT

MOSCOW, Aug 10 (Reuters) - The City of Moscow plans to borrow 241.1 billion roubles ($7.64 billion) in 2010, a sharp increase from the amount expected to be borrowed in 2009, RIA agency reported on Monday, citing a draft of the city's budget.

The City of Moscow, which accounts for around a fifth of Russia's total economy, has investment grade credit ratings and has already borrowed around 90 billion roubles this year.

(dmitry.sergeev@reuters.com; Tel: +7495 7751242, Reuters Messaging: dmitry.sergeev.reuters.com@reuters.net)

Russian Hunger Strikers Demand Overdue Salaries, Severance http://www.rferl.org/content/Russian_Hunger_Strikers_Demand_Overdue_Salaries_Severance/1796640.html

August 10, 2009

KURGAN, Russia -- Workers at RegionAvtoTrans-Kurgan in the Russian city of Kurgan have resumed a hunger strike after the transport company's management reportedly failed to make good on a pledge to catch up on overdue payments, RFE/RL's Russian Service reports.

Twenty-eight hunger strikers are demanding what they claim are overdue salaries and severance payments.

They'd suspended their action soon after its launch on August 7 in conjunction with a promise of payment by company executives.

The hunger strikers say they will continue their protest until all the debts are paid.

What People of the Russian Far East Looked for in July - Top Yandex Searcheshttp://vostokmedia.com/n52649.html

08:45, 11.08.2009Results of entrance examinations and provision for the winter were the two distinctive topics in the rating

VLADIVOSTOK. August 11. VOSTOK-MEDIA – Yandex has published the rating of the most popular search queries made by users of the Russian Far East during July, 2009. Solar eclipse aroused the keenest interest among the users. Results of entrance examinations and provision for the winter were the two distinctive topics in the rating of the most popular search queries of the last July. Applicants were looking for lists of enrolled, while housewives were looking for recipes - [recipe of black currant], [blueberry jam], [raspberry jam] and [cherry jam]. In spite of the general enervation and abundance of holidays, new movies, contests and festivals the rating of search queries for July looks gloomily – issues relating the death of Michael Jackson, Lyudmila Zykina and DJ Dlee, reported evaluation team of Department of Marketing of Yandex.

Putin’s Team Relies on Familiar Faceshttp://www.moscowtimes.ru/article/600/42/380429.htm

11 August 2009By Natalya Krainova / The Moscow Times

Editor’s note: This is the third in a series of articles about the 10th anniversary of Vladimir Putin ascent to power.

Where were today’s political heavyweights on the day that Vladimir Putin skyrocketed to power a decade ago?

President Dmitry Medvedev taught law at St. Petersburg State University and worked for two timber companies.

Deputy Prime Minister Igor Sechin, who oversees the country’s energy sector, was serving as an adviser to the Kremlin’s chief of staff.

Vladislav Surkov, widely seen as the Kremlin’s chief ideologist and currently its first deputy chief of staff, held the No. 2 position at ORT television, which was then controlled by Boris Berezovsky.

A review of today’s top politicians reveals a motley group that appears to be held together by Putin’s will alone and would probably collapse if Medvedev’s and Putin’s paths ever diverged, analysts said.

Many officials appointed by Putin “occupy their posts exclusively by Putin’s grace and often to the detriment of professionalism,” said Alexei Mukhin, an analyst with the Center for Political Technologies.

Former President Boris Yeltsin used to fill senior posts with his “favorites,” and Putin became Yeltsin’s “assiduous disciple” on this practice, Mukhin said.

Putin himself was plucked from relative obscurity when Yeltsin named him as prime minister on Aug. 9, 1999. Putin, a former KGB spy who broke into politics as deputy St. Petersburg mayor, helmed the Federal Security Service for just one year and 15 days before Yeltsin made him prime minister and declared heir apparent. The State Duma confirmed Putin’s appointment on Aug. 16 in a 233-to-84 vote with 17 abstentions.

At the time, many of the future political heavyweights occupied state positions on the regional or federal level. A few shared common backgrounds.

Medvedev, Sechin, First Deputy Prime Minister Viktor Zubkov, Finance Minister Alexei Kudrin and Deputy Prime Minister Dmitry Kozak had worked with Putin in St. Petersburg City Hall in the early 1990s. In addition, Putin, Medvedev, Sechin, Kudrin and Kozak were all graduates of Leningrad State University.

Some officials may also have links to Putin through the KGB, but the secretive nature of the security services makes it hard to confirm this.

Medvedev, however, is not known to have any connections to the security services and instead was a law professor, legal affairs director for Ilim Pulp and a board member with the Bratsk paper mill when Putin become prime minister in 1999. Putin hired him as deputy head of the government administration in November 1999 and moved him to the Kremlin as deputy chief of staff when he became acting president the next month.

Sechin, who is widely believed to have a KGB past, saw his star rise in parallel with Putin’s. Sechin served as Putin’s deputy in the presidential property department in 1996 and 1997 and as Putin’s deputy in the presidential Main Control Directorate in 1997 and 1998.

Upon becoming prime minister, Putin named Sechin as the head of his secretariat, charged with screening appointments and documents for signing. On Dec. 31 of that year — the day Yeltsin resigned and Putin became acting president — Putin made Sechin the Kremlin deputy chief of staff.

Yeltsin appointed Surkov as Kremlin deputy chief of staff the same month that Putin became prime minister. Surkov had worked as ORT’s first deputy general director for the

previous year. Shortly after Putin became president, the state wrestled control of the channel away from Berezovsky and returned it to its Soviet-era name, Channel One.

Kozak, who is widely cited as one of Putin’s closest colleagues and has been charged with tackling some of the country’s most pressing tasks, headed the legal committee of the St. Petersburg administration from 1994 to 1999.

In August 1999, when Putin was appointed prime minister, Kozak was named Cabinet first deputy chief of staff. In June of 2000, Kozak was made deputy head of the presidential administration.

Putin later appointed Kozak as his envoy to the Southern Federal District shortly after the Beslan hostage crisis in 2004 in an effort to strengthen regional governments in the North Caucasus.

As envoy, Kozak played a crucial role in replacing the heads of North Ossetia, Karachayevo-Cherkessia and Dagestan, where ruling elites were criticized for corruption and nepotism.

Kozak now oversees preparations for the 2014 Winter Olympics.

Putin put his team together with a single task in mind: to build the top-down “power vertical” that he used to run the country, said Alexander Morozov, an independent political analyst. It has been accomplished, he said.

Putin’s group is an assorted bunch composed of “people of the past with their post-Soviet style” of thinking and “people of the future” who could step into the future together with Medvedev, Morozov said.

He said people of the past included Sechin, Federal Drug Control Agency head Viktor Ivanov and former United Shipbuilding Corporation president Yury Yarov, who did not suit Medvedev’s liberal approach to management.

The people of the future, he said, included Kudrin, First Deputy Prime Minister Igor Shuvalov and Kremlin chief of staff Sergei Naryshkin, who are “strong specialists” that adhered to “a modern political style.”

All these officials owe their jobs to Putin.

Kudrin, a first deputy finance minister when Putin rose to power in 1999, was elevated to minister after he was sworn in for his first term as president in May 2000.

Shuvalov, who headed the Federal Property Fund in 1999, was appointed head of the government staff by Putin in May 2000, and Naryshkin, who headed the Leningrad region’s committee on foreign economic relations in 1999, was appointed deputy head of the Kremlin’s economics department in February 2004.

Ivanov, who served as Putin’s deputy at the FSB, was appointed as deputy head of the presidential staff in 2000. He was dispatched to the drug control agency when Medvedev became president.

Zubkov was deputy tax minister in 1999 and went on to head the Federal Financial Monitoring Service for six years before Putin named him as prime minister for a brief stint in 2007.

Stanislav Belkovsky, a political analyst who served as a spin doctor in Putin’s Kremlin, said Putin’s appointees could not be called a real team because they were “hostile to one another” and “did not solve common tasks.”

But he said Putin wasn’t the only factor holding the group together.

“Big money and corruption decide everything,” Belkovsky said. “This is the logic in which this system exists.”

National Economic Trends

Russian economy shrinks 10.9%http://www.france24.com/en/20090811-russian-economy-shrinks-109

Tuesday, August 11, 2009 - 09:20

Russia's economy contracted 10.9 percent in the second quarter of 2009 from output in the same period last year, but increased 7.5 percent from output in the first quarter, initial data from the statistics office showed on Tuesday.

In the first quarter, gross domestic product (GDP) had fallen 9.8 percent on a 12-month basis.

The government is forecasting a contraction of up to 8.5 percent in GDP in 2009, in a dramatic end to the robust growth the country enjoyed over the last half decade on the back of high energy prices.

Russia has been hit harder than other major developing economies by the economic crisis which has shown up its failure to implement reform to reduce dependence on hydrocarbon exports.

Russia Output Shrank Record 10.9% Last Quarter as Slump Deepenshttp://www.bloomberg.com/apps/news?pid=20601068&sid=aYImZJKQlUnk

By Paul Abelsky

Aug. 11 (Bloomberg) -- Russia’s economy contracted the most on record last quarter as rising unemployment sapped consumer demand, bank lending stalled and the government was slow to respond with support measures.

Gross domestic product contracted an annual 10.9 percent in the second quarter, the Federal Statistics Service said in an e- mailed statement today, citing preliminary data. The median estimate in a Bloomberg survey of seven economists was for output to shrink 10.2 percent. GDP expanded 7.5 percent from the previous quarter. The service’s data go as far back as 1995.

Russia’s economic decline is worsening after output contracted 9.8 percent in the first quarter, ending 10 years of expansion that averaged close to 7 percent. The worst global financial crisis since the Great Depression undermined demand for Russia’s oil, natural gas and metals. The country’s industrial production plunged as companies depleted stocks and struggled to raise funds during the credit crunch.

“We can’t develop like this any longer,” President Dmitry Medvedev said yesterday during a meeting with political party leaders in the Black Sea resort of Sochi. “It’s a dead end. And the crisis has placed us in a situation where we will have to make decisions on changing the structure of the economy.”

Russia “crumbled” after commodity prices collapsed, Medvedev said. Energy, including oil and natural gas, accounted for 68.8 percent of exports to the Baltic states and countries outside the former Soviet Union in the first six months of the year, Russia’s Federal Customs Service said last week.

Urals crude oil, Russia’s chief export earner, averaged $61.03 a barrel during the last quarter after reaching a record $142.5 in July 2008.

Stocks, Oil

Russian stock market moves are showing record correlations with oil futures traded in New York, based on daily changes over the past 90 days, according to data compiled by Bloomberg. The 30-stock Micex index, which is mostly made up of energy companies, slipped into a bear market in June after falling more than 20 percent from its high on June 1, on concern a prolonged recession will cut demand for fuel. It gained 8.4 percent in July and is up 79 percent this year.

The world’s biggest energy exporter may run a budget deficit as wide as 9.4 percent of GDP this year, the country’s first shortfall in a decade, as plummeting demand for commodities threatens to cut revenue by a third, according to the Finance Ministry.

Russia has earmarked 2.51 trillion rubles ($79 billion) in spending to battle the slump, including funding designated for carmakers, agriculture and construction. The “anti-crisis” program was signed into law by Putin on June 19.

‘Might Fail’

“The planned fiscal relaxation might fail to stimulate private consumption in the face of significant uncertainty about future income,” the International Monetary Fund said in a report published on Aug. 7. “Absent a more determined policy intervention, there is a risk that banks will continue to struggle to adjust balance sheets, stifling credit expansion and impeding a recovery.”

Declining inventories accounted for 80 percent of the drop in GDP during the first three months, according to the Economy Ministry, which predicts output may shrink as much as 8.5 percent this year.

Russia’s inflation rate rose in July for the first time in four months, advancing to 12 percent from 11.9 percent in June. The trade surplus widened in June to $9.03 billion from $8.8 billion in the previous month.

The economy may start to show signs of recovery in the third quarter this year, Deputy Economy Minister Andrei Klepach said on July 23.

Central Bank

Russia’s economy will need between four years and five years to match last year’s pace of growth, Finance Minister Alexei Kudrin said yesterday. GDP in 2008 grew at the slowest pace since 2002, expanding 5.6 percent compared with 8.1 percent a year earlier.

The IMF forecasts a 6.5 percent economic contraction for Russia this year, followed by growth of 1.5 percent in 2010.

The central bank’s five interest-rate cuts since April 24 have failed to spur lending as banks hold back on concern borrowers can’t repay loans. Lending to consumers dropped 1.1 percent in June for the fifth consecutive monthly decline and banks shrank their corporate loan books by 1.2 percent, according to central bank data.

By the end of 2009, 17.4 percent of the population, or 24.6 million people, will be living beneath the subsistence level of $185 per month, almost 5 percent more than before the crisis, the World Bank said in a report released in June.

Unemployment may exceed 13 percent by the end of the year, compared with 8.3 percent in June, according to the World Bank.

Rising numbers of jobless and falling wages will cut the country’s nascent middle class by 10 percent, or 6.2 million people, to about 51.2 percent of the population, the Washington- based lender said. Household consumption, “the main source of growth in recent years,” is “collapsing,” it added.

To contact the reporter on this story: Paul Abelsky in St. Petersburg at pabelsky@bloomberg.net.

Last Updated: August 11, 2009 04:00 EDT

Ruble Gains Versus Dollar First Time in Week Before GDP Reporthttp://www.bloomberg.com/apps/news?pid=20601013&sid=aGeo90HaMbKE

By Denis Maternovsky

Aug. 11 (Bloomberg) -- The ruble gained versus dollar for the first time in a week before a quarterly economic report that probably will show Russia’s gross domestic product contracted more than 10 percent.

The currency gained 0.2 percent to 31.7481 per dollar by 11:05 a.m. in Moscow, its first advance since Aug 4. GDP probably contracted 10.2 percent in the second quarter, seven analysts in a Bloomberg survey said before the Federal Statistics Service reports the data at 12 p.m. in Moscow.

Russia, the world’s largest energy supplier, is poised for its first recession in a decade as the global economic slowdown cuts demand for fuel. The country spent more than a third of its foreign-exchange reserves to help stem a 35 percent devaluation in the ruble from August to January after crude dropped by more than $100 a barrel from a July record.

The ruble gained 0.2 percent to 44.9849 per euro, the highest in four days. The movements against the dollar and the euro left the ruble at 37.7086 versus the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.

The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged Jan. 22 to defend.

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

Last Updated: August 11, 2009 03:19 EDT

Russian government to decide on bond issue in Septemberhttp://www.businessneweurope.eu/dispatch_text9501

bneAugust 11, 2009

Russia's government will decide on the size of a slated bond issue in September that will be used to recapitalize the banking system, Deputy Prime Minister and Finance Minister

Alexei Kudrin told Prime Tass on Monday.

The size of the issue will probably be between RUB150bn and RUB220bn, Kudrin said.

Kudrin went on to say there is no chance that the ruble will be devalued again later this year, countering speculation amongst some economists.

"There are currently no fundamental grounds to talk about devaluation," Kudrin said."There's no reason to talk about devaluation while oil prices are high," he said.

Oil was trading at over $73 a barrel on Monday, well above the $43 level it hit at the start of this year. Kudrin said he thought oil might remain high until the middle of next year, supported by the actions by monetary authorities in various countries to bolster liquidity.

However, Kudrin admitted that a lot of damage has been done to the economy by the crisis and believes it will take 4-5 years for GDP to recover to its 2008 level.

"I think it could take four to five years to return to the previous level of GDP in real terms and for the economy to recover from the decline of about 8.5% to be seen this year. Growth of 1% is already planned for 2010. This means that we will have less revenue in real terms over these four to five years. This means that we should calculate our programs for a period of four to five years and not for one year," Kudrin said.

Russian Harvest Reached 45.3 Million Tons of Grain on Aug. 10http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7p0Zx5IZOAI

By Maria Kolesnikova

Aug. 11 (Bloomberg) -- Russia harvested 45.3 million metric tons of grain, including 34.1 million tons of wheat, as of Aug. 10, the Agriculture Ministry said in an e-mailed statement today.

To contact the reporter on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net

Last Updated: August 11, 2009 01:35 EDT

Business, Energy or Environmental regulations or discussions

MDM and URSA: Post-merger comments and rating actionshttp://www.businessneweurope.eu/dispatch_text9501

Renaissance Capital, RussiaTuesday, August 11, 2009

Yesterday (10 Aug) Chairman of MDM Bank's board of directors, Oleg Vyugin, gave an

interview to Reuters, highlighting some important points about the merged bank's plans. One of the key points highlighted by Vyugin is that the merged bank (MDM and URSA) most likely will not seek state support in terms of Tier-1 capital injection, pointing out that existing shareholders are ready to provide the bank with fresh capital if necessary. We see this announcement as logical and generally credit-neutral: We estimate a combined equity ratio of the merged bank at around 13-14%, while the provisioning levels are already very high. Therefore we believe that in a reasonably pessimistic scenario the bank will be able to create sufficient provisions and still keep its capital position in excess of the regulatory requirements.

Regarding future business plans, Vyugin told Reuters that after a long period of loan book contraction, the merged bank is eyeing the renewal of lending operations in 2H09, mainly focusing on retail products. Given the solid liquidity position of both entities and their zero dependence on Central Bank of Russia (CBR) funding, we also believe this is a logical step, especially taking into consideration URSA's strong retail business competence.

Following the formal merger finalisation, the rating agencies have also provided their updated reaction on the transaction:

S&P downgraded the merged bank to B+/Stable, Moody's assigned a Ba2 rating to the surviving entity (upgrading URSA and downgrading MDM by one notch respectively) and Fitch kept the ratings of the merged bank at BB-/Negative. While Fitch and Moody's actions are rather technical, S&P's move, in our view, highlights the agency's negative stance towards the merger, which we do not tend to agree with. S&P pointed out high liquidity risks, which, in our view, is not the real case for the merged bank. The agency also expects the bank to report a significant net loss for 2009, given the need to accumulate significant provisions - a view which contradicts the guidance provided by Igor Kim, CEO of the merged bank, who told journalists yesterday that the bank plans to end the year with a positive bottom-line. Overall, we do not see rating positioning of the merged bank below Alfa Bank as fundamentally justified.

In our view, yesterday's announcements are price-neutral for both bank's bonds.

Maxim Raskosnov

Government announces new rules for 'guaranteed investment projects'http://www.businessneweurope.eu/dispatch_text9501

Renaissance Capital, RussiaTuesday, August 11, 2009

Event: A Ministry of Energy press statement issued on Friday (7 Aug) announced the adoption of new rules governing so-called 'guaranteed investments' in new electricity generation capacity. Amendments to existing legislation include the removal of a 2010 deadline for project choice; the inclusion of capacity and electricity payments from sales

in liberalised markets (as well as guaranteed payments from the System Operator); the inclusion of pumped storage plants within the scheme; and, the transfer of oversight from the now-defunct Rosenerg to the System Operator.

Action: Positive for InterRAO, RusHydro and OGK3, in our view.

Rationale: We see the new rules as generally more generous than the existing rules and think that the immediate beneficiaries will be InterRAO (which has operational control of OGK1's Urengoiskaya GRES project), OGK3 (the Tarko-Sale project in Tyumen Regio) and RusHydro, which is currently extending Moscow's Zagorskaya pumped storage plant and plans construction of new pumped storage facilities in the North-West and Center Regions. We caution that the level of payments to be covered by the new scheme will not be known until the Federal Tariff Service discloses its methodology for the calculation of guaranteed payments, due to be released in the next three month.

Vladimir Sklyar

Electricity Council latest figures show 10% contraction in demandhttp://www.businessneweurope.eu/dispatch_text9501

Renaissance Capital, RussiaTuesday, August 11, 2009

Event: The wholesale electricity Market Council reported on Friday (7 Aug) that electricity consumption in Russia for the week of 28 July - 4 Aug decreased 10% YoY, and comprised a 10.7% decrease in European Russia and 7.2% decrease in Siberia. The contraction in demand was, by a small margin, the largest since the beginning of the global financial crisis. The level of payment arrears for the same week decreased by 9% and now stands at RUB30.3bn ($960mn). The sharp improvement primarily reflected the consumer practice of paying utility bills at the end of each month.

Action: Neutral for power sector companies, in our view.

Rationale: Electricity demand figures over holiday periods are notoriously fickle and we are wary of reading too much into the latest figures, which are showing a further contraction in demand.

10.08.2009 - Cbonds

TGK-13 to raise $75m loan from EBRDhttp://www.cbonds.info/all/eng/news/index.phtml/params/id/440322A 10-year $75 million EBRD loan will finance the construction of a combined heat and power plant in the east Siberian city of Krasnoyarsk which is expected to improve energy efficiency and cut pollution by 14 percent thanks to the use of more environmentally-friendly technologies.

The borrower is TGK-13, a regional generating company controlled by Russia’s largest coal producer, SUEK. The EBRD loan is covered by a corporate guarantee from SUEK. TGK-13’s shares are traded on Russia’s MICEX and RTS exchanges.The transaction is an integral part of the EBRD’s strategy to support private companies operating in Russia’s liberalised power market through a Bank programme funding projects bringing significant environmental benefits and energy efficiency gains.

This deal is very important for SUEK since this EBRD loan will help realise one of the group’s high-priority investment projects in the power sector, commented Sergei Mironosetskiy, SUEK’s Director for the Power Sector, Mergers and Acquisitions.

Krasnoyarsk’s new coal-fired unit is expected to cut carbon dioxide emissions by 237,000 tonnes of CO2 a year, the equivalent of the annual pollution created by 100,000 cars on the streets of London. The new power plant will allow the City of Krasnoyarsk to stop using obsolete and energy-wasteful old boilers, including electric-powered ones.

This project will bring cleaner, more efficient and more reliable energy supply to the City of Krasnoyarsk, demonstrating EBRD's commitment to expand its operations in this important region of Russia, said Nandita Parshad, Director of the EBRD’s Power and Energy team.

It is the Bank's first project with SUEK, and we are proud to assist SUEK and TGK-13 with the implementation of the best available environmental and technical standards in Russia as part of this project, Ms. Parshad added The deal brings to over $1.9 billion the amount invested by the EBRD in the Russian power sector since 2001 through 12 transactions, including this one.The Russian power sector is the world’s fourth largest. Of all the country’s energy consumers, it offers the greatest potential for energy efficiency improvements and emission reductions. This is mainly due to the advanced age of installed equipment and an almost total lack of investment in new generating assets over the last 20 years.

TGK-13, which was privatised in 2008 as part of the reform of the Russian power sector, employs some 7,000 people. Its new Krasnoyarsk unit is expected to generate 1.1 billion kilowatts of electricity a year and 0.9 million Giga Calories of heat.

Rusal may IPO to raise money for debts http://www.businessneweurope.eu/dispatch_text9501

bneAugust 11, 2009

Russian aluminium producer United Company Rusal may IPO within two years to raise money to repay some of the billions of dollars it owes in debt, says Oleg Mukhamedshin, Rusal's director for capital markets, reports Prime Tass.

In the meantime the company can pay down some of its debt out of its cashflow Mukhamedshin said. Countering speculation in the press, he said that selling its stake in metals company Norilsk Nickel was not an option.

Rusal owes $14bn to banks and is to repay about $7bn by November, including a $4.5bn debt to state-owned Vnesheconombank.

Deal Broker Available

http://www.moscowtimes.ru/article/1009/42/380411.htm

Vladimir Strzhalkovsky, chief executive officer of Norilsk Nickel, offered to find buyers for the 25 percent stake in his company held by United Company RusAl if it opts to dispose of the shares.

“Should RusAl decide to sell its stake, I’m ready to assist in forming such a pool of investors,” Strzhalkovsky said Monday in an interview with Vedomosti. (Bloomberg)

Severstal eying purchase of Holding Gonvarri Russiahttp://www.steelguru.com/news/russian.html

Tuesday, 11 Aug 2009

It is reported that Severstal has submitted notification to the European Commission of its intention to acquire steel processing and distribution company Holding Gonvarri Russia SL which belongs to Spanish steel and motor vehicle parts producer Gonvarri Corporación Financiera SL.

Severstal notification will be examined by the EC under a simplified scheme before September 4th 2009.

The EC said its statement on the issue "On preliminary examination, the Commission finds that the notified transaction could fall within the scope of Regulation No 139/2004. However, the final decision on this point is reserved.”

Meanwhile, in early June this year, Severstal and Gonvarri a subsidiary of Spanish company Gestamp Corporation, a manufacturer of steel components and structural systems for the automotive industry, registered a new JV for automobile stamping production in the Kaluga region of Russia which will produce auto body parts for the factory of leading German automobile manufacturer Volkswagen located in the same industrial zone.

Within the framework of the JV, the construction of a new 170,000 tonnes capacity metal service center has been commenced in Russia Kaluga region, aimed at meeting the needs of the automobile industry, as well as of the electrotechnical, electronic and construction industries. The total investments in the service center are estimated at EUR 40 million while its construction is scheduled to be completed in Q1 2010 at the same time as the commissioning of the Gestamp Severstal JV automobile stamping plant in the Kaluga

region.

(Sourced from Steel Orbis)

Alfa to take control of Estar Donetsk steel mill – Reporthttp://www.steelguru.com/news/index/2009/08/11/MTA2NTkx/Alfa_to_take_control_of_Estar_Donetsk_steel_mill_-_Report.html

Tuesday, 11 Aug 2009

Bloomberg reported that A1 an investment company that part of Russian billionaire Mr Mikhail Fridman Alfa Group may take control of OOO Estar Holding’s Donetsk steel mill in the Ukraine within days.

Ms Irina Ramazanova spokeswoman for ZAO Donetsky Electrometallurgical Plant said A1 appointed three managers to run the mill.

Kommersant reported the ownership of the plant will change after Estar founder Mr Vadim Varshavsky and his partners failed to repay a loan from Alfa Bank of almost USD 1 billion.

(Sourced from Bloomberg)

Raspadskaya raises domestic coal prices and increases supply to China

http://www.businessneweurope.eu/dispatch_text9501

Renaissance Capital, RussiaTuesday, August 11, 2009

Event: Yesterday (10 Aug), several news agencies (Metal Courier, Interfax and Bloomberg ) reported that Raspadskaya's plans to raise coking coal concentrate prices for domestic customers by 15-20% to RUB1,900-2,000/t ($60-63/t) for September delivery. The news agencies also reported that Raspadskaya supplied 26-27 kt of coking coal through Far Eastern ports to China in July compared to 4-5 kt in June. The current price of coking coal is $105-115/t (FOB, Far East).

Action: The news is neutral-to-positive for Raspadskaya, in our view. We reiterate our BUY rating on the stock.

Rationale: Raspadskaya did not confirm the facts provided by the news agencies. The average Raspadskaya selling price in 2Q09 was $46.2/t of coking coal, while all major steel mills confirmed fixed coal prices until 4Q09. Thus, it is not clear which base for comparison was used by the news agencies. In our view, local coal producers do not have significant bargaining power until the end of the year. However, the continuation of strengthening of international raw materials and steel prices may be supportive for domestic coal prices in 1H10. Australian (Fe 62%, CIF China) and Indian (Fe 63.5%, CIF China) iron ore spot prices amounted to $104/t (+9% WoW) and $111/t (+10% WoW)

respectively last week. Baoshan, China's biggest steelmaker, announced an $88/t increase of HRC prices for September delivery. The access to the Chinese market is essential for Raspadskaya, as China's imports of coking coal increased by 340% YoY in 1H09, which was driven by rising steel output. The Chinese National Bureau of Statistics announced today that July steel production was 50.7mnt (+13% YoY and +2.6% MoM), which is the third consecutive record monthly high.

Boris Krasnojenov

Mechel signs memorandum of cooperation with Mitsui

http://www.businessneweurope.eu/dispatch_text9501

Alfa, RussiaTuesday, August 11, 2009

Yesterday Mechel signed a memorandum of cooperation with Mitsui, one of the largest diversified groups in the world. The companies agreed to cooperate in marketing and sale of steel and raw materials products, including coal. However, the document does not specify the terms of the cooperation and the projects the parties are going to work on. According to Vedomosti, cooperation with Mitsui will help Mechel to expand further into the Asian and American markets. Moreover, the companies may also consider the purchase by Mitsui of a stake in Mechel's Mining or Ferroalloys divisions.

Among Mitsui's core businesses in the mining universe are coal and ferroalloys production. Therefore, one possible area of cooperation is the Elga deposit. Three years ago, the Japanese participated in the auction for Elga.

The company also signed an agreement with Russia's OPK Group on the development of the large Elegest coking coal deposit. On Mechel's side, the company previously stated that it could sell a minority stake to an Asian investor. We think Mechel may sell a 10-15% stake in Elga. Mitsui, in turn, owns stakes in a number of iron ore projects in Australia.

We treat the news as POSITIVE, as this may help Mechel obtain funds to develop the huge Elga deposit.

Sistema to start placing 20 bln rubles in second series bonds Aug 18,guidance 14.95% (Part 4)http://www.interfax.com/3/510280/news.aspx

MOSCOW. Aug 11 (Interfax) - The Sistema (RTS: AFKS) holding plansto start placing 20 billion rubles in second series bonds on August 18,the company said in a statement. "The company is prepared to borrow at not more than 14.95% pa," awell informed source in banking circles told Interfax.

The placement of series two bonds is aimed at further optimizationof Sistema's debt portfolio structure in order to increase the share ofruble-denominated financial instruments and to extend its maturity,Sistema said. "We have largely resolved Sistema's debt financing needs for 2009.This bond placement is not tied to the refinancing of our short andmedium term debt obligations. In line with our corporate debt managementstrategy we intend to issue ruble-denominated bonds in order to optimizethe Group's debt portfolio structure and expect to benefit fromfavorable market conditions which currently exist for financialinstruments issued in rubles," said Alexey Buyanov, Senior VicePresident and Head of Sistema's Finance and Investment Group. The bonds will have a five-year maturity and will be callable inthree years following the sixth coupon payment. The Board of Directorshas canceled its previous decision which was made in February 2009 tocall the bonds in one year following the second coupon payment. Thebonds will be placed on the Moscow Interbank Currency Exchange (MICEX). Furthermore, the placement of 19 billion rubles in third seriesbonds with a seven year maturity is planned in the fourth quarter of2009 or thereafter, Sistema said. The Federal Financial Markets Service (FFMS) registered the secondseries bond issue on February 3. The underwriter is Renaissance Broker, and Sistema FinanceInvestments is guaranteeing the bonds. Sistema last week decided in favor of placing the 19 billion rublesin third-series bonds. Sistema has a first series of 6 billion rubles in bonds, maturingin March 2013, outstanding. Consolidated debt was $9.4 billion as at the end of Q1 2009, andruble borrowing accounted for 31% of this.

Uralkali to Boost Supplies to Fertilizer Firmshttp://www.moscowtimes.ru/article/1009/42/380410.htm

11 August 2009Bloomberg

Uralkali agreed to sell more to three domestic fertilizer makers to bolster supply from Silvinit, Uralkali said Monday.

Uralkali will increase domestic sales by 50 percent to supply Acron, UralChem, and Minudobrenie, part-owned by Yara International, through December. The price is 3,955 rubles ($124.78) per ton, Uralkali spokesman Alan Basiev said by phone, confirming an earlier Kommersant report.

Acron and the two other companies on Aug. 5 said they halted production lines after Silvinit cut off supplies in July and asked for higher prices. Silvinit didn’t cut off supplies and is still charging 3,955 rubles a ton, Anton Subbotin, a spokesman for the company, said Monday.

Silvinit will supply 200,000 tons domestically before Jan. 1, part of an

accord with Russia’s anti-monopoly body last year to sell 900,000 tons a year to the domestic market, Subbotin said. Uralkali’s new accord to increase sales to domestic fertilizer makers is only a short-term solution, Basiev said.

Uralkali and Silvinit already agreed to scrap plans for higher domestic prices after a request from the government. The two companies export most of their output for at least triple the price charged domestically.

CTC Media set to expandhttp://www.broadbandtvnews.com/2009/08/11/ctc-media-set-to-expand/

By Chris DziadulAugust 11, 2009 08.54 UK

Russia’s CTC Media is looking to expand its presence outside the country.

Kommersant reports that the commercial broadcaster, which is backed by Modern Times Group (MTG), is hoping to enter into a joint venture with the Belarusian cable operator BelMuzTV.

Negotiations between the two parties have apparently been ongoing for a year, and a final decision is now pending.

CTC Media already has interests in Kazakhstan, Uzbekistan and Moldova. Legislation that came into effect in February this year puts a 30% foreign ownership cap on media companies operating in Belarus.

Isuzu's Russia venture with Sollers halts productionhttp://www.forbes.com/feeds/afx/2009/08/10/afx6760237.html

08.10.09, 10:08 AM EDT

MOSCOW, August 10 (Reuters) - The Severstal-Avto Isuzu joint venture between Russia's Sollers and Japan's Isuzu Motors Ltd has temporarily halted production, due to weak demand for its trucks, a spokeswoman for the firm said on Monday.

'We expect to resume production in the fall,' Severstal-Avto Isuzu spokeswoman Zoya Kayika said. She added that the joint-venture remains intact despite the stoppage.

Demand for commercial vehicles is falling sharply as Russia's economy contracts, with rival Kamaz halting production seven times since last autumn.

Employees at the Russo-Japanese venture's production facility in the Russian republic of Tatarstan have been transferred to the Sollers-Yelabuga plant that produces the Fiat ( FIATY.PK - news - people ) Ducato in the same special economic zone.

Sollers has a 66 percent stake in the Severstal-Avto Isuzu joint venture, while the Japanese company holds 29 percent and Sojitz Corp owns the remaining 5 percent.

(Reporting by Alexander Gelogaev, writing by Alfred Kueppers; Editing by Rupert Winchester) Keywords: SOLLERS ISUZU/PRODUCTION

VEB to Help Finance Aeroflot Jet Purchasehttp://www.themoscowtimes.com/article/600/42/380400.htm

11 August 2009By Maria Antonova / The Moscow Times

Aeroflot, Sukhoi Civil Aircraft and VEB will sign an agreement next week under which the bank will finance the delivery of Superjet aircraft to Aeroflot, Industry and Trade Minister Viktor Khristenko said Monday.

The sides will sign the contract at the annual MAKS Aviation Salon, Khristenko said. The event will take place Aug. 18 through 23 in Zhukovsky, a town in the Moscow region.

Aeroflot ordered 30 Superjets at a discounted price of $21 million, which was later increased by about $1.4 million because of additional equipment expenses. VEB is expected to finance 10 aircraft through its VEB-Leasing subsidiary.

Aeroflot and Armenian airline Armavia are expected to receive the first two Superjets by the end of the year.

Three aircraft are undergoing testing, and 13 more are in various stages of completion, Khristenko said. Twenty Superjets will be produced in 2010, and by 2013 Sukhoi hopes to produce as many as 70 per year.

Sukhoi currently has orders for 122 Superjets.

“I don’t want to speculate on how many more contracts will be signed during MAKS,” Khristenko said. “It’s not the best time to sign contracts.”

Since 2004, state support for the aviation construction industry increased twentyfold, to about 90 billion rubles ($2.8 billion) in 2009, Khristenko said.

The substantial government support is meant to “guide the corporations through the difficult period,” Khristenko said, referring to the three main aviation construction concerns in Russia: the United Aircraft Corporation, United Engine Building Corporation and Russian Helicopters.

The restructuring of these industries is complete, but the next step, which is raising capital through share sales, has been postponed because “it’s bad manners to go public right now,” he said.

Steady demand for Russian civilian aircraft can save the industry, Khristenko said, expressing hope that planned airline Rosavia, a joint venture between Russian Technologies and the Moscow government, will become a significant partner for the local industry.

Some analysts have called Rosavia dead in the water, since little progress has been made on its development. Khristenko was more optimistic, however, saying of the airline, “I wish them more health than I do myself.”

The Russian industry hopes to take a 5 percent market share for regional and mid-range planes in 2015 and up to 10 percent by 2025. But there are currently only two Russian planes ready to begin operations in this segment: the regional Superjet and the An-148, so “we will have to work hard” to reach those goals, said Oleg Panteleyev, an independent analyst.

“But it will be possible in the segments where UAC will have a product,” Panteleyev said.

UAC’s highly awaited candidate for the mid-range segment, the MS-21, will likely be available only in 2020. Russia has no projects for a long-range aircraft, Khristenko said.

Magnit Russian Sales Advanced 30% in July to 14.6 Billion Rubleshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4vNHtyg7zfo

By Brad Cook

Aug. 11 (Bloomberg) -- OAO Magnit, Russia’s second-biggest food retailer, said sales in July rose 30 percent to 14.6 billion rubles ($458 million).

Magnit opened 56 stores last month, boosting the chain’s total to 2,864, the Krasnodar, southern Russia-based company said in an e-mailed statement today. Sales in dollar terms declined 3.5 percent in July, Magnit said.

Last Updated: August 11, 2009 01:26 EDT

Activity in the Oil and Gas sector (including regulatory)

Russia could hike oil export duty to $237-$241 a tonne on Sept 1 –officialhttp://www.interfax.com/3/510307/news.aspx

MOSCOW. Aug 11 (Interfax) - Russian could hike the export duty oncrude oil to $237-$241 a tonne from $222 a tonne on September 1,Alexander Sakovich, the Finance Ministry official in charge of customspayments, told Interfax.

AUGUST 10, 2009, 11:26 A.M. ET

Source: Lukoil Takes Out $1.2 Bln 3-Yr Club Loan - Prime-Tass http://online.wsj.com/article/BT-CO-20090810-710853.html

MOSCOW (Dow Jones)--Russian oil major Lukoil has taken out a $1.2 billion three-year club loan, a person familiar with the banking side told Prime-Tass news agency Monday.

The loan agreement was signed last week. The loan was taken out at an annual interest rate of 4% over the London interbank offered rate, the person said.

The lenders included Bank of Tokyo-Mitsubishi UFJ, Barclays Capital, BNP Paribas, Calyon, Citi, Deutsche Bank, ING, Natixis, Orgresbank, Royal Bank of Scotland, Societe Generale, and WestLB, the person added.

GE Oil & Gas Develops Unique –60ºC Gas Turbine Generators For Rosneft Power Station At Vankor Oil Fieldhttp://www.oilandgasonline.com/article.mvc/GE-Oil-Gas-Develops-Unique-60C-Gas-0001?VNETCOOKIE=NO

August 11, 2009

Moscow, Russia - GE Oil & Gas, a world leading company in oil and gas advanced technology equipment and services, announces that it has designed unique gas turbine generators that can operate in temperatures up to -60ºC for a power plant project at the Vankor oil field (Turukhansky district, Krasnoyarsk region) owned by Rosneft oil company.

The 210 MWt gas turbine power station at the Vankor oil field will become the only complete source of power and heat used for life support and oil and gas production, as well as part of the first stage of the oil field's launch into operation. Rosneft obtained licenses to explore the oil field in 2003.

As part of its continuing cooperation with Rosneft, GE Oil & Gas is supplying eight gas turbine generators based on MS5001PA gas turbines. To ensure reliable operation of the equipment in extreme climatic conditions, GE Oil & Gas has developed a special turbine design and used automated heating systems to transport and store the equipment on the site.

The gas turbine generators were delivered ahead of schedule under two contracts signed in December 2006 and May 2008. Four units were delivered to the customer in August 2007 and another four – in March 2009. Under the contracts, GE will also train experts that will provide technical maintenance of the gas turbines on the site.

In addition, GE Oil & Gas has developed five special training programs for Rosneft personnel and is currently coordinating a tailored training program for the first group to be delivered at GE Oil & Gas headquarters in Florence, Italy.

Alexander Chuvayev, GE Oil & Gas region sales executive for Russia and CIS, said: "We are delighted to consolidate our partnership with Rosneft through the supply of MS5001PA gas turbines. This contract acknowledges the utmost reliability of our product structured equipment which can be customized to withstand operations in the world's harshest climatic conditions, for example, from minus sixty degrees centigrade in Siberia to plus sixty degrees centigrade in Africa and the Middle East."

The MS5001PA is a 26.3 MWt industrial-type single-shaft gas turbine. This type of equipment has the highest level of reliability. Over 2,500 MS5001's are in operation worldwide.

SOURCE: GE Oil & Gas

Gazprom

Mol, Gazprom to Set Up Gas Storage Company, Vilaggazdasag Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=axulf8OhWcB8

By Edith Balazs

Aug. 11 (Bloomberg) -- Mol Nyrt., Hungary’s largest oil refiner, will set up a joint venture with Russia’s state-run OAO Gazprom this year to build a natural-gas storage facility in Hungary, Vilaggazdasag reported, without citing anyone.

The two companies will have equal stakes in the 1.3 billion cubic-meter facility, which could service the South Stream pipeline, the Budapest-based newspaper said today.

Gazprom also wants to rent 100 billion to 200 billion cubic meters of storage capacity from E.ON Foldgaz Storage Zrt., a local unit of Germany’s E.ON AG, the paper said.

To contact the reporter on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net

Last Updated: August 11, 2009 01:58 EDT

NIS appoints independent auditor http://www.b92.net/eng/news/business-article.php?yyyy=2009&mm=08&dd=11&nav_id=61082

11 August 2009 | 09:42 | Source: Tanjug BELGRADE -- Serbian Oil Industry (NIS) management approved Monday the appointment of Ernst & Young company as special auditor of its 2008 accounts.

The Serbian government decided earlier not to appoint an independent auditor for NIS and recommended to that company to engage at their own expense an independent auditor through a contract with the company.

The auditor should establish whether NIS last year had a profit of RSD 2.3bn as the previous leadership of the firm had claimed when it was a public company, or whether it had a loss of around RSD 8bn, as shown in the report by the KPMG auditor engaged by Russia's Gazprom, the new majority owner of NIS.

The auditor should finish this task by September 30, which is the deadline for submitting a financial balance for the last year, according to the law on economic societies.

But NIS Board of Directors member Danica Drašković said that the deadline for the final balance for 2008 was extended to the end of 2009.