Russia 091208

Basic Political Developments Interfax: Moscow press review for December 8, 2009 Interfax: Terror threat remains in Russia – FSB Interfax: Modern threats, challenges can only be countered by working together –

Patrushev Interfax: Medvedev asks Federation Council to allow president to use troops

abroad Interfax: Russia will retain nuclear status – RVSN commander (Part 2) MyNews.in: PM wraps up three day visit to Russia, 6 deals inked

o FT.com: Russia to supply India with nuclear reactorso Reuters: Russia, India PM talks highlight BRIC differenceso PTI: Russia supports India's membership in Asia-Pacific Economic

Cooperationo NNN: India-Russia civil nuclear pact assures fuel supplies even after

terminationo Business Standard: Take Indo-Russia trade ties to new high: PM tells

businessmeno Bloomberg: India, Russia Agree to Boost Atomic Power Cooperation

(Update1) Itar-Tass: Putin arrives in Sverdlovsk region, to tour three def plants Interfax: Russian govt drafting measures to increase responsibility on businesses –

Putin Itar-Tass: PT med institutions lacked sufficient drugs, eqt—Putin RIA: Vladimir Putin blasts fire safety measures in Russia Reuters: Russia's Putin lambasts officials after disco fire Ynetnews: Israeli charged with negligence in Russian nightclub case RIA: Families of Perm nightclub blaze victims to get $16,700 each Xinhua: Russian nightclub fire death toll revised up to 118 RIA: Russians less focused on climate change than other Europeans The Moscow Times: Climate Breakthrough Sought NY Times: A Heads-Up on Russia's Role in Arctic LA Times: Russia reigns over its weather Russia Today: Russia’s two major opposition parties to unite? RIA: Police officer injured in Chechnya blast RIA: Russian authorities foil 81 terror acts in N.Caucasus in 2009 RFERL: Controversial Russian Blogger Says Met With Kremlin Officials The St. Petersburg Times: Former Cop Visits City To Campaign For Reform The Moscow Times: Internet Provider Says It Blocks Sites Bloomberg: Hitler’s Remains Were Destroyed on KGB Orders, Interfax Reports FT.com: Ghosts of the brutal past

National Economic Trends Reuters: EBRD Russia investments at $4 bln in 2009

RIA: Kudrin: Russian economy must be more open to spur innovation Djnewswires: Russia Kudrin: Need Global Body To Oversee Financial Markets Reuters: Russia must look abroad for brains, techs-FinMin Dow Jones: Russia's Kudrin: Country Is Weak Link On Global Capital Mkt EasyBourse: Russia To Name Banks Organizing Sovereign Debt Issue Soon Interfax: Banks eligible to participate in Russian Eurobond offering to be known

in days – Kudrin The Moscow Times: Stimulus Gives Boost To Agriculture Output

Business, Energy or Environmental regulations or discussions Reuters: Russian markets -- Factors to Watch on Dec 8 Reuters: Russia in no hurry to transform VEB - Kremlin aide Reuters: VEB opposes hasty reform of Russian state corporations Bloomberg: Russian Stocks Cut to ‘Neutral’ at JPMorgan on Commodity Risks Reuters: UC RUSAL appoints Chinese non-executive directors Bloomberg: Rusal IPO Said to Be Postponed by Hong Kong Exchange (Update2) FT.com: Rusal put in tight spot by HK's delay RIA: NLMK receives US GAAP net loss of $79 mln in 9M09 Bloomberg: Hambro Eyes Place in Family Pantheon With Bet on Russian Gold Banking Business Review: IFC Partners With Association of Regional Banks of

Russia Dow Jones: EBRD May Invest Between $500 Million-$1 Billion In Russian High

tech Sector Nanoweek.com: Rusnano and European Bank for Reconstruction and

Development become co-investors Bloomberg: Mail.ru Picks Google

Activity in the Oil and Gas sector (including regulatory) Oil and Gas Journal: Putin: Turkmen gas line won't disrupt Russian-Chinese

cooperation Reuters: Total says Shtokman decision delayed until end-2010 Bloomberg: Lukoil Third-Quarter Net Falls 41% to $2.06 Billion Upstreamonline: Lukoil results miss forecast

Gazprom UkrainianJournal.com: President: Gazprom may seize Naftogaz if company goes

bankrupt RIA: Gazprom to invest $500 mln in India, Vietnam offshore fields The Times of India: Gazprom to get reprieve as govt eyes Russian oil Novinite.com: Russia Energy Giant Gazprom Set for Bulgaria South Stream

Talks Russia Today: Contracted gas volumes not trigger for new new Ukraine gas

dispute The Moscow Times: Gazprom: Shale Gas No Threat

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Full Text Articles

Basic Political DevelopmentsDecember 08, 2009 10:16

Interfax: Moscow press review for December 8, 2009http://www.interfax.com/newsinf.asp?id=134519

MOSCOW. December 8 (Interfax) - The following is a digest of Moscow newspapers published on December 8. Interfax does not accept liability for information in these stories.

VEDOMOSTI:

Rosneft (RTS: ROSN) will invest $6 million in the existing oil refineries over the next four years, the money will be used for reconstruction or construction of 53 facilities, the company said in a statement. The Samara group of plants bought by the state company at the sale of the Yukos (RTS: YUKO) assets will receive $2.4 billion: 18 billion rubles will be invested to modernize the Kuibyshevsky oil refinery, 26 billion rubles in the Syzransky oil refinery, and 25 billion rubles in the Novokuibyshevsky oil refinery. The purpose of investments is a coherent transition to the production of Euro-3, 4, 5 fuels, a company official said. Rosneft will use both its own and borrowed capital to fund these projects. ("Everything for oil refineries").

In 2010 Gazprom (RTS: GAZP) should spend almost 14.9 billion rubles ($505 million at the current Central Bank's rate) on the shelf blocks in India and Vietnam. The investment in the Bay of Bengal (India) should total 5.48 billion rubles, in Vietnamese PSAs - 9.43 billion rubles, a source close to Gazprom told Vedomosti. These data were confirmed by a company official. Requirements towards Gazprom are much tougher abroad than in Russia. The company cannot reduce spending on PSA; work should go according to schedule, otherwise it will face fines, the source close to the company told Vedomosti. ("More than at Shtokman ")

United Co. Rusal is unlikely to become a public company this year. The Hong Kong Stock Exchange's listing committee has again postponed a decision about listing Rusal shares, sources close to the company and officials from the banks preparing it for the IPO told Vedomosti. So far it is unclear when the matter will be reconsidered. Most likely, the IPO will be postponed until next year: the deal will not be closed before the holidays, both banks' officials said. ("Did not get a chance before New Year," also Kommersant, page 1 "Hong Kong is alive")

SIBUR Holding and its key shareholder, Gazprombank, are in talks over the purchase of the 50% stake in Biaxplen, a Sibur official told Vedomosti. In early December the holding company already announced about the purchase of another half of this company.

The Sibur official is not disclosing the deal scheme. His colleague from Gazprombank decline a request for comment. The whole Biaxplen could set the company back approximately $100 million, a source close to Sibur said. ("Biaxplen for Sibur").

KOMMERSANT:

The International Energy Agency (IEA) has submitted what would be for Gazprom a pessimistic forecast for gas markets growth in the EU and worldwide. If no post-Kyoto protocol is signed in Copenhagen, Russia will have to look for new markets. Gazprom's previous sale scenarios involving entry to the U.S. market, are also being ruined, with monopolies being inevitably compelled to look for sale markets in Southeastern Asia. Gazprom is hoping to remedy the situation by a massive construction of natural gas-fueled power plants. (page 11, "IEA assesses Russian gas excesses")

The government will be not considering the structural reform of the railway transport before the end of the year, such a decision was made at a meeting with Russia's first Deputy Prime Minister Igor Shuvalov. So far officials failed to reach a consensus on key issues, for instance, separating the infrastructure from transportation services and separating the locomotive haul service. But the Transport Ministry, one of the main critics of the target model of a freight services market developed by RZD, is already prepared for compromises. (page 11, "Railways postponed for the future")

Russian Technologies-controlled state transportation company Rossiya, the country's fifth largest freight company, has been recognized as one of the most troubled Russian airline companies. The carrier's debt is reaching 6 billion rubles. The transfer of Rossiya to Petersburg which has long wanted to get a share in the company could be a solution to the problem. But this could mean the end for Russian Technologies' ambitious project to create Rosavia, a new airline company. (page 1, "'Rossiya' is looking for its own path as always").

December 08, 2009 11:53

Interfax: Terror threat remains in Russia – FSBhttp://www.interfax.com/newsinf.asp?id=134568

MOSCOW. Dec 8 (Interfax) - The threat of terror attacks remains in Russia, Russian Federal Security Service Director Alexander Bortnikov said.

"The threat of terrorism continues to remain in Russia despite the creation of a nationwide counter-terrorism system, inflicting significant damage to the North Caucasus militants and overcoming the summer rise in terrorist activity in the country's south," he said at a meeting of the National Anti-terrorist Committee in Moscow on Tuesday (NAC).

Major infrastructure and busy public places are not sufficiently protected from terrorist attacks, Bortnikov said.

On December 2, the Russian president approved a list of instructions to the federal agencies giving them two weeks to prepare specific proposals to improve safety on trains, the FSB chief recalled.

Such instructions were given in the wake of the Nevsky Express explosion on November 27, which killed 26 people, and the attack on the Tyumen-Baku train in Dagestan.

"The measures must be aimed both at tighter security on transport infrastructure, increasing responsibility for breaching transport safety regulations, tougher punishment for illegally intervening in the functioning of the transport system, better insurance protection for passengers and the unification of carriers' responsibility for ensuring their safety," Bortnikov said.

December 08, 2009 10:43

Interfax: Modern threats, challenges can only be countered by working together – Patrushevhttp://www.interfax.com/newsinf.asp?id=134525

BEIJING. Dec 8 (Interfax) - Countries need to work together to combat new threats and challenges in the modern world, Russian Security Council Secretary Nikolai Patrushev said on Tuesday.

"Only the joint efforts by all nations can oppose the global challenges and threats," he said at the opening of the fourth round of the Russian-Chinese consultations on strategic security in Beijing.

"The world is at the stage of a deep transformation. Apart from the financial and economic turmoil, global growth continues to be threatened by regional and local conflicts, terrorism, trans-border crime, shortages of food and drinking water, and climate change," Patrushev said.

December 08, 2009 09:10

Interfax: Medvedev asks Federation Council to allow president to use troops abroadhttp://www.interfax.com/newsinf.asp?id=134506

MOSCOW. Dec 8 (Interfax) - Dmitry Medvedev has put forward a proposal with the Federation Council to allow the Russian President to make decisions about emergency deployment of the armed forces for the purpose of protecting the national and citizens' interests, maintaining international peace and security in accordance with the generally accepted principles and rules of international law, the country's international treaties and the said federal law.

The proposal was made on the basis of Article 102 part one paragraph "g" of the Russian Constitution and in accordance with the Federal Defense Law of May 31, 1996, the Kremlin press office said.

December 08, 2009 11:33

Interfax: Russia will retain nuclear status – RVSN commander (Part 2)http://www.interfax.com/newsinf.asp?id=134558

MOSCOW. Dec 8 (Interfax-AVN) - Russia will remain a nuclear power for the foreseeable future despite plans to reduce its stockpile, said Lt. Gen. Andrei Shvaichenko, Commander of the Russian Strategic Missile Troops (RVSN).

"The Russian Federation's nuclear status as a historical reality will remain for a foreseeable period until, as a result of the scientific and technical progress or changes in the nature of international treaties, it loses its deterring role," Shvaichenko told a military historical conference marking RVSN's 50th anniversary.

"I believe that in the short-term nuclear weapon will retain its leading role in ensuring national military security, and the reliance on nuclear deterrence should secure the necessary amount of time and balance of forces to form a new image of the Russian Armed Forces in general and raising them to a quality level," the general said.

Today, the RVSN has an important mission of maintaining Russia's defensive capability, the commander said.

"That the country has lived in peace for almost 65 years is one of the main results of the existence of the Strategic Missile Troops," the general said.

It is certainly important that Russia has retained its status of a nuclear power after the collapse of the USSR, he said.

"Keeping the nuclear potential of the Strategic Missile Troops enabled Russia as a successor to the USSR to consolidate its status of a nuclear power and thus ensure, without any exaggeration, both European and global stability worldwide," the commander said.

MyNews.in: PM wraps up three day visit to Russia, 6 deals inkedhttp://www.mynews.in/News/PM_wraps_up_three_day_visit_to_Russia,_6_deals_inked_N32176.html#

Posted On: 08-Dec-2009 12:39:48 By: Jagson PaulThe Prime Minister Manmohan Singh will return from Moscow on Tuesday after his three day visit to Russia, six agreements have been signed during PM’s visit which include crucialagreement on cooperation and use of Atomic Energy.

Six agreements have been signed during Prime Minister’s visit which include crucial agreement on cooperation and use of Atomic Energy for peaceful and development purposes and three other defece pact. The agreements, signed after the Annual Summit meeting between Prime Minister Manmohan Singh and Russian President Dmitry Medvedev at the Kremlin in Moscow this afternoon, also includes signing of a pathbreaking agreement for expanding civil nuclear cooperation between the two countries that goes ''far beyond even the 123 agreement'' inked by India with the US.Singh also addressed India Russia CEOs Council meeting and termed it important mechanism for boosting private sector cooperation between the two countries. Meanwhile, the scheduled closing Ceremony of the Year of India celebrations was cancelled as a mark of respect for the victims of the fire tragedy in Russian city Perm.  In the last leg of the visit, Prime Minister will interact with prominent intellectuals and scholars from Russia before his departure for India. The agreement will give New Delhi the right to reprocess spent fuel, taking the pact ''far beyond the 123 agreement'' inked with the US.  The pathbreaking civil nuclear deal signed between the two countries commits Russia to transfer enrichment and reprocessing technologies to India.  It also ensures uninterrupted uranium fuel supplies from Russia to nuclear reactors in India. ''The agreement expands civil nuclear cooperation between India and Russia beyond just supplies of nuclear reactors, to cover research and development and an entire gamut of issues in nuclear cooperation,'' the Prime Minister told reporters at a joint press conference with Medvedev after the signing of the agreements. The two countries also signed an agreement to cooperate in the peaceful use of nuclear technology. The two countries also signed a pact on increasing defence cooperation between them. The agreement, that runs from 2011 to 2022, commits Moscow to offer sales support to New Delhi for the Defence equipment it sells to India. 

An agreement for cultural exchange between the two countries till 2012 was also signed. They also inked a deal for cooperation between the two countries on the use of atomic energy for peaceful purposes. On the occasion, Dr Singh and Medvedev also adopted a joint declaration for deepening of the strategic partnership between India and Russia to meet global challenges. Dr Singh said, ''We welcome greater Russian participation in the expansion of our nuclear energy programme. The successful conclusion of negotiations on an inter GovernmentalAgreement on cooperation in the peaceful uses of atomic energy is a major step forward in strengthening our existing cooperation in the field.''  On the Defence agreements signed between the two countries, the Prime Minister said, ''The agreements that we have signed in the field of defence cooperation, in particular on the programme for military and technical cooperation for the period 2011 to 2020, will provide a basis for an extensive and broad based cooperation in this vital area.'' India's ties with third countries not at cost of Russia: PM Seeking to take forward the strategic partnership to new heights, Prime Minister Manmohan Singh on Monday made it clear that India's relations with third countries will never be at the cost of "time-tested ties" with Russia. After a one-on-one meeting with Russian President Dmitry Medvedev at the Kremlin which he described as "very productive", Singh said, "a stronger Russia is important for world peace." Both India and Russia have a joint role to play to deal with regional and international issues, including steps for revival of global economy, terrorism and reforms of international institutions, Singh said in his opening remarks before the two sides got into delegation-level talks. Noting that he was visiting Russia for the second time this year, the Prime Minister said this showed the importance attached by India in taking forward the bilateral relations in various spheres. "Our relations with third countries will never be at the cost of our time-tested relationship with Russia," he said. He said Indo-Russia strategic partnership is a "unique" partnership, firmly rooted in mutual interest and confidence and a shared vision of a multi-polar world. In his remarks, the Russian President said the agreements finalised by the two countries reflected the strategic partnership of a "great variety". 

The Russian President noted that Indo-Russian trade has increased by 8 percent despite a global slowdown and said this augmented well for the improvement of bilateral ties in this area. "In spite of the crisis our trade turnover has grown by 8 percent in first 9 months of 2009, I hope by the end of the year it would further grow," theRussian President said.  Singh shared the sentiments of Medvedev on this issue. Singh began his Moscow schedule on Monday with the laying of wreath at the Tomb of Unknown Soldier with eternal flame. During their informal talks on Sunday night, Singh said, "I want to assure you that relations with Russia are most important and we have no such relations with any other country of the world. On his part, Medvedev said, "Every visit of the Indian Prime Minister is always a big event." "It can only be like this because Russia and India are good friends," Medvedev said. Medvedev identified defence, energy and knowledge based industry as the key areas of Indo-Russian cooperation.

FT.com: Russia to supply India with nuclear reactorshttp://www.ft.com/cms/s/0/86b6465c-e398-11de-9f4f-00144feab49a.html?nclick_check=1

By James Lamont and Alexandra Stevenson in New Delhi

Published: December 8 2009 02:00 | Last updated: December 8 2009 02:00

Russia became the latest country to strike a civil nuclear deal with energy-hungry India yesterday when it agreed to supply reactors to Asia's thirdlargest economy.

International power companies from Russia, France, the UK, the US and Canada are flocking to India seeking opportunities to help one of the world's fastest- growing economies meet its energy demands. The contribution of nuclear energy in India is forecast to rise from 4,000MW to as much as 470,000MW over the next 40 years.

The Russian deal follows a civil nuclear agreement with the US at the end of last year that helped clear the way for India to buy atomic power plants, technology and fuel from the nuclear club of nations.

India, officially a nuclear weapons power since 1998, had been denied access to civilian nuclear technology for more than 30 years

since its test of a nuclear device in 1974 and its refusal to sign the 1968 non-proliferation treaty.

Manmohan Singh, India's prime minister, told reporters at the Kremlin after talks with Dmitry Medvedev, Russia's president: "Today, we have signed an agreement which broadens the reach of our co-operation beyond the supply of nuclear reactors to areas of research and development and a whole range of areas of nuclear energy." The two leaders also struck defence accords including a partnership to produce a multipurpose transport aircraft.

New Delhi and Moscow have been close partners since India's independence 62 years ago. During this period, Russia became the largest supplier of military hardware to India. But it is energy that Mr Singh has described as the greatest "emerging dimension" of the relationship.

Russia is already building two nuclear power plants in Kundankulam in the southern Indian state of Tamil Nadu under a 1988 agreement. These are expected to start producing electricity next year.

India operates 17 atomic power plants, and Mr Singh envisages expansion of capacity in the coming decades to help remedy the country's power deficit and sustain economic growth.

Russia faces competition from the US for India's nuclear power and arms supply. The nuclear deal between Washington and Delhi has helped transform relations between the two democracies after decades of frostiness during the cold war. The increasing warmth was on show this month when Barack Obama, US president, hosted Mr Singh at the White House.

But some believe US companies are in danger of falling behind in the race for lucrative contracts as India shops for nuclear reactors and dual-use technology with companies such as Russia's Rosatom and France's Areva.

Yet American industry executives, visiting New Delhi yesterday, said the market was large enough for several suppliers. "India is looking for as many fuel sources as they can get," Daniel L. Roderick, senior vice-president at GE Hitachi Nuclear Energy, the engineering group, said.

Reuters: Russia, India PM talks highlight BRIC differenceshttp://in.reuters.com/article/topNews/idINIndia-44545220091207

Tue Dec 8, 2009 3:50am IST

By Gleb Bryanski

MOSCOW (Reuters) - A meeting between the Russian and Indian prime ministers in Moscow on Monday threw an awkward light on the contrasting fortunes of the two members of the BRIC grouping, where Russia is increasingly seen as a laggard.

Despite their differences, the two countries managed to set a number of agreements aimed at sharing technology and expertise that should promote their goal to grow trade to $20 billion by 2015 from $6.9 billion last year.

Russian Prime Minister Vladimir Putin, who presides over an economy expected to contract by over 8.5 percent in 2009, looked visibly uneasy as his counterpart Manmohan Singh told him how the Indian economy was roaring ahead.

"The Indian economy, despite the global slowdown, has been growing at a rate of 6.7 percent and this year it will be growing at a rate of about 7 percent," Singh told the meeting attended by Russian and Indian officials and businessmen.

"Our savings and investment rates point to our ability to go back to the growth path of 9 percent per year in about two years' time," Singh said, adding that India was "one of the fastest growing consumers" of Russia's vast energy resources.

Putin countered Singh saying Russia will push inflation back into single digits in 2009 and referred to month-on-month GDP growth, avoiding mention of Russia's dismal full-year economic performance.

The Russian leader has steered the country's energy-focused economy through its worst crisis in a decade, spending cash accumulated during the oil boom on stimulus policies and increased social benefits aimed at maintaining political stability.

But Russia is the only of the major emerging economies in the BRIC group, along with Brazil and China, that expects to see its GDP contract this year, prompting calls from some economists to drop the 'R' from the popular acronym.

SINGLE DIGITS

Despite relief from higher oil prices, Russia's main export commodity, the industry is stagnating, domestic demand remains subdued and the latest data showed unemployment edging up again.

Putin is seeking to diversify Russia's economy away from its oil sector by reviving industries where it traditionally had a competitive advantage, such as nuclear power or defense .

Talks with President Dmitry Medvedev earlier on Monday produced an agreement for Russia and India to cooperate in the civilian use of nuclear technology. They also signed agreements on arms sales.

Putin said Russia welcomed the participation of India's ONGC, a partner in the Exxon-led Sakhalin-1 oil and gas consortium, in oil and gas exploration projects in the Yamal peninsula and Tomsk region.

"Indian companies have the technologies and the ability to invest in both upstream and downstream activity," Singh said, adding that the two countries will aim to boost mutual trade to $20 billion by 2015 from $6.9 billion last year.

Singh offered to share Indian expertise in the production of generic drugs, seen as a potential growth sector in Russia, and welcomed investment from Russian companies specialising in infrastructure, engineering and construction.

Russia hosted BRIC's first summit in the city of Yekaterinburg in June claiming political leadership in the group. But the four countries have failed to come up with a comprehensive common agenda.

(Reporting by Gleb Bryanski; Editing by Carole Vaporean)

PTI: Russia supports India's membership in Asia-Pacific Economic Cooperation

http://www.dnaindia.com/world/report_russia-supports-india-s-membership-in-asia-pacific-economic-cooperation_1321370

PTITuesday, December 8, 2009 10:44 ISTMoscow: Reflecting its close ties with India, Russia is pushing for the country's inclusion in Asia-Pacific Economic Cooperation (Apec) to enhance the effectiveness of the regional grouping and is also supporting New Delhi's full membership in the Shanghai Cooperation Organisation.

A Joint Declaration adopted at the end of the summit talks between prime minister Manmohan Singh and Russian president Dmitry Medvedev said Russia supported India's full membership in the Shanghai Cooperation Organisation (SCO).

India is currently an observer in this grouping and Singh had participated in its meeting at Yekaterinburg in Russia in June this year. "The Russian side supports India's full membership in the SCO," the declaration said.

"The Russian side appreciates the level of representation at the level of prime minister from India at the summit meeting of the SCO at Yekaterinburg," it said.

Russia also voiced confidence that "engagement" of India in the Apec will enhance capacity-building and effectiveness of its mechanism and encourage enhanced trade and investment cooperation in the region.

"Russia supports India's membership in the Apec and will work towards lifting the moratorium on expanding Apec's membership," the joint declaration said.

Russia's push for India's membership in Apec and SCO comes on the back of Russia's fresh backing for India to become a permanent member in an expanded UN Security Council.

"Russia considers India a deserving and strong candidate for a permanent seat in an an expanded Security Council," the joint declaration said.

APEC is a forum of 21 Pacific Rim countries, including Australia, China, Japan, Russia, South Korea and the US, and its main objective is to enhance economic growth and prosperity in the region and to strengthen the Asia-Pacific community.

The Shanghai Cooperation Organisation (SCO) is an intergovernmental mutual-security organisation set up by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan in 2001 in Shanghai.

NNN: India-Russia civil nuclear pact assures fuel supplies even after terminationhttp://netindian.in/news/2009/12/08/0004334/india-russia-civil-nuclear-pact-assures-fuel-supplies-even-after-termination

NetIndian News Network New Delhi, December 8, 2009 The agreement signed by India and Russia on civil nuclear energy cooperation has an upfront consent for reprocessing of spent fuel and also includes a provision that any termination will be without prejudice to ongoing contracts and fuel supply obligations.The agreement between the two Governments on Cooperation in Peaceful Uses of Atomic Energy was signed in Moscow yesterday after talks between visiting Prime Minister Manmohan Singh and Russian President Dmitry Medvedev at the Kremlin.Foreign Secretary Nirupama Rao told the media in Moscow later yesterday that the agreement also included provisions which were common with other agreements such as application of International Atomic Energy Agency (IAEA) safeguards, retransfer mechanism and non-interference in India's unsafeguarded programme.She said the agreement marked the culmination of expert-level negotiations, which were going on for the past few months.She said the agreement was a broad-based one, and listed several areas of cooperation, including research and development, construction of nuclear power plants, supply of uranium, and so on.India and Russia had been cooperating in this area under the Inter-Governmental Agreement (IGA) of 1988, as part of which two 1000 MW nuclear power units are being

set up at Kudankulam in Tamil Nadu. In December last year, the two countries agreed on four additional units at Kudankulam.Recently, India agreed to allocate one more site at Haripur in West Bengal for nuclear reactors supplied by Russia.Three of the agreements signed yesterday between the two countries related to the area of defence, including the extension of the Programme for Military and Technical Cooperation (MTC) for the period 2011-20.Ms Rao said the agreement would help enhance the operational capability of the Indian defence forces in the net decade by providing various defence equipment and systems. It will also facilitate capacity development of the Indian defence industry.She said the agreement provided for acquisition, licensed production, upgrades and modernisation of defence equipment as well as the development of new and advanced weapon systems.The two countries signed an agreement on After Sales Support for the Russian Arms and Military Equipment supplied to India. This will facilitate timely and adequate supply of spares and services for maintaining a high level of readiness and integrated maintenance of Russian-made military equipment supplied to India.The two sides also signed a protocol to their agreement on Cooperation in Development and Production of Multi-Role Transport Aircraft of November 12,2007. This is an amendment to the existing agreement.The other agreements signed yesterday include a programme of cultural exchanges between the two countries for the years 2010-12. It will ensure continuation of exchanges between the two Governments in the fields of art and culture and intensification of people-to-people contacts.They also signed a Dollar Credit Line Agreement between Vnesheconombank (Bank for Development and Foreign Economic Affairs) of Russia and the Export Import Bank of India. It is intended to extend a line of credit of $ 100 million by EXIM Bank to Vnesheconombank for financing export of Indian equipment, technology, goods and services to Russia.Ms Rao said Dr Singh's three-day visit, ending today, had demonstrated in ample measure the depth and the strong vitality of the India-Russia Strategic Partnership."It has been a most successful and very productive visit. The discussions held by Prime Minister with President Medvedev and Prime Minister Putin have been substantive and detailed, and the leaders have focused on priority areas of the partnership and how we intend to take these forward through intensive efforts by both sides in the months ahead," she said.She said the agreements signed during the visit reflected the great depth of the relationship, its stability and maturity, and the mutually beneficial nature of the bilateral relations. "Ours is a partnership that is multi-dimensional in the true sense. It is a partnership of strategic importance, and it is a partnership that works for the development and progress of the peoples of both countries, and for peace and stability in the region and the world," she said.The Foreign Secretary said the Joint Declaration issued by the two countries yesterday on deepening their Strategic Partnership to meet global challneges encapsulated a shared

vision on many global issues and reflected the desire of both sides to take their relationship to the next level.

Business Standard: Take Indo-Russia trade ties to new high: PM tells businessmenhttp://www.business-standard.com/india/news/take-indo-russia-trade-ties-to-new-high-pm-tells-businessmen/80235/on

G Sudhakar Nair/PTI / Moscow December 08, 2009, 13:06 ISTAs India and Russia set an ambitious trade target of $20 billion by 2015 from the existing $seven billion, Prime Minister Manmohan Singh has asked industry captains from both sides to work for enhancement of economic relations to take them to the level of close political ties shared by the two countries.

"India and Russia are strategic partners and we have a broad-ranging relationship. However, our bilateral trade and investment cooperation have not kept pace with our close political ties. This is despite the fact that there are strong complementarities between our two trillion-dollar-plus economies," Singh said addressing Indo-Russia CEOs Council.

Assuring full support to the Council in this regard, he said there may be other areas for cooperation and that the industry captains should take the lead.

India expects greater trade in specific areas like nuclear energy, IT, pharma and infrastructure with Russia, Singh, who is on a three-day official visit here, told the Council last night.

Rough diamonds is another area where India expects to convert adhoc contacts with Russian industry into long-term arrangements, he said.

"The energy sector illustrates the strong complementarities between us - Russia is a major producer of energy, and India is one of the fastest growing consumers...," he said.

India is a participant in the Sakhalin-I oil and gas fields in Russia and state-run ONGC Videsh Ltd recently acquired Imperial Energy that has assets there. "This needs to be carried forward," Singh said.

"India can be an ideal partner for Russia in the pharmaceuticals sector, which has been identified by Russia as a priority area. India has already emerged as the most reliable supplier of quality generic drugs to Russia. We should consolidate our cooperation in this sector, including through the establishment of joint ventures," Singh said.

He also said offshoring of jobs to India has helped European and American companies save costs and a collaboration in this sector could prove beneficial to Russia.

"There are significant opportunities for Russian companies in India particularly in the

area of infrastructure, construction and engineering services. We invite them to invest much more in India," he said.

India had estimated over $500 billion as the investment need in its infrastructure sector by the end of its 11th Five-Year Plan in 2012.

Bloomberg: India, Russia Agree to Boost Atomic Power Cooperation (Update1)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ao0b18Y5FbFQ

By Lyubov Pronina and Yuriy Humber

Dec. 8 (Bloomberg) -- Russia and India agreed to increase nuclear energy cooperation, boosting Rosatom Corp.’s prospects as it vies with international rivals to expand the South Asian nation’s atomic capacity a planned 10-fold by 2020.

The deal, signed yesterday in Moscow, will allow Russia’s state nuclear company, to negotiate on a price for additional reactors at the Kudankulam site in southern Tamil Nadu state, where the first two units are under construction. Rosatom can also study new sites for nuclear plants.

Rosatom is competing with Areva SA, the world’s biggest maker of reactors, Westinghouse Electric Co. and Alstom SA to build nuclear plants after the 45-nation Nuclear Suppliers Group last year lifted a three-decade global ban on trading in atomic equipment and fuel with India. Asia’s third-largest energy user plans to increase nuclear generation to 40,000 megawatts in the next decade from around 4,000 megawatts currently.

“Russia has been very active in the past in India so that certainly gives them a strong advantage,” said Rob Gout, chief operating officer at PM Dimensions, a Mumbai-based provider of nuclear engineering and training services. “There’s space for everyone to play; Areva, Westinghouse, Russians. There’s so much work that we don’t think any one company could handle all of it.”

Sergei Kiriyenko, head of Rosatom, and Srikumar Banerjee, Chairman of India’s Atomic Energy Commission, signed an agreement in Moscow in the presence of Russian President Dmitry Medvedev and Indian Prime Minister Manmohan Singh.

“Good Experience”

“The agreement opens opportunities for cooperation in the future,” Medvedev said yesterday at a televised press conference from the Kremlin. The two countries have “good experience” in jointly building the first two reactors at the Kudankulam power plant and may extend the partnership to other sites, he said.

Russia is seeking to book more sites for its nuclear reactors in India since any one plant tends to operate units from only one vendor. Rosatom can build more reactors at the Kudankulam site and start developing the Haripur site in West Bengal state, Singh said. The cooperation agreement will expand beyond reactor building to research and development, he said.

Areva said Oct. 14 that an agreement with Nuclear Power Corp. of India to build a plant in the western state of Maharashtra, home to the commercial hub of Mumbai, may be signed early next year before approvals are received.

Areva, Alstom

Areva will initially supply the Indian state-run monopoly with two 1,650-megawatt reactors for the project, the first large-capacity plant to be built after a global ban was lifted, according to the preliminary agreement between the companies in February. The final accord will be signed after getting French parliamentary and regulatory approvals.

Alstom, the world’s third-largest power plant builder, plans to set up a venture with Nuclear Power and Bharat Heavy Electricals Ltd. to supply equipment in India, three people familiar with the matter said on Nov. 20.

Westinghouse Electric, a unit of Toshiba Corp., may sign a reactor accord with Nuclear Power Corp. of India next year, Robert Pearce, director of international customer project development, told reporters in New Delhi Dec. 7.

To contact the reporters on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net; Yuriy Humber in Moscow at yhumber@bloomberg.net

Last Updated: December 8, 2009 00:17 EST

Itar-Tass: Putin arrives in Sverdlovsk region, to tour three def plantshttp://www.itar-tass.com/eng/level2.html?NewsID=14616091&PageNum=0

08.12.2009, 04.04

YEKATERINBURG, December 8 (Itar-Tass) - Prime Minister Vladimir Putin has arrived in Sverdlovsk Region, where he will carry on a series of meeting in Nizhny Tagil later Tuesday on the development of the defence-industry complex of the Russian Federation (RF).

The Head of Government is to hold a meeting on the provision of the RF Armed Forces with modern specimens of armour and automotive hardware and tour three defence enterprises of the region: the Nizhny Tagil Institute for the Testing of Metals, the Uralvagonzavod machine building company, and the Ural railway engineering plant.

The Premier is also to meet with Sverdlovsk Region Governor Alexander Misharin.

Interfax: Russian govt drafting measures to increase responsibility on businesses – Putinhttp://www.interfax.com/newsinf.asp?id=134579

PERM. Dec 8 (Interfax) - The Russian government will soon submit proposals to change the Code of Administrative Offenses and the Penal Code to increase businesses' responsibility, Russian Prime Minister Vladimir Putin said.

"We must perfect the existing legislation. Very soon proposals will be made to change the Code of Administrative Offenses and the Penal Code," Putin said at a meeting in Perm last night.

As far as relations with the business sector are concerned, "this is some vicious cycle altogether for us," he said.

"You give more rights to controlling bodies - corruption rises; you start reducing pressure on the business sector - this instantly results in neglect and lack of discipline and the so-called optimization of spending, primarily, on safety," Putin said.

"Eventually, this affects people's health and even lives," he said.

Itar-Tass: PT med institutions lacked sufficient drugs, eqt—Putinhttp://www.itar-tass.com/eng/level2.html?NewsID=14615985&PageNum=008.12.2009, 02.22

PERM, December 8 (Itar-Tass) - The medical institutions of the Perm Territory lacked a sufficient amount of therapeutic drugs and equipment in order to treat people even in ordinary conditions, Prime Minister Vladimir Putin noted.

Speaking at a meeting with officials here on Tuesday, Putin said, "According to reports of the Ministry of Health and Social Development, the health care system of the Territoty lacked even what it should have had".

RIA: Vladimir Putin blasts fire safety measures in Russia http://en.rian.ru/russia/20091208/157148520.html

03:3008/12/2009

PERM, December 8 (RIA Novosti) - Russian Prime Minister Vladimir Putin blasted fire safety measures in Russia calling them "insufficient and ineffective."

Putin held a meeting early Tuesday in the Russian Urals city of Perm, where last Saturday's horrific blaze in Lame Horse nightclub killed 113 people and injured over 120.

"We must admit that the current measures are insufficient and ineffective," Putin said. "The tragic incident in Perm has in a violent manner reminded us that our fire safety is far from successful."

Russia has an appalling fire safety record. According to the country's emergency services, 15,165 people died in fires across the country in 2008, including 584 children. On average, 42 people die daily in Russia in fires. In the U.S., with a population over twice as large, the figure is around 3,400 deaths a year.

"This incident reminds of other similar emergency situations. The Republic of Komi, where tens of elderly people died, the incident in the Arkhangelsk Region, where 16 people, including children, were killed in a fire," Putin said.

A fire at a three-story residential building in the village of Molodezhny, in Russia's southern Astrakhan Region, killed 16 people in mid-February this year. Just a week earlier, 23 mostly ederly people died in a fire that destroyed a wooden care home in the republic of Komi in northwest Russia.

Russian President Dmitry Medvedev instructed then his administration to carry out comprehensive checks nationwide to uncover possible violations of fire safety and to look into general living conditions at care facilities.

Reuters: Russia's Putin lambasts officials after disco firehttp://in.reuters.com/article/worldNews/idINIndia-44546820091208

Tue Dec 8, 2009 7:07am IST

By Gleb Bryanski

MOSCOW (Reuters) - Russia's Prime Minister Vladimir Putin lambasted fire and health officials on Tuesday in a city where 113 people died in a weekend nightclub inferno and promised compensation to victims' families.

Some mourners outside the Lame Horse nightclub in the city of Perm in the Urals mountains, 1,150 km (720 miles) east of Moscow, alleged that corruption allowed the nightclub owners to ignore fire safety rules for years.

Putin, who arrived in Perm for an emergency meeting with officials late on Monday night and laid flowers at the entrance to the nightclub, said a state commission that included Perm's chief fire inspector had certified the nightclub in 2002.

"According to the investigators, the building was pretty much in the same shape when it burned," Putin said in remarks posted on the Russian government's website.

He said fire inspectors had issued a warning to the club's owners about a year ago but failed to check if there was any action taken on their warning.

"Such an attitude can be qualified as negligence, at least," Putin said. "Possibly there were other motives for the lack of action by state officials - investigators should thoroughly check all possibilities."

The fire, Russia's worst in decades, began when sparks from fireworks ignited wicker coverings on the ceiling of the packed nightclub, provoking a stampede as partygoers rushed towards a single narrow exit.

Police have arrested the owner and two managers at the club on charges of manslaughter and breaches of fire safety. Charges have also been brought against the man who organised the fireworks, the prosecutor's office said on Monday.

VICIOUS CIRCLE

More than 15,000 people die each year in fires across Russia and senior officials acknowledge that fire inspections are routinely used as a way to demand bribes from establishments rather than enforce safety rules.

Russia has sought to ease some of the excessive regulation for small and medium businesses in recent months to help the economy through its worst economic crisis in a decade but Putin indicated the change could be premature.

"We are in a vicious circle. When you give more rights to controlling bodies you get corruption. As soon as the burden is eased you get negligence and cost optimisation, first of all on safety," Putin said.

Putin recalled other major fires, including one in a retirement home in northern Russia in January in which 23 people died.

Russia declared Monday a national day of mourning and Putin cancelled an evening event in the Bolshoi Theatre he had been due to attend with Indian Prime Minister Manmohan Singh to fly to the grief stricken city.

He said hospitals in Perm had not been able to treat the victims properly.

"I do not want to rush to hasty conclusions ... but according to the Health Ministry's reports the hospitals that they checked are in a dire state and they could not find even the essential medications there," Putin said.

On Monday Putin visited some of the 121 people injured in the fire who were airlifted to Moscow for treatment. In Perm Putin pledged 500,000 roubles ($17,000) from federal and local budgets to the victims' families in compensation.

(Writing by Gleb Bryanski; editing by Philippa Fletcher)

Ynetnews: Israeli charged with negligence in Russian nightclub casehttp://www.ynetnews.com/articles/0,7340,L-3816778,00.html

Israeli co-owner of club in which blast killed 117 Friday night to be charged along with three others

Naama Lanir and AP Published: 12.08.09, 10:53 / Israel News Russia's Prosecutor General filed Monday an indictment against four people suspected of causing a giant explosion that killed 117 people in a nightclub late Friday night. One of the suspects possesses an Israeli passport.About 30 of the 120 hospitalized remain in critical condition after the blaze engulfed a nightclub in Perm, sparked by an indoor fireworks display. Four additional victims died Monday night.  Authorities in Russia say the fire was sparked by an electrical malfunction. The prosecution suspects negligence and has indicted the nightclub's co-owner – the Israeli Anatoly Zak – its manager, entertainment director, and the head of a fireworks company whose show started the blaze.  A memorial ceremony was held Monday to commemorate the victims of the fire. President Dmitry Medvedev appeared angry with the club's owners during a consultation on the incident, some of which was aired on national TV.  Medvedev said those responsible had "neither brain nor conscience", and added that "we must think of a legislation that pertains to incidents of this kind, which must be tougher, and the responsibility for neglecting to follow fire codes must be heavier as well".  Enforcement of fire-safety standards is infamously poor in Russia and there have been several catastrophic blazes at drug-treatment facilities, nursing homes, apartment buildings and nightclubs in recent years. In general around 18,000 people die annually in fires in the country. Andrei Nikitin, a local journalist, told Ynet this week that owners of the club had received orders to fix certain failures within a year, but did not do so. A return inspection was scheduled to take place Monday.  Nikitin, who frequents the club, said renovations were done over the summer but that they did not improve safety conditions, and may have even worsened them. "The ceiling is made of plastic, fabric, straw, and wood," he explained, all materials which cause a fire to spread rapidly.

RIA: Families of Perm nightclub blaze victims to get $16,700 each http://en.rian.ru/russia/20091208/157147693.html

01:3508/12/2009

Families of those killed in a horrific nightclub fire in Russia's Urals last week will get a compensation of 500,000 rubles ($16,700) each, the Russian prime minister said on Tuesday.

Vladimir Putin is currently holding a session in Perm, where Saturday's blaze in Lame Horse nightclub killed 113 people and injured over 120.

He said that the Russian federal budget has allocated each family 400,000 rubles and the regional budget 100,000 rubles.

"Therefore, the total sum [of the compensation] for the each killed [in the blaze] amounts to a half a million rubles," Putin said.

He also said that the families of those injured in the fire and remaining in hospitals will each receive a compensation of 400,000 rubles ($13,400). The sum, he said, consists of 300,000 rubles allocated from the federal government and 100,000 rubles provided by the regional authorities.

The death of two more people in hospital on Monday brought the death toll from the Saturday's blaze to 113. Over 120 people are still being treated in hospital, with 28 of them in a critical condition, according to the Russian Health Ministry.

Russia observed a national day of mourning on Monday for the victims of the nightclub fire. Flags were flying at half-mast and memorial services were being held.

PERM, December 8 (RIA Novosti)

Xinhua: Russian nightclub fire death toll revised up to 118http://news.xinhuanet.com/english/2009-12/08/content_12612182.htm

2009-12-08 16:53:59

MOSCOW, Dec. 8 (Xinhua) -- The death toll in the nightclub fire in Russia's Ural city of Perm has risen to 118, while about 120 others remain hospitalized, a local branch of the Russian Emergency Situations Ministry said on Tuesday.

    The toll was revised up after another five people died in hospitals, said a spokesperson for the regional emergencies ministry.

    In addition, 100 people were airlifted to hospitals in Moscow, St. Petersburg and Chelyabinsk, the spokesperson said, adding that all of those injured were in critical condition.

    Russia held a national day of mourning on Monday to commemorate the victims in the tragedy.

    Prime Minister Vladimir Putin, who flew to Perm to lay flowers in tribute, said families of the dead would receive 500,000 rubles (about 17,240 U.S. dollars) in compensation and the injured would receive 400,000 rubles (about 13,790 dollars).

    Flames sparked by indoor fireworks ripped through the Lame Horse nightclub in Perm overnight Saturday when about 230 people were celebrating the venue's eighth anniversary.

    Russian prosecutors said on Monday the four suspects in the blaze had been charged.

    Perm, a city on the Kama River some 1,200 km east of Moscow, is the capital of Russia's Perm region.

RIA: Russians less focused on climate change than other Europeanshttp://en.rian.ru/Environment/20091207/157144550.html

19:5807/12/2009

Russians are less concerned about the climate change problem than other European nations, according to a global poll by GlobeScan for the BBC.

The poll was carried out between June and October among some 24,000 respondents in 23 countries. The results show that only 46% of Russians see climate change as a serious problem. The figure is less than in the U.K. (59%), Germany (61%), France (65%), Italy (68%), Spain (77%) and Turkey (81%).

The average figure for the 23 countries viewing climate change as a serious problem was 64%, with residents of Brazil being the most concerned (86%).

"The poll shows strong worldwide support for action on climate change, in spite of the recession," said GlobeScan chairman Doug Miller.

Slightly more than a half of Russians (54%) are convinced that the government should support climate change projects even if it would damage the country's economy. The average figure is 61%.

People in China and the U.S., which release the largest amount of carbon dioxide into the atmosphere, have different points of view on the issue. While 89% of the Chinese are ready to support state investment into climate change efforts, only 52% would support the move in the U.S.

Only 36% of Russians say Russia should play 'a leading role in setting ambitious targets to address climate change" at Copenhagen, and 36% are convinced that the government

should "adopt a more moderate approach and support only gradual action." Some 7% of respondents in Russia want their government to oppose any agreement.

The 15th UN climate change conference, a result of two-year international talks on a binding treaty to cut the global emission of greenhouse gases, opened on Monday in Copenhagen.

During the two weeks of talks the governments are to agree on three main climate change points, including urgent measures to tackle climate change, obligations to cut emissions of greenhouse gases and the general view on cutting harmful emissions.

The conference is expected to agree a new international document to replace the Kyoto Protocol on climate change, some elements of which expire in 2012. The document is expected to be ready by summer 2010.

Some experts believe the summit, which puts together about 15,000 participants from 192 countries, is more likely to just outline principles and directions for a post-Kyoto framework.

LONDON, December 7 (RIA Novosti) 

The Moscow Times: Climate Breakthrough Sought http://www.themoscowtimes.com/business/article/climate-breakthrough-sought/391067.html

08 December 2009By Maria Antonova

The Copenhagen climate change talks kicked off on Monday, and while Russia’s leaders are not expected to attend, the country’s delegation hopes to reach a “political breakthrough” in the coming days.

“For [a new greenhouse gas] regime to be effective, it should be universal and encompass all spheres,” said Oleg Shamanov, the Foreign Ministry’s point man for environmental issues.

“All countries should be part of it, including the main emitters from both developed and developing countries,” Shamanov said Monday, Itar-Tass reported.

The delegation is headed by former Federal Meteorological Service head Alexander Bedritsky, who was appointed late last month as presidential adviser on climate change.

Conference participants are expected to consider a draft treaty this week, while key decisions would be made by heads of government and ministers, most of whom will be attending the conference next week.

First Deputy Prime Minister Igor Shuvalov may come to Copenhagen next week “if problems arise, for example concerning support of developing countries by developed countries,” a source in the government told Vedomosti.

The presence of Russia’s leaders is not crucial for the talks, since “Russia is not viewed as a major financial donor” like France or the United States, World Wildlife Fund climate expert Alexei Kokorin said. If the decision in Copenhagen is to extend the talks, Bedritsky’s diplomatic presence would be sufficient.

The Kyoto Protocol, adopted in 1997, sets its benchmark at emission levels in 1990, but Russia’s emissions fell about 30 percent between 1990 and 2000, leaving it with a surplus of carbon credits. But fears that Russia will flood the market with its surplus credits are unfounded as there is already a plentiful supply on global markets, Kokorin said, speaking by phone from the conference.

Less than half of Russians consider climate change a serious problem, according to a survey that GlobeScan conducted for the BBC. Forty-six percent of Russian respondents said climate was a “very serious” issue — the lowest proportion among the seven European countries in the poll, slightly higher than the 45 percent figure shared by the United States and India. A total of 23 countries were polled, according to the report published Monday.

Fifty-four percent of respondents think that the government should allocate money to fight climate change, and 36 percent think Russia should address climate change quickly at the Copenhagen summit. Seven percent say they don’t want an international agreement at all.

The conference opened Monday after the vice chairman of the UN’s International Panel on Climate Change Jean-Pascal van Ypersele alleged that Russian hackers were behind last month’s leaked e-mail correspondence among the world’s leading climatologists. The e-mails, which suggested that some scientists modified their data in order to get results that strengthened the case for global warming, were retrieved by a Russian server.

“It’s very common for hackers in Russia to be paid for their services,” van Ypersele said over the weekend. “It’s a carefully made selection of e-mails and documents that’s not random. This is 13 years of data, and it’s not a job of amateur,” he said.

December 8, 2009Politicus

NY Times: A Heads-Up on Russia's Role in Arctic http://www.nytimes.com/2009/12/08/world/europe/08iht-politicus.html?_r=1

By JOHN VINOCUR

It doesn’t seem like anyone took much notice, but last week marked the 50th anniversary of an exemplary international success — the signing of the Antarctic Treaty that turned the global Deep South into a demilitarized zone “forever to be used exclusively for peaceful purposes.”

Exemplary, yes, in the sense that the United States, the Soviet Union, and dozens of other eventual signatories came to an agreement in the middle of the Cold War to rule out pushing and shoving over a potentially strategic area. It’s a commitment the world has adhered to for a half century.

The example may stop there. When it comes to the High North — and the prospect of the Arctic with its sea lanes and vast energy reserves opening for the first time as a result of the region’s warming — no similarly ambitious regime looks anywhere at hand.

A couple of weeks ago, at the first Halifax International Security Forum, sponsored by the German Marshall Fund of the United States and the Canadian government, there were questions to a panel of military, diplomatic and shipping experts about whether a greater sense of urgency and a less piecemeal approach wouldn’t be appropriate before the ice melts.

There are unresolved and overlapping territorial claims. There is a dispute between the North Americans about whether an operational Northwest Passage, joining the Atlantic and Pacific oceans, is a Canadian or an international waterway. And there is concern that a three-year-long Russian mapping mission of the Arctic seabed will have an unnecessary military escort. (To do what — defend it against attacking seals?)

But there is nothing wide-reaching and specific planned to fend off militarization or address the Arctic’s unique and growing environmental problems.

As for the United Nations Convention on the Law of the Sea, sometimes described as a sufficient framework for Arctic governance, Neil Hamilton of the W.W.F. Arctic Program said last year it had failed to address climate change.

Indeed, the U.S. Senate has never ratified the convention’s work. The fact is also that some Americans dealing with the issue who acknowledge the possibility of a “strategic revolution” in the Arctic say there is no need to focus on it for another 10 years.

Following this line, the Antarctic Treaty — and, tacitly, its essential prohibitions — have been referred to as not analogous to the Arctic’s circumstances because the High North is a frozen sea with continents around it, as opposed to Antarctica’s frozen land mass surrounded by water. Besides, you hear, back in 1959 there was a different notion of the regions’ potential.

The Arctic, its wealth and military significance gets a kind of mañana or all’s cool approach in public from its main Western actors — Canada, the United States, Norway and Denmark (through its links to Greenland). Alongside Russia, they were the

participants in the 2008 Ilulissat Declaration, a narrow procedural statement on the Arctic that resolves none of its biggest questions.

A panelist in Halifax, Espen Barth Eide, Norway’s deputy defense minister, said a bit wistfully, “The opening up of the Arctic is not necessarily a good thing.” But he added, “The assumption that there’s going to be some kind of Great Game adventure — that’s not true. The circumstances are important, but not alarming.”

The Canadian armed forces chief of staff, Gen. Walter Natynczyk, also tried to be reassuring, saying, “There is no conventional military threat to the Arctic,” while at the same time suggesting the area was such a difficult place that only the military had sufficient capabilities to operate in some circumstances.

Which leaves the Russians, who seem more in a rush than the Atlantic Alliance players to create their own kind of Arctic facts.

They have experience in the region, but hardly a resounding record as great stewards of the environment. Their claim to half of the Arctic as their own was described in Halifax as “extravagant” by a former U.S. ambassador to NATO, Kurt Volker.

In 2007, they planted a Russian flag under the North Pole. This year, Moscow’s National Security Council announced that the Arctic would become its “main resource base” by 2020, and plans for troops “capable of ensuring military security in the region.” In October, a Russian admiral said that helicopter carriers the Russian Navy hopes to buy from France were earmarked, in part, for its Arctic fleet.

But this could be just woofin’. In April, Foreign Minister Sergei Lavrov (the man who introduced the still-active Russian policy line that there is no evidence to indicate Iran seeks to produce nuclear weapons) did a 360 and insisted Russia was not planning any increase of forces in the Arctic. Add to that General Natynczyk telling the Halifax conference that the hulls of the helicopter-carriers Russia wants were not suitable for Arctic conditions.

All the same, said Mr. Volker, who is managing director of the Johns Hopkins Center for Transatlantic Relations, “The Russians know what they want. They’ve got an Arctic fleet, and incentives to bring people to settle in the region. They want to develop gas fields. It’s not military aggression, but an attempt to build a comprehensive presence.” Washington, he said, “has been a little slow to put the pieces together. And we’re the only country to have the resources and political weight that can get a handle on the development of the region.”

Urgency? A great big idea to rule out the worst-case Great Game perspective of guns, gas leaks and oil spills, tanker collisions and nationalist jostling?

It’s unlikely soon. During a week when big ideas have their shot at the Copenhagen Climate Conference, it’s clear the Arctic isn’t getting its share.

LA Times: Russia reigns over its weatherhttp://www.latimes.com/news/nation-and-world/la-fg-moscow-snow8-2009dec08,0,6343440,full.story

Moscow officials have already chased away clouds on public holidays. Now they're considering cloud seeding to keep snow-removal costs down in the winter. Neighboring towns may get dumped on.

By Megan K. Stack

December 8, 2009

Reporting from Moscow

In the snow-hushed woods on Moscow's northern edge, scientists are decades deep into research on bending the weather to their will. They've been at it since Soviet dictator Josef Stalin paused long enough in the throes of World War II to found an observatory dedicated to tampering with climatic inconveniences.

Since then, they've melted away fog, dissipated the radioactive fallout from Chernobyl and called down rains fierce enough to drown unborn locusts threatening the distant northeastern grasslands.

Now they're poised to battle the most inevitable and emblematic force of Russian winter: the snow.

Moscow's government, led by powerful and long-reigning Mayor Yuri Luzhkov, has indicated that clearing the capital's streets of snow is simply too expensive. Instead, officials are weighing a plan to seed the clouds with liquid nitrogen or dry ice to keep heavy snow from falling inside the city limits.

Word of the proposal has sent a shudder through Moscow just as the first dark, snowy days have fallen on the capital. It has also piqued the surrounding region, which would receive the brunt of the displaced snowfall, and has raised concerns among ecologists.

"I was very surprised because [the mayor] never even asked us," says Alexei Yablokov, who sits on the mayor's ecological council and has concerns about the proposal, including the environmental effects and pressure on surrounding villages. "We never discussed it at all."

The city government says it still hasn't reached a decision. But scientists at the Central Aerological Observatory say they are deep into negotiations with authorities and expect the cloud-seeding plan to go forward.

The city has hit upon a splendid idea, the scientists say. Laboring against the uncomfortable sense that their observatory's import has waned since its Soviet heyday, they are eager to unleash their many and various technologies.

They already seed the clouds for political effect, clearing the skies over Moscow twice a year to ensure sun-drenched celebrations of patriotic holidays.

In Russia, nobody rains on the parade -- because the Russian government doesn't allow it.

"Victory Day is the most sacred holiday for us," says Bagrat Danilian, deputy chief of cloud seeding at the observatory. "When veterans go out to celebrate in Moscow, we create good weather for them."

All it takes, he says, is sacks of cement -- 500-grade, to be precise. Drop the powder down into the clouds, and they vanish.

Soviet scientists learned how to disperse clouds by accident 40 years ago: They had flown overhead and dropped powdered blue paint into the clouds to tag them for observation. Instead, the powder melted the clouds away.

Danilian, 56, a dark-haired, solid man with a quick grin, was born to an Armenian family in Soviet Georgia and studied physics at Tbilisi State University.

He moved to Moscow in 1979 to work for the observatory, and has been there ever since.

He is nostalgic for the Soviet era of experimentation. In those days, when Danilian was younger and funding more plentiful, he was sent off to Vietnam, Cuba and Syria to study the clouds.

He has flown into hurricanes, bounced through airstreams like a pingpong ball and survived lightning strikes on turboprop planes.

"You won't find a more interesting profession," he says enthusiastically. "You can't compare it with anything. You just float on your own adrenaline."

There is something almost godlike about interfering with the weather. It was a need to rationalize the whims of climate that inspired the notion of deities in ancient times, and there is still an inherent sense of helplessness before nature's force.

In much of the world, weather and cloud research is focused on preventing hailstorms, tornadoes, droughts and the like. Not that Russia is the only country that has used it to ensure sunny public holidays. In Beijing, clouds have been chased away from the Olympic ceremonies and other celebrations.

But there is a certain nonchalance to the way Russians regard cloud seeding. For a people

accustomed to displays of great power, changing the weather draws little interest.

"It's true that the attitude here is more positive, of course," says Aleksandr Azarov, senior scientist at the observatory. And why not, he shrugs.

"If there's a drought, who wouldn't pray to God for rain to fall?"

The cloud seeding is done in moderation, scientists insist.

"You shouldn't overstep the threshold over which the weather would change globally," Danilian says. "We're trying to look for that threshold in a very careful way."

Sometimes, despite their efforts, nature wins. And in one instance, gravity.

As the Russian air force toiled to chase the clouds out of town for last year's independence day celebrations, a clump of cement tumbled to earth instead of dissipating into the clouds. It crashed through the roof of a house on Moscow's outskirts.

Rather than accept the $2,000 compensation offered by the military, the homeowner huffed to reporters that she would file suit for "moral suffering."

It's unlikely that Muscovites would ever agree to forgo snow altogether. During the long, dark months of winter, the flicker of clean snowflakes against the sky is one of the few recurrent graces, creating a vast playground for children and briefly coating the drab days in sparkling white.

But Luzhkov, the mayor, is prepared to choke off any particularly massive snowfalls, which usually unleash battalions of plows, flanked by armies of workers hoisting ice picks and shovels.

The city government believes it can save more than $13 million with cloud seeding.

"In the movies, the snow looks very beautiful with St. Basil's Cathedral in the background," says Azarov, the senior scientist. "But this snow costs a pretty penny to Moscow authorities."

megan.stack@latimes.com

Russia Today: Russia’s two major opposition parties to unite? http://rt.com/Politics/2009-12-08/communists-fair-russia-merger.html/print

08 December, 2009, 07:14

The leader of Russia's third largest political party, 'Fair Russia', says it might merge with the Communists in the future.

"I am convinced that in the near future the two parties will merge on a social democratic basis," Sergey Mironov said in an interview with the Itogi weekly magazine on Monday.

The politician added that Communist party leader Gennady Ziuganov is not in the mood to negotiate the merger yet. However, the party’s rank-and-file and medium level functionaries favor the idea, according to Mironov.

Despite Mironov’s reasoning, some experts believe that the merger is unlikely.

“It is difficult to see the two coming together unless the Communists were quite desperate,” Tim Wall, editor in chief of the Moscow News newspaper told RT.

“I think that currently, with the economic situation being difficult, the Communists are actually getting quite involved in protests against job losses, cut backs – this kind of thing. They probably feel that the wind is in their sails a little bit and they are going to gain popularity,” he added.

In his interview in the magazine, Mironov also speculated that in the future the ruling United Russia party might undergo structural changes.

"I suppose that after 2011 (not earlier), when the Duma will have been elected for five years, the process of United Russia's split-up may begin with the end effect of two or three new parties emerging in its place." He added that his party ideology is most close to the 'social wing’ of United Russia.

Although at the party level Russia's political landscape can seem one-sided now, a unified leftist bloc could be the first step towards a two party political system such as in the US.

RIA: Police officer injured in Chechnya blasthttp://en.rian.ru/russia/20091208/157150964.html

09:3908/12/2009

A police officer was injured when an explosive device went off during a search operation in Chechnya, a police official in the volatile southern Russian republic said on Tuesday.

The explosion occurred in a wooded mountainous area in the republic's Vedeno district on Monday night, police said.

The Kremlin officially ended its anti-terrorism operation in Chechnya in April, but the mainly Muslim republic has continued to see almost daily blasts, skirmishes with gunmen or attacks on troops, police and other officials.

An upsurge of violence has also swept neighboring regions in Russia's North Caucasus.

Chechnya saw two brutal separatist wars in the 1990s and early 2000s.

MOSCOW, December 8 (RIA Novosti)

RIA: Russian authorities foil 81 terror acts in N.Caucasus in 2009http://en.rian.ru/russia/20091208/157152848.html

12:1508/12/2009MOSCOW, December 8 (RIA Novosti) - Police and other security forces have prevented 81 terrorist attacks in Russia's volatile North Caucasus this year, the head of the Federal Security Service said on Tuesday.

Speaking at a session of the National Antiterrorism Committee, FSB chief Alexander Bortnikov said 42 antiterrorist operations and a series of reconnaissance and search operations had been carried out in the region so far in 2009.

"As a result, 81 terrorist crimes were prevented, 782 members of illegal armed groups were detained, more than 1,600 small arms, 490 self-made bombs and over 5.5 tons of explosives were discovered and confiscated," Bortnikov said.

Russia's mainly Muslim and ethnically diverse North Caucasus republics have been swept by an upsurge of violence recently.

Moscow announced an end to its decade-long antiterrorism campaign against separatists in Chechnya in April, but has since had to step up the fight against militants as skirmishes and attacks on police and other officials have continued.

Violence has also swept neighboring regions, where hundreds of people have been killed in militant attacks and skirmishes between security forces and gunmen.

Ingushetia's president was severely wounded and rushed to Moscow for treatment after a suicide bomber attacked his motorcade in June. Also in June, the interior minister was shot dead in Dagestan.

In the most recent incident, Islamists claimed responsibility for the November 26 explosion that derailed a speed train en route from Moscow to St. Petersburg, killing 26 people and injuring more than 90.

Bortnikov pledged to continue the fight against terrorists echoing the prime minister's statement earlier this month.

Vladimir Putin vowed a "ruthless fight" against militants in the North Caucasus, but said a new war is not expected in the regio

RFERL: Controversial Russian Blogger Says Met With Kremlin Officials http://www.rferl.org/content/Controversial_Russian_Blogger_Says_Met_With_Kremlin_Officials/1897617.html

December 07, 2009 MOSCOW -- A controversial Russian blogger who considers himself a fascist claims he met with the deputy chief of Russia's presidential office, Vladislav Surkov, to discuss his ideas, RFE/RL's Russian Service reports.

Maksim Kalashnikov, who has written in his blog that fascism is "mankind's future," told RFE/RL that in mid-September President Dmitry Medvedev asked the Russian government's chief of staff, Sergei Sobyanin, to look at some proposals that were e-mailed to the president by Kalashnikov.

On October 7, Kalashnikov said he met with Sobyanin in Moscow and it was agreed that Kalashnikov would present his ideas on the organization of "new autonomous towns in Russia."

Kalashnikov wrote in his blog on December 4 that he met with Surkov and presented his ideas about "the establishment of a public agency to create a new political force oriented toward the innovation and further development of Russia."

Kalashnikov refused to comment to RFE/RL about the specifics of his meeting with Surkov, but said all that information is in his blog.

Meanwhile, Surkov told RFE/RL that he does not know Kalashnikov and has never met with him.

The St. Petersburg Times: Former Cop Visits City To Campaign For Reformhttp://www.times.spb.ru/index.php?action_id=2&story_id=30488

By Sergey ChernovStaff WriterAlexei Dymovsky, the police officer who was fired and sued after he spoke out against police corruption in his YouTube address to Prime Minister Vladimir Putin last month, announced the creation of a grass-roots movement for police reform in St. Petersburg on Sunday.

Later in the day, his bodyguard and two supporters were detained as they drove in a car in the city, having been followed by unmarked cars, he said. They were released on Monday.

Called White Ribbon — a reference to the samurai moral code — the movement opened its first branch in St. Petersburg, where it was showcased at a news conference on Sunday.

“The movement’s goals are the protection of citizens’ interests, ensuring that officials enforce the law, and the reform of the Interior Ministry system,” Dymovsky said by phone on Monday.

Earlier, Dymovsky spoke against quotas for the number of criminal cases to be prosecuted, which he said leads to police officers fabricating evidence, and low wages in the police force, which lead to corruption and crime. He distanced himself from political movements and any forms of radicalism, saying that all his activities would be within the law.

Dymovsky, who was a police major from the southwestern port city of Novorossiisk before being fired on Nov. 8 — three days after his Nov. 5 video appeal — also gave out his mobile phone number and asked the public to report instances of police corruption and violations directly to him.

Several other police officers from different cities have followed suit and also made video statements, which can be viewed at Dymovsky’s web site, dymovskiy.name.

The police have been at the center of attention in recent months following a series of high profile cases. The most publicized case involved Major Denis Yevsyukov, a Moscow police chief who went on a shooting rampage in a Moscow supermarket killing two and wounding seven on April 27.

The gun Yevsyukov used had been recorded as missing from a criminal inquiry in Chechnya since 2000, according to investigators. His deputy was arrested and charged with illegal firearms trafficking in May.

Dymovsky suggested Sunday’s surveillance and detentions in St. Petersburg were part of “someone’s game.”

“They [Dymovsky’s bodyguard and supporters] were held in some building through the night — from what I understood, by FSB (Federal Security Service) men,” he said.

“It was done to cause some scandal on the web — they waited for me to start sounding the alarm in order to save [the detained supporters]. When a big commotion had kicked off, they let them go.”

Dymovsky added that the three detained supporters were treated well, though no reason was given for their detention.

The car that Dymovsky was in was also followed, he said. The FSB’s press service did not answer the phone when called on Monday.

A series of rallies in support of Dymovsky, who found himself under pressure after his video appeal, were held in Moscow, St. Petersburg, Yekaterinburg and several other cities on Nov. 28.

The Moscow Times: Internet Provider Says It Blocks Sites http://www.themoscowtimes.com/news/article/internet-provider-says-it-blocks-sites/391080.html

08 December 2009By Nikolaus von Twickel

New fears of Internet censorship spread in the Russian blogosphere Monday after a wireless Internet provider co-owned by Russian Technologies acknowledged blocking access to some web sites.

Moscow-based users of the Yota provider have been unable to access web sites such as Garry Kasparov’s Kasparov.ru, Solidarity’s Rusolidarnost.ru and the banned National Bolshevik Party’s Nazbol.ru over the past few weeks, bloggers and the sites’ editors said.

Access also was patchy until Sunday to the site of opposition magazine The New Times, its web editor Ilya Barabanov said Monday.

Yota denied that it was blocking those sites. But Denis Sverdlov, chief executive of WiMax operator Skartel, which runs the Yota brand, did acknowledge that Yota blocks access to sites that are classified as extremist by the Justice Ministry. Because of that, Yota users cannot open the Chechen rebel web site Kavkazcenter.com.

“In November, we got an order from prosecutors recommending that we close access to extremist sites,” he said in e-mailed comments. “Since we are a law-abiding firm, we put the order into practice.”

As for users’ lack of access to the opposition web sites, Sverdlov blamed technical difficulties that arose after Yota introduced new IP addresses to cope with the rapid growth of its customer base. “On Oct. 23, we were assigned a bloc of 65,536 IP addresses. After we put them to commercial use, we found that IT managers of some other sites could not exclude them from those IP addresses they filter,” Sverdlov said.

As proof that there was no censorship, he said President Dmitry Medvedev’s official site at Kremlin.ru was at times inaccessible as well.

Kavkaz Center was declared extremist in a 2008 court decision and appears 10 times on the Justice Ministry’s list of more than 450 items classified as extremist. The ministry’s list does not mention any of the opposition sites that have complained of being inaccessible to Yota users.

Critics say the extremism law, which was widened in 2006, is being used to silence the opposition.

It is unclear why, with the exception of Yota, most national providers do not block access to Kavkaz Center.

A representative at Yota’s technical support hot line told the Novy Region news agency on Friday that the company was blocking 29 extremist sites. The unidentified representative said Kasparov.ru was not on the list but the list had been updated a week earlier.

Bloggers, meanwhile, are rattled by an audio file posted online Sunday in which a female voice — purportedly of a Yota support representative — says Kasparov’s and Solidarity’s sites are blocked because they are on that list.

“This strongly smells of political censorship,” said Denis Bilunov, a senior member of Kasparov’s Other Russia movement.

He said the most likely explanation was Russian Technologies’ involvement in the company.

The state-owned arms and industry behemoth bought a blocking stake in Telconet in November 2008.

A spokeswoman said Russian Technologies could not immediately comment on the allegations Monday.

Skartel spokesman Anton Belkov said he would not comment beyond Sverdlov’s statement.

Skartel has been building a network providing high-speed wireless Internet service since last summer and has said it wants to become a nationwide operator covering 180 cities within three years. State corporation Russian Technologies holds a 25.1 percent blocking stake in Skartel’s parent company, Telconet.

The Internet has been called the country’s last bastion of free speech after the state brought most national television channels and influential print media under its control over the past decade. Fears of a crackdown were raised last month after a video address by police officer Alexei Dymovsky lambasting corruption unleashed a string of copycat whistle-blowers airing their complaints online. Also last month, top search engine Yandex stopped ranking popular blog posts after several entries exposed problems that embarrassed government officials.

Bloomberg: Hitler’s Remains Were Destroyed on KGB Orders, Interfax Reportshttp://www.bloomberg.com/apps/news?pid=20601100&sid=afB_Zuasc4H8

By Lucian Kim

Dec. 7 (Bloomberg) -- Adolf Hitler’s remains were burned and dumped into an East German river by Soviet agents 25 years after the end of World War II, Interfax reported, citing Vasily Khristoforov, the Federal Security Service’s chief archivist.

The remains of Hitler, his companion Eva Braun and the family of Nazi propaganda chief Joseph Goebbels were destroyed in April 1970 on the secret orders of then-KGB chief Yuri Andropov, the Russian news agency said today. Andropov went on to become Soviet leader from 1982 until his death in 1984.

The Soviets were concerned that graves of Third Reich leaders might one day attract Nazi sympathizers, Interfax said. The remains were burned and dumped into the Biederitz River, outside the eastern city of Magdeburg, according to the news service.

The Soviet army moved the bodies from near Rathenow, west of Berlin, and reburied them at a garrison in Magdeburg in 1946, Interfax said. When the facility was returned to the East German government in 1970, Andropov decided to destroy the remains. Fragments of Hitler’s skull and jawbone are still in Russia, according to Interfax.

To contact the reporter on this story: Lucian Kim in Moscow at lkim3@bloomberg.net

Last Updated: December 7, 2009 11:59 EST

FT.com: Ghosts of the brutal pasthttp://www.ft.com/cms/s/0/52329a42-e399-11de-9f4f-00144feab49a.html

By Charles Clover

Published: December 8 2009 02:00 | Last updated: December 8 2009 02:00

As hard as he tries, Lev Netto will never forget his first day at Norilsk Nickel, a Stalin-era forced labour camp in northern Russia where he was shipped as a prisoner in 1945. As his group of 40 prisoners was marched from a rail head to the cluster of barbed wire and barracks in the midst of the tundra, the prisoner to Mr Netto's left tripped and fell out of line. Instantly, the guards opened fire with their submachine guns.

"One second he was a man, and then he wasn't anymore," says the 84-year-old Muscovite. "They set the dogs out on him, on his half-dead corpse, and they tore him to pieces. Then they told us to sit. The guards determined that he had tried to escape. He was literally half a metre from the column."

Today, Norilsk Nickel's mine complex looks much the same, a grim cluster of buildings and slag heaps illuminated by the slanting Arctic sunlight. But now it is also one of the

most profitable private companies in Russia, the world's largest producer of nickel and palladium, and accounts for 1.5 per cent of the country's gross domestic product annually.

Many of the most profitable companies in Russia today were built in the period of rapid industrialisation of 1930-1956 by convict labourers organised by the NKVD, the precursor to the KGB. The "gulags" were Joseph Stalin's recipe for building the Soviet Union's heavy industry - and simultaneously, for crushing political dissent. Millions are thought to have died in the camps, immortalised in The Gulag Archipelago by Aleksandr Solzhenitsyn. "These were, undisguisedly, murder camps, but in the gulag tradition murder was protracted, so that the doomed would suffer longer and put a little work in before they died," he wrote.

Many of the world's biggest companies have lived through similarly horrific chapters in their country's histories and dealing with such a legacy is a challenge. Marks and SpencerIn the US, a clutch of companies has apologised for historical links to slavery, including the banks JPMorgan Chase and Wachovia in 2005. And in Germany, Siemens and Volkswagen and other companies agreed to pay Nazi-era slave labourers compensation as part of a settlement of a lawsuit by former victims and their families in 1998.

As Russia's big businesses become increasingly global and adopt practices that are more common in the west, such as corporate social responsibility strategies, this could put pressure on them to tackle their legacy.

"There are so many of these enterprises, half our economy is former prison camps," says Irina Flige, director of the St Petersburg office of Memorial, a society dedicated to human rights and preserving the memory of the gulags. "Our companies do not deal with this legacy at all. Everybody just ignores it."

In fact, of the former gulag enterprises, Norilsk is one of the few that acknowledges its past, partly because its infamy as a prison camp is so well known. Solzhenitsyn described it as "a combination of all that was worst in the camps with all that was worst in the prisons".

Today, Norilsk has a small museum exhibit dedicated to the gulag prisoners and has published an anthology of reminisces about one of the camp's most famous inmates, the historian Lev Gumilev, son of poets Anna Akhmatova and Nikolai Gumilev, who was imprisoned there between 1939 and 1944.

It also pays compensation to victims - 119 members of the local "society for the protection of the victims of political repression" who were former prisoners receive an annual stipend of 3,500 roubles ($119, €80, £72) - and has an annual memorial day.

But Mr Netto is unimpressed. He dismisses the gesture as "a joke" and says that "there is nothing in it to suggest some sort of moral responsibility for what happened".

In many other cases, company histories have been rewritten to cover up the origins. For example, Lev Voznisensky, a retired economist who spent five years as a prison labourer following the execution of his father as a traitor in 1949, says that while he and his fellow inmates built the coal mining city of Mezhdurechensk, the official history says it was built by Komsomol volunteers, straight from the propaganda posters of Stalin's day.

"Even when we were working, the newspapers said we were 'volunteers'," he says, sitting in his Moscow apartment. "They wanted to erase us from history."

Ms Flige says: "It was very common at the time to cover up the existence of the gulags. Nobody wanted their house built by slaves, so they wrote them out of the history."

Today, industrial assets in Mezhdurechensk are largely controlled by Yuzhny Kuzbass, a division of coal producer Mechel, a New York-listed coal and steel producing company based in Moscow, and Evraz, a London-listed steel producer that is Russian-owned but based in Luxembourg.

While both these steel groups have departments devoted to corporate social responsibility projects, they have distanced themselves from the gulag labour issue.

"First, we have no information that prisoners were among the labour force working at these enterprises," says Mechel. "Second, we don't consider this history to be significant for the company. It was a different time and a different reality. This is a question for historians, not a question for us. What concerns us today is how to create jobs for people now."

Evraz declined to comment.

Igor Yurgens, deputy director of the Russian Union of Industrialists and Entrepreneurs, a chamber of commerce for Russia's biggest businesses, says that in legal terms, Russian companies face no liability for the excesses of the Soviet past, because the country is not legally a continuation of the Soviet Union. "We are not the heirs of that system," he says. "When Russian businessmen acquired their enterprises after the end of communism, the task was how to get them going again, not to think about who created them."

According to Michael Marrus, a historian and law professor at the University of Toronto and an expert on the Holocaust lawsuits of the 1990s, this is one reason why the cases involving German companies are unlikely to be mimicked in Russia.

He says that the German businesses paid compensation due to public pressure rather than the strength of the legal case against them. Moreover, the legal distance between a private Russian company and the former Soviet Union is the "major, probably insuperable legal hurdle". It is the likely reason why no suit has ever been launched, even in a foreign court.

Today, the attitude of Russia's government is to let sleeping dogs lie. Records of the gulags are now hard to access, and the only systematic information is to be found in privately held archives.

Russia's official approach to this tragic history is to extol the successes of the Stalin era while simultaneously lamenting the tragic loss of life. "This approach is schizophrenic," says Ms Flige. "It is like: 'Yes, it's too bad about all these deaths. But hurrah! We built this canal!' This is how it sounds."

Still, there have been recent signs of a change to official policy. In September, for example, the education ministry made The Gulag Archipelago required reading in state schools.

Speaking on October 30, the annual holiday devoted to the victims of Stalinism, Dmitry Medvedev, Russia's president, spoke out against the worst excesses of that time. "Even now we can hear voices saying that these numerous deaths were justified by some supreme goals of the state," he said. "Nothing can be valued above human life, and there is no excuse for repressions."

Mr Netto remains unmoved. Of Mr Medvedev's gesture, he says: "These are all nice words. But it is hard . . to draw the conclusion that we are really living in a different state than the one Stalin ruled."

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

National Economic Trends

Reuters: EBRD Russia investments at $4 bln in 2009http://www.iii.co.uk/news/?type=afxnews&articleid=7661463&subject=companies&action=article

MOSCOW, Dec 8 (Reuters) - The European Bank for Reconstruction and Development (EBRD) will invest around $4 billion in Russia this year -- over a third more than the previous year -- the bank's head said on Tuesday. "When the crisis hit Russia, we were able to respond with an anti-cyclical increase in investments, which provided companies and financial institutions with scarce capital," Thomas Mirow, EBRD's president said during a conference in Moscow. The investment will go towards projects in new technologies, infrastructure and energy efficiency, in addition to the real and banking sectors of the economy, Mirow said.Russia, which saw a tenth of its economy in gross domestic product terms disappear in the first half of the year before registering anaemic growth in recent months, remains the EBRD's largest client -- accounting for nearly 31 percent of the bank's total investment portfolio at the end of 2008.On Monday, the bank said it might consider investing 0.5-1.0 billion euros over the

medium term in the Russian high-tech sector.Late last month, the bank also said that it may take part in Russia's privatisation programme, through which the government hopes to raise $2.5 billion in 2010.(Reporting by Toni Vorobyova; writing by Lidia Kelly, editing by Mike Peacock) Keywords: RUSSIA/EBRD (lidia.kelly@reuters.com; +7 495 775 1242)

RIA: Kudrin: Russian economy must be more open to spur innovation http://en.rian.ru/business/20091208/157152577.html

12:0208/12/2009

Russia's Finance Minister Alexei Kudrin said on Tuesday the Russian economy needed to become more open to create innovative products and compete effectively on global markets.

"We must not become closed. The average-weighted rate of the Russian market protection [the average import duty] is 11.5% compared with 3-4% in the EU and about 3% in the U.S. While creating a new product, we must import the best technologies. If we develop them only on our own, we'll most likely fall behind and therefore we need openness," he said.

Addressing a Moscow conference on the modernization of the Russian economy and the role of development institutions, Kudrin said world trade had contracted 11.9% over the crisis year while Russia and other countries of the Commonwealth of Independent States (CIS) lost even more.

Kudrin said that many markets were trying to protect themselves as the global economic crisis was not yet over, adding that Russia was the most closed country.

Kudrin also said that Russia's accession into the World Trade Organization as part of a customs union created between Russia, Kazakhstan and Belarus in November would lower the high level of protectionism within the boundaries of new customs borders.

MOSCOW, December 8 (RIA Novosti)

Djnewswires: Russia Kudrin: Need Global Body To Oversee Financial Markets http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=64a604e8-e4a3-4336-8d04-f6273e0e3e4e

Tue, Dec 8 2009, 07:56 GMThttp://www.djnewswires.com/eu

Russia Kudrin: Need Global Body To Oversee Financial Markets

MOSCOW -(Dow Jones)- Russian Finance Minister Alexei Kudrin Tuesday called for a worldwide organization to regulate financial markets.

Speaking at a Moscow conference on the modernization of the economy, Kudrin said that the issue will be discussed within the framework of the Group of 20 industrialized and developing nations.

Company Web site: www.minfin.ru

-By Ira Iosebashvili, Dow Jones Newswires; +7 495 232 9195; ira.iosebashvili@dowjones.com

Reuters: Russia must look abroad for brains, techs-FinMinhttp://www.forexpros.com/news/forex-news/russia-must-look-abroad-for-brains,-techs-finmin-106100

2009-12-08 08:29:20 GMT (Reuters)

MOSCOW, Dec 8 (Reuters) - Russia must look abroad for brains and technology to succeed in the long-standing aim to diversify the economy away from oil, Finance Minister Alexei Kudrin said on Tuesday, slamming the recent rise in protectionism.

The dependence on energy and commodity exports was one of the factors that made Russia more vulnerable to the global economic crisis than its emerging market peers such as Brazil, India or China.

The crisis pushed Russia into its first recession in a decade, prompting the government to step in to save some of its biggest companies, such as carmaker AvtoVAZ , with a range of measures including trade barriers. But some argue that such policies are just engraining the inefficiencies in the domestic industry.

"There has been an increase in protectionist moods, including in Russia," Kudrin told a conference on modernisation organised by state bank VEB.

Russia is one of the most closed countries among emerging markets, and has an average import tariff of 11.5 percent compared to levels of 3-4 percent in the euro zone and the United States, Kudrin said.

"We cannot shut ourselves off," he said. "If we want to create new products we can only do it by bringing in brains and technologies. We must use the best of what exists to the full."

Within Russia, Kudrin reiterated that the recovery path from recession will be a slow one.

"All (companies) are trying to improve production and cut costs, but not everyone will succeed," he said. "Not all will survive this difficult period in the next one-two years." (Reporting by Toni Vorobyova and Dmitry Sergeyev; Editing by Andy Bruce)

DECEMBER 8, 2009, 3:19 A.M. ET

Dow Jones: Russia's Kudrin: Country Is Weak Link On Global Capital Mkt http://online.wsj.com/article/BT-CO-20091208-701706.html

MOSCOW (Dow Jones)--Russia will remain a weak link on the global capital market, Finance Minister Alexei Kudrin said Tuesday.

"For the moment in this global economy our capital market is still a weak link. We will feel the effect of this violability on our stock indexes, on our balance of payments and on our exchange rate," said Kudrin, speaking in Moscow at a conference on the development of the Russian economy.

Company Web site: www.minfin.ru

-By Ira Iosebashvili, Dow Jones Newswires; +7 495 232 9195; ira.iosebashvili@dowjones.com

EasyBourse: Russia To Name Banks Organizing Sovereign Debt Issue Soonhttp://www.easybourse.com/bourse/actualite/russia-to-name-banks-organizing-sovereign-debt-issue-soon-770797

MOSCOW -(Dow Jones)- Russia will soon name a list of banks that may organize the country's sovereign debt issue next year, Finance Minister Alexei Kudrin said Tuesday. "In the next few days, a decision will be taken on the list of banks that can take part in the Eurobond issue," said Kudrin. The sale will mark the Russian state's first eurobond issue in a decade. Company Web site: www.minfin.ru -By Ira Iosebashvili, Dow Jones Newswires; +7 495 232 9195; ira.iosebashvili@dowjones.com

Interfax: Banks eligible to participate in Russian Eurobond offering to be known in days – Kudrinhttp://www.interfax.com/newsinf.asp?id=134563

MOSCOW. Dec 8 (Interfax) - A list of banks eligible to participate in a placement of sovereign Russian Eurobonds next year will appear within days, Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, told reporters.

"A decision on the list of banks that can participate in the offering will appear in days," he said.

The Moscow Times: Stimulus Gives Boost To Agriculture Output http://www.themoscowtimes.com/business/article/stimulus-gives-boost-to-agriculture-output/391068.html

08 December 2009By Alex Anishyuk

Russia will boost its agricultural output this year, Agriculture Minister Yelena Skrynnik said Monday, attributing the increase to a government stimulus program that she said maintained growth rates during recession.

“Russian agricultural output may reach 3 trillion rubles ($100 billion) in 2009, compared with 2.6 trillion last year,” Skrynnik said at a news conference. “Grain production may reach 93 million metric tons, including 19 million to 20 million metric tons for export, which exceeds the planned volume of 85 million metric tons set for 2009.”

The growing output comes after a heavy summer drought that destroyed 4.4 million hectares of crops, according to data that the ministry released in September.

Russia will continue to export grain, although exporters are facing an increasing number of challenges, Skrynnik said.

“We are forced to sign long-term contracts with our largest importers, such as Egypt, Turkey, Israel and some of the EU countries,” she said. “Besides, it is quite difficult to meet precise quality requirements which vary from country to country.”

Russian grain exporters may lose up to $500 million in 2010 as crops are damaged by the eurygaster insect, while major importers, such as Egypt, raise quality requirements, Dmitry Rylko, CEO of the Institute for Agriculture Market Studies, said last week.

In 2008, Russia exported 23 million metric tons of grain. As of Nov. 10, the country had exported a total of 8.5 million metric tons, Deputy Agriculture Minister Sergei Korolev said at the time.

Meat production will increase 7 percent to 6.68 million metric tons, with imports of 2.5 million metric tons making up for the rest of 9.1 million metric tons of annual consumption. Skrynnik said meat imports would drop to 25 percent from 30 percent of the overall consumption by 2012, in line with the country’s food security doctrine.

The doctrine, rejected by ex-President Boris Yeltsin in 1997 and reinstated by the Kremlin in 2008, is aimed at lowering the country’s dependence on food imports.

The document, which is still being discussed by the government, calls for Russia to produce enough food domestically to supply up to 80 percent of internal food demand.

Imports accounted for up to 40 percent of all food consumed in Russia in 2008, the Federal Tax Service said earlier this year, while the figures may be lower this year as the tax regulators said Russia reduced imports of some products.

The government will invest 183 billion in the agricultural sector in 2009, Skrynnik said in July, an increase of 30 percent year on year, and almost double the 2007 investment.

Business, Energy or Environmental regulations or discussions

Reuters: Russian markets -- Factors to Watch on Dec 8http://in.reuters.com/article/oilRpt/idINGEE5B702G20091208

Tue Dec 8, 2009 12:50pm IST MOSCOW, Dec 8 (Reuters) - Here are events and news storiesthat could move Russian markets on Tuesday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to moscow.newsroom@reuters.com): Troika: Russian equities fell yesterday as the rubleweakened the most in four months and crude dropped, the USequity market headed south. Markets in Asia are down thismorning on concerns over the US economy. We are opening ourprices varied, from flat to down slightly. Aton: Expects markets to open flat. EVENTS [RU-DIA] (All times GMT): MOSCOW- European plane maker Airbus (EAD.PA: Quote, Profile, Research) (EAD.DE: Quote, Profile, Research) tohold a news conference with forecasts of air transportation inRussia and the CIS -0830. MOSCOW - Russia's cabinet to discuss compensations for thevictims of Nevsky Express train crash. MOSCOW - Indian Prime Minister Manmohan Singh visiting. MOSCOW - Palestinian Foreign Minister Riyad al-Malki arrivesin Russia (on visit to Dec. 10). MOSCOW - Russian state bank VEB to hold a conference oneconomy modernization. MOSCOW- Russia's central bank to hold an auction forfive-week collateral-free loans for commercial banks, with 10billion roubles on offer at a minimum bid rate of 11.25 percent. MOSCOW- Forum Oil and Gas Outlook Russia 2009 (to Dec. 9). MOSCOW - LUKOIL (LKOH.MM: Quote, Profile, Research) Q3 results MOSCOW - Mechel (MTL.N: Quote, Profile, Research) Q3 results

IN THE PAPERS [PRESS/RU]: Russia's largest oil producer, Rosneft (ROSN.MM: Quote, Profile, Research) plans toinvest $6 billion in its refining business in 2010 through 2014,business daily Vedomosti reports citing the company's statement. Russia's Gazprom (GAZP.MM: Quote, Profile, Research) will spend $500 million on thedevelopment of the Indian and Vietnamese offshore deposits in2010, Vedomosti writes referring to a source close to the gasexport monopoly. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:*Russia PM lambasts officials after disco fire [nGEE5B629E]*Russia, India PM talks highlight BRIC differences [nGEE5B622R] COMPANIES/MARKETS:*RUSAL IPO delayed as Hong Kong seeks answers [nGEE5B61EF]*EBRD may invest 1 bln euros in Russian high-tech [nGEE5B61YY]*Sberbank net below fcast, provisions rise slowing [nGEE5B60JG]*NLMK profit adds to signs of Russia steel recovery[nGEE5B604W]*NLMK '10 investment capex could top $1.5 bln [nGEE5B61OI]*Globaltrans GDR seen priced at $8.0-8.5 - sources [nGEE5B61EM]*KAMAZ expects up to 15 pct market growth in 2010 [nL1605803]*MTS agrees on up to $165 mln loan [nGEE5B61DH]*IFC buys stake in Russian IT firm Asteros [nGEE5B615N]*Dalsvyaz 9-month earnings rise 25 pct [nGEE5B60GL]*EARNINGS POLL-Mechel Q3 net seen at $61 mln [nGEE5B60SQ]*EARNINGS POLL-LUKOIL Q3 net seen down 36 pct [nGEE5B60O4]*EARNINGS POLL-Magnit Q3 net seen up 21 pct [nGEE5B61M4] ECONOMY/POLITICS:*Russia mourns as club fire victims are buried [nGEE5B60F4]*VEB opposes hasty reform of Russian state corp [nGEE5B625U]*Russia's c.bank bought $7.3 bln in Nov [nGEE5B60F7]*Weaker oil drags Russian rouble down to 1-wk low [nGEE5B61D9]*TABLE-Real rouble rate down 2.2 pct pct Jan-Nov [nGEE5B60L0]*Russia c.bank collateral-free loans auction fails [nGEE5B60QO] ENERGY:*INTERVIEW-RWE sees Turkmen Nabucco deal in H1'10 [nGEE5B6139] COMMODITIES:*Kazakhstan to ship grain to China, Southeast Asia [nGEE5B601R]

*Exporters' activity supports Russian grain prices [nGEE5B608E]*Russian 2010 winter grain crop seen 45 mln T [nGEE5B616N] MARKETS CLOSE/LATEST: RTS .IRTS 1,382.8 -0.50 pct MSCI Russia .MIRU00000PUS 771.0 -2.78 pct MSCI Emerging Markets .MSCIEF 978.7 -1.17 pct Russia 30-year EurobondRU011428878= yield: 5.338/5.302 pct EMBI+ Russia 11EMJ 223 basis points over Rouble/dollar RUBUTSTN=MCX 29.1979 Rouble/euro EURRUBTN=MCX 43.9807 NYMEX crude CLc1 $74.22 +$0.29 ICE Brent crude LCOc1 $76.85 +$0.42 For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE]

Reuters: Russia in no hurry to transform VEB - Kremlin aidehttp://in.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idINGEE5B70C020091208

Tue Dec 8, 2009 1:20pm IST

MOSCOW, Dec 8 (Reuters) - Russia's VEB bank will not be among the first wave of state corporations to be transformed into joint-stock companies and its partners have nothing to worry about, Kremlin's top economic aide said on Tuesday.

The comments appeared to mark a softening of stance from Russian President Dmitry Medvedev's pledge last month to disband inefficient state corporations and turn the rest into joint-stock companies as early as next year. [ID:nLC503874]

VEB head Vladimir Dmitriev has lashed out against Medvedev's proposal, saying his bank should not be subject to a "hasty" privatisation and that the mere discussion of such a move was damaging its business. [ID:nGEE5B625U]

"There will be no rush... In the future, all state corporations will act in different legal format," Kremlin's top economic aide Arkady Dvorkovich told an event organised by VEB.

"(But) I think that VEB will be far from the first rows of the organisations in this transformation into joint-stock companies. Its partners do not need to worry." (Writing by Toni Vorobyova; Editing by Dan Lalor)

Reuters: VEB opposes hasty reform of Russian state corporationshttp://www.forexyard.com/en/reuters_inner.tpl?action=2009-12-07T202126Z_01_N07174151_RTRIDST_0_RUSSIA-VEB-PRIVATISATION

* State bank says talk of privatization hurting its business

* Says it has unique role in Russian economy

* Debate about future of corporations heating up

MOSCOW, Dec 7 (Reuters) - Russian state bank VEB on Monday said it should not be subject to a "hasty" privatisation, saying that the mere discussion of it was damaging its business.

Russian President Dmitry Medvedev has called for the disbandment of inefficient state corporations, created by his predecessor Vladimir Putin ID:nLC503874.

Putin, now Russia's prime minister, said on Dec. 3 that giant state corporations were "a necessity" although adding some could cease to exist. ID:nGEE5B21PD

Medvedev's economic aide Arkady Dvorkovich has said VEB could be turned into a joint stock company as early as 2010.

"We are not afraid of anything in this process. But one should realise what prospects we could face in case of a speedy and hasty privatisation," VEB's head Vladimir Dmitriyev, a close ally of Putin, told reporters on Monday.

The government used VEB as a lender of last resort when bailing out companies from aluminium giant RUSAL to developer PIK at the height of the crisis last year.

On Monday, VEB said it was prepared to invest in RUSAL's share offering without spooking the market by abruptly selling its blue chip share portfolio. ID:nGEE5B60XE

"No commercial bank in Russia is capable of doing what VEB is doing under its current mandate," said Dmitriyev.

"The bank has been created for certain purposes and its work as an anti-crisis tool has shown that it can accomplish serious tasks ... Any inaccurate comment about turning us into a stock holding company prompts a painful reaction from our partners."

Dmitriyev said a number of Japanese banks have put on hold a project to co-fund ailing car maker AvtoVAZ together with VEB due to uncertainty over VEB's future. He did not elaborate.

During Russia's economic boom years under Putin, some state corporations became conglomerates with sway over entire sectors such as defence equipment, strengthening the Kremlin's grip over the economy.

Analysts have said Medvedev's attack on state corporations had probably been agreed with Putin and any such move would be aimed at clawing back state money. They also noted the rise of the conglomerates had continued under Medvedev.

VEB's supervisory board is chaired by Putin, and another major corporation, Russian Technologies, is headed by a close Putin ally, Sergei Chemezov.

(Reporting by Dmitry Zhdannikov; Editing by Phil Berlowitz)

Bloomberg: Russian Stocks Cut to ‘Neutral’ at JPMorgan on Commodity Riskshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aR48z1j0bBrU

By Shiyin Chen

Dec. 8 (Bloomberg) -- Russian stocks were cut to “neutral” from “overweight” within global emerging markets at JPMorgan Chase & Co., which cited a “potential correction” in energy and commodity markets.

Gains in the U.S. dollar, a reversal of fund inflows out of commodity markets and regulatory intervention are the key risks that may halt a rally in raw material prices, JPMorgan analysts led by Adrian Mowat wrote in a report today.

“Commodity markets have lost their momentum and the dollar has recovered following the recent U.S. employment data,” the analysts wrote. Russia is “high-beta, commodity-sensitive, and a consensus trade. In our view it is prudent risk management to move from overweight to neutral now,” they said.

Russian stocks are the world’s best performers this year, with the 30-stock Micex index having more than doubled. Energy and commodity suppliers make up eight of the 10 biggest companies by weighting on the Micex, which yesterday dropped the most in more than a week.

The Dollar Index, a gauge of the currency against six major trading partners, rallied 1.7 percent on Dec. 4, the most since January after the Labor Department said the U.S. lost 11,000 jobs last month, the fewest since the recession began and less than one-tenth the 125,000 median estimate in a survey of economists. The unemployment rate dropped to 10 percent.

Since the labor data, crude oil has dropped 2.9 percent and is now trading near $74 a barrel on the New York Mercantile Exchange. Gold has also declined 4 percent, while copper has retreated for three straight days.

Gazprom, Bad Debts

Still, JPMorgan isn’t turning “underweight” on Russian equities, saying that demand and export pricing for OAO Gazprom, the nation’s gas export monopoly, as well as declining bad debts may be catalysts.

The market looks “attractive” on a 12 to 18-month horizon, given the expectations of economic and earnings growth, as well as the market’s valuation relative to other developing nations, they said.

Mowat, the brokerage’s Hong Kong-based chief Asian and emerging-markets strategist, said on Dec. 2 the MSCI Emerging Markets Index may rise to 1,300 by the end of 2010 as low interest rates and a global economic recovery spur earnings growth. That’s a gain of 33 percent from yesterday’s close.

To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net.

Last Updated: December 7, 2009 19:45 EST

Reuters: UC RUSAL appoints Chinese non-executive directorshttp://www.iii.co.uk/news/?type=afxnews&articleid=7661409&subject=markets&action=articleMOSCOW, Dec 8 (Reuters) - Indebted Russian aluminium giant UC RUSAL, which plans a Hong Kong stock listing, has appointed two Chinese independent non-executive directors in a move the company said highlights its interest in China. UC RUSAL appointed Barry Cheung Chun-Yuen, chairman of the Hong Kong Mercantile Exchange, and Elsie Leung Oi-Sie, a former secretary for justice and member of the executive council of the Hong Kong Special Administrative Region government."Given UC RUSAL's long-term strategic interest in China and the wider Asian region, we have been looking for directors who have direct experience in these markets to give us advice," UC RUSAL Chief Executive and biggest shareholder Oleg Deripaska said in a Tuesday statement.

(Reporting by Robin Paxton, Editing by John Bowker) Keywords: RUSAL/ (robin.paxton@reuters.com; +7 495 775 1242; Reuters Messaging: robin.paxton.reuters.com@reuters.net)

Bloomberg: Rusal IPO Said to Be Postponed by Hong Kong Exchange (Update2)http://www.bloomberg.com/apps/news?pid=20601080&sid=auVuCO3tYbnU

By Yuriy Humber and Bei Hu

Dec. 8 (Bloomberg) -- United Co. Rusal, the world’s biggest aluminum company, failed to get approval for an initial public offering of as much as $3 billion in Hong Kong, three people familiar with the matter said.

The stock exchange’s listing committee needed more time to study the $16.8 billion debt restructuring accord Rusal completed last week, one of the people said, declining to be identified because the matter is private. Yesterday’s decision will delay the IPO until next year, the people said.

Rusal, controlled by billionaire Oleg Deripaska, wanted to capitalize on a 55 percent jump in Hong Kong’s benchmark stock index in 2009 to become the first Russian company to list in the city. The IPO would have helped Deripaska expand in China, where a government stimulus has revived economic growth, helping boost demand for aluminum.

“This is a really big smack in the face for Rusal,” John Meyer, head of natural resources at investment bank Fairfax I.S. Plc in London, said by phone. “It also means it may be halfway through next year before the IPO is conducted, and unfortunately for them, the outlook is anything but certain.”

Moscow-based Rusal was seeking to sell a 10 percent stake to help repay debt incurred after buying OAO GMK Norilsk Nickel, Russia’s biggest mining company. More than 70 Russian and foreign banks reached the debt accord with Rusal in Russia’s largest corporate restructuring.

More Time

Lorraine Chan, a spokeswoman for Hong Kong Exchanges and Clearing Ltd., declined to comment or confirm whether the listing committee has met for a Rusal IPO plan.

“The stock exchange is prepared to work with challenging companies and they have a lot of confidence in their system,” Anthony Root, head of Asian corporate practice at New York-based law firm Milbank, Tweed, Hadley & McCloy LLP, said. The exchange won’t grant approval for a share sale “until they are confident it’s one that’s fit for listing.”

Rusal may seek a listing in the first quarter as it expects aluminum prices to rise to $2,500 a metric ton, one of the people said. Aluminum for delivery in three months on the London Metal Exchange traded at $2,154 as of 9:17 a.m. Hong Kong time.

Aluminum futures have risen 40 percent in London this year as investors bet China’s $586 billion stimulus spending will spur demand from builders and automakers. Alcoa Inc., the largest U.S. producer, said in September that Chinese demand will climb 4 percent this year, compared with a previous prediction of zero growth.

Rusal plans to win seven to eight major customers in China to secure long-term deliveries, head of strategy Artem Volynets said in November. It won a six-year contract last month to supply China North Industries Corp. with 1.7 million tons.

Debt Doubles

Rusal’s debt almost doubled after it bought 25 percent of Norilsk Nickel for $7 billion in cash and a 14 percent Rusal stake. Commodity prices subsequently collapsed, and Rusal had a net loss of $6 billion last year, Vedomosti reported in October.

The company’s lenders include Royal Bank of Scotland Group Plc, Deutsche Bank AG, Sumitomo Mitsui Financial Group Inc., Barclays Plc, BNP Paribas SA, and Natixis. Vnesheconombank, or VEB, is the biggest creditor.

Deripaska was rated by Forbes magazine as the richest Russian last year. His ranking declined to 10th in 2009 after commodities, stocks and the ruble collapsed.

The Russian aluminum producer is in talks with potential investors including China Investment Corp., the nation’s sovereign wealth fund, and Singapore’s Temasek Holdings Pte, the Hong Kong Economic Journal wrote in October.

The Hong Kong exchange has already delayed Rusal’s listing twice in the past month. The city ranked as No. 2 globally for funds raised through initial public offerings in the first half of this year, after Brazil, according to data released by the city’s bourse.

To contact the reporters on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net; Bei Hu in Hong Kong at bhu5@bloomberg.net

Last Updated: December 8, 2009 01:58 EST

FT.com: Rusal put in tight spot by HK's delayhttp://www.ft.com/cms/s/0/c7e3e390-e399-11de-9f4f-00144feab49a.html

By Catherine Belton in Moscow and Tom Mitchell in Hong,Kong

Published: December 8 2009 02:00 | Last updated: December 8 2009 02:00

The Hong Kong Stock Exchange's decision to again delay its approval of UC Rusal's plans to list this year appears to signal the end of Oleg Deripaska's breakneck attempt for a $2bn initial public offering of the aluminium group before Christmas.

This delay a concern because Mr Deripaska needs to raise $1.2bn by the end of next year to start paying off the company's $17bn in debts.

Even though last week's restructuring agreement gave Mr Deripaska four years to reduce $7.4bn in debts owed to foreign creditors, he must meet targets within that time frame, according to one person close to the deal.

Mr Deripaska and the other billionaire shareholders were still deep in discussion last night as to whether to call off the race to list by the end of the year and postpone until 2010. But other people involved in the process were already calling time on the high-stakes bid to make Rusal the first Russian company to be listed on the Hong Kong Stock Exchange.

The new delay meant the company would have at most five days to market the offering - and even that time frame was unclear. "We have run out of road at this point," said one person close to the situation.

"Everyone is now looking to 2010," said another.

The rush to list by the end of the year - Mr Deripaska's third attempt to take his company public - had been fraught with risk from the start. The bid began in earnest only in early September, when it became clear that global market conditions were improving, people close to the matter say.

"Usually companies submit documents to Hong Kong at least three months before the listing. Rusal submitted only in October," said another person close to the situation. "By definition, we started with a timetable that was very tight."

Another person said: "Deripaska is a gambler."

In the end, after several delays, the race to list was so close that it reached the point where "a single question from Hong Kong could put it in question for this year", said another insider.

The speed was a tall order for any Russian company seeking to be the first to list in Hong Kong - but even more so for a company that has been surrounded by questions over Mr Deripaska's controversial climb to the top of the Russian aluminium industry, people close to the matter say.

Russia's one-time richest man has faced questions over past connections to Michael Cherney and Anton Malevsky. Mr Deripaska says that Mr Malevsky, the reputed head of the Izmailovsky organised crime group, who died in a parachute accident in 2001,

extorted protection money out of him during a chaotic period in Russia and was never his partner. He also denies having been in partnership with Mr Cherney.

But a London judge has said Mr Cherney had a "good arguable case" in a claim he has filed in London's High Court for a disputed 13 per cent stake in the company. Mr Cherney denies any ties to organised crime.

Mr Deripaska has also faced problems trying to win an entry visa to the US. The State Department will not disclose the reason why it has refused him a full visa. But Mr Deripaska travelled twice to the US this year on one-off special permits, people familiar with the situation say.

The exact reasons for the postponement from Hong Kong were unclear last night as it was still to brief the company on the delay. But several people close to the situation said that in the end, surprisingly, the main issue raised in discussions today was uncertainty about a $4.5bn loan issued to Rusal by VEB, the Russian state-owned bank. "The exchange is saying if you want to conduct an offer to retail investors in Hong Kong, the fact that this company has a $4.5bn loan that needs to be rolled over or refinanced in October next year is too risky for the Hong Kong market and for retail investors," said one person with knowledge of the situation. "This comes despite several very explicit assurances from the state. It is a silly issue."

The Russian government has made no secret of its support for Mr Deripaska in recent weeks, throwing its backing behind the IPO by indicating that VEB could buy up to 3 per cent of Rusal's shares in the offering, while Sberbank, another state-controlled bank, has said it could participate too. But Hong Kong, it seems, remains unconvinced.

The company must seek to roll over the loan when it falls due in October next year. VEB already agreed to extend it by one year this year, but it cannot extend the tenure without changing Russian laws on placing central bank deposits on account with VEB.

The delay could mean Mr Deripaska could face new pressure from the state next year in spite of the public display of support in recent weeks.

"If, come May or June, there has been no progress on deleveraging, I think they have got a problem," said one person close to the offering. "I would not like to have to go to number one [Vladimir Putin, prime minister] and say please roll over $4.5bn again for another year. They could tell him to hand over the Norilsk Nickel stake."

But others said the delay into next year could have a silver lining as aluminium prices look to be heading for a continued rally into 2010, while the company will no longer have to fight for the attention of investors focused on Christmas.

"They could have lost 15 to 20 per cent off the valuation due to the holiday as investors have had a phenomenal year and they say there are all going on vacation and are in the

Caribbean," said one insider. "Investors don't need to look at such a large IPO before Christmas . . . This could push the valuation over $20bn."

Credit lines and state takeovers

Recent debt restructurings by Russian companies

* UC Rusal, the aluminium giant, said last week it had reached agreement on restructuring $16.8bn in debts, which extend its payments over seven years.

* Evraz raised more than $800m in July through a bond issue and share sale that allowed the steelmaker to refinance part of its $8.5bn debt. Last month, it had reached agreement to amend covenants on $3.6bn in loans.

* Mechel, the steelmaker, said in July it had signed agreements to refinance $2.6bn of its total $5.8bn debts. It had breached covenants on $4.2bn of the loans.

* Pik Group, the property developer, said it had reached an agreement with creditors to freeze payments on $1.26bn in debt back in May.

Indebted companies that have been taken over

* Sistema, the Moscow conglomerate, sold its property arm Sistema-Hals to Russian state bank VTB on April 7 for $2 as payment for a $700m loan.

* Sibir Energy, the London-listed oil producer, is being taken over by Gazprom Neft, the state oil group.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

RIA: NLMK receives US GAAP net loss of $79 mln in 9M09http://en.rian.ru/business/20091207/157143590.html

18:1907/12/2009

Novolipetsk Steel (NLMK), one of Russia's largest metallurgy companies, posted a US GAAP consolidated net loss of $79 million in the first nine months of 2009, the company said.

NLMK had a net profit of $2.76 billion in the same period last year.

NLMK said the $79 million loss was due to recognition of its share in the losses of Steel Invest & Finance S.A., a joint venture, which constituted $344 million.

The company's earnings in 9M09 declined by 55% to $4.33 billion.

EBITDA in the first nine months of 2009 was $917 million, 77% less than in the same period 2008.

MOSCOW, December 7 (RIA Novosti) 

Bloomberg: Hambro Eyes Place in Family Pantheon With Bet on Russian Goldhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=ah_7K4Q7909c

By Thomas Biesheuvel

Dec. 8 (Bloomberg) -- Peter Hambro, chairman of gold miner Petropavlovsk Plc, says even his 94-year-old mother keeps a close watch on the company’s stock price, which has tripled in 2009.

“She checks on the share price three times a day and calls me if the price is aberrational,” says Hambro after taking her latest phone call in his office in London’s Belgravia district, which has views over the gardens of Buckingham Palace. “It’s a family business.”

Bolstered by record gold prices, Petropavlovsk is on the cusp of joining the FTSE 100 index of U.K. companies 15 years after Hambro helped found the miner. The 64-year-old former bullion dealer and member of the Hambro trading and banking dynasty has used his name and connections to woo investors to his pioneering bets on developing mines in Russia.

“My family, being very famous, rich and glamorous bankers, we’re directors and non-executive chairman of all sorts of companies,” Hambro says, opening up a book containing his family tree. “Being executive chairman and 6 percent shareholder of one you have helped to found is a bit different.”

FTSE Group announces changes in its quarterly review tomorrow after the equity market closes today. Companies can join the FTSE 100 Index if they rank among the top 90 by full market capitalization and may be deleted if they fall to 111th or lower. Changes will take effect after Dec. 18’s market close.

Early Pioneer

Petropavlovsk was known as Peter Hambro Mining Plc until September, when it was rechristened to reflect the Russian name for Peter and his business partner Pavel Maslovskiy. The Hambro name helped reassure initial nervous investors, Maslovskiy says.

“Everybody finds it very difficult to operate in Russia,” says Mark Bristow, chief executive officer of Randgold Resources Ltd., a Jersey, Channel Islands-based company

that’s the sole gold-only miner in the FTSE 100. “Hambro was one of the early pioneers in there, and has made it work.”

Hambro was educated at Eton College, whose former students include 18 British prime ministers, Princes William and Harry and author George Orwell, according to Eton’s Web site. He started work as an accountant in 1964, spent a year at Hambros Bank, which was then still controlled by his family, and later traded bullion at Marc Rich Group and Mocatta & Goldsmid Ltd.

“What originally worked well for him was being very posh and very rich,” said Jonathan Guy, an analyst at Investec Securities in London who recommends investors buy Petropavlovsk stock.

London Offering

Hambro met Maslovskiy, 52, a former professor at the Moscow Aircraft Technology Institute, when the Russian visited London in 1994 looking for investors. Maslovskiy had a license for a gold deposit about 30 miles from the Chinese border. Hambro agreed to invest $5 million over lunch, Maslovskiy said

The company sold 1.8 million pounds ($3 million) of shares in an initial public offering in 2002 on London’s Alternative Investment Market. Hambro holds 6 percent of Petropavlovsk worth about 132 million pounds, according to data compiled by Bloomberg. Maslovskiy is the biggest investor with 10.5 percent.

“Peter has such a trait in his character as healthy adventurism,” Maslovskiy said. “He’s ready to risk and accept the unexpected conditions that may arise in an unfamiliar country.”

The unexpected occurred in 2006 when Oleg Mitvol, deputy head of the Russian Natural Resources Ministry’s environmental inspectorate, said Peter Hambro Mining might lose its licenses because it hadn’t fulfilled terms of an agreement. The shares slumped 20 percent in 2006 before the company won the support of the government following meetings.

Aricom Deal

Petropavlovsk shares plunged 71 percent in the second half of 2008 as commodity prices tumbled, investors withdrew from Russia and the credit crisis choked off lending. In April, the company bought back $40 million of its bonds convertible into gold from a hedge fund. Concern the fund would sell was depressing the shares, Hambro said.

Petropavlovsk paid $172.5 million in April for Aricom Plc, an iron-ore miner it spun off six years earlier, to gain control of Aricom’s $257 million cash pile. Hambro and Maslovskiy were forced to lend Petropavlovsk $19.3 million in November 2008.

“Last year was very hard,” Guy at Investec said. “If Peter and Pavel hadn’t had the capacity to put their hands in their own pockets and put some new money into the company it could very well have completely fallen to pieces.”

Gold Record

Few western companies have succeeded in Russia, Guy said. Hambro’s success has been down to having a local partner in Maslovskiy, having assets the Russian government doesn’t find offensive and paying their taxes on time, he said.

Gold, which has gained 32 percent this year and hit a record $1,226.56 an ounce on Dec. 3, is set for a ninth annual gain, or the longest winning streak since at least 1948. Petropavlovsk targets output of 500,000 ounces in 2009 and 1 million ounces in 2012. Hitting this year’s target will see it surpass Randgold.

Petropavlovsk’s share price gain this year compares with Randgold’s 70 percent advance in London, while the 15-company FTSE 350 Mining Index added 99 percent.

Petropavlovsk employs Hambro’s son Jay, the former chief executive officer of Aricom. Another son, Leo, is CEO of Russian Timber Group Ltd., in which Hambro and Maslovskiy are the largest shareholders. Jay and Leo’s brother Evy helps manage BlackRock Investment Management Ltd.’s flagship $11.6 billion World Mining Fund in London. The fund held 1.7 million shares in Petropavlovsk as of Aug. 31, according to data compiled by Bloomberg.

“Russia is a minefield,” said Robert Stafler, a former JPMorgan Cazenove banker who advised Hambro on bond offerings. Hambro “knows where to step and where not to step. He knows when to form alliances and when to do it himself.”

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

Last Updated: December 7, 2009 19:00 EST

Banking Business Review: IFC Partners With Association of Regional Banks of Russiahttp://riskmanagemnet.banking-business-review.com/news/ifc_partners_with_association_of_regional_banks_of_russia_091208/

Published: 08-Dec-2009

To promote regional banking sustainability

IFC, a member of the World Bank Group, is partnering with the Association of Regional Banks of Russia to improve risk management and loan resolution practices, facilitate the

transfer of distressed assets and assist Russian regional banks with refinancing options to promote regional banking sustainability.

This agreement is part of the IFC crisis management advisory program in Europe and Central Asia aimed at strengthening financial markets in countries most affected by the economic crisis, so that financial institutions will emerge from the downturn and resume lending to the real sector in a more sustainable fashion.

IFC will work with selected member banks to assess their risk management and loan resolution practices, provide targeted advisory services to strengthen risk and loan portfolio management practices, and restructure and transfer distressed assets. IFC also will promote financial instruments for recapitalizing banks and handling distressed assets and will provide ongoing support of trade finance and energy efficiency investments.

Anatoly Aksakov, president of the Association of Regional Banks of Russia, said: “Currently, most Russian regional banks cannot rely on state financial aid. However, these banks play significant roles in their respective markets, especially in remote regions. We believe that this agreement will raise our cooperation with IFC to a new, higher level and make our joint efforts to support regional banking systems more systemic and strategic.”

Jyrki Koskelo, vice president of Europe, Central Asia, Latin America and the Caribbean, and global financial markets at IFC, said: “IFC’s strategy in Russia and wider region is to support banks in expanding access to finance for local small and medium businesses, thus contributing to the diversification of regional economies and increased employment. We are very pleased to partner with the Association, and look forward to continued successful cooperation.”

Dow Jones: EBRD May Invest Between $500 Million-$1 Billion In Russian High tech Sectorhttp://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200912071228dowjonesdjonline000223&title=ebrd-may-invest-between-500-million-1-billion-in-russian-high-tech-sector

LONDON -(Dow Jones)- The European Bank for Reconstruction and Development said Monday it may invest between $500 million and $1 billion in Russia's high-tech sector over the medium term.

The announcement comes after the bank's president Thomas Mirow signed a memorandum of understanding with Anatoly Chubais, the chief executive of the Russian Corporation for Nanotechnologies, or Rusnano, a $5 billion government fund to develop a Russian nanotechnology industry.

"Both parties are keen to attract investments to this promising segment of the Russian economy, including through equity funds, export credit agencies, Russian and international financial institutions, as well as private investors," the EBRD said in a press release.

The EBRD, which was set up in May 1991, facilitates investment to help develop market economies and democracies from central Europe to central Asia. .

-By Clare Connaghan, Dow Jones Newswires; +44 (0) 20 7842 9496; clare.connaghan@dowjones.com

Posted: December 8, 2009

Nanoweek.com: Rusnano and European Bank for Reconstruction and Development become co-investors http://www.nanowerk.com/news/newsid=13909.php

(Nanowerk News) A solemn ceremony of signing the Memorandum of Understanding between RUSNANO and the European Bank for Reconstruction and Development took place today. The document was signed by Anatoly Chubais, RUSNANO CEO, and Alain Pilloux, Director for Russia, Advanced Transition Countries and Specialised Industries.

The Memorandum documented the intention to expand cooperation between RUSNANO and the EBRD, as this organizations share common goals: to promote the commercialization of promising scientific and technological advancements and create conditions for sustainable innovation development.

In particular, the parties intend to jointly fund nanotechnology projects in Russia. The EBRD intends to invest in such projects from 500 million to 1 billion euros in the medium term. The following fields of co-financing are marked as priority in the Memorandum: energy efficiency and energy conservation, health and medicine, microelectronics and nanoelectronics.

The parties also intend to attract other co-investors, such as investment funds, credit and export credit agencies, Russian and international financial institutions and other, to participate in the ongoing nanotechnology projects.

Source: RUSNANO

Bloomberg: Mail.ru Picks Google http://www.themoscowtimes.com/business/article/mailru-picks-google/391075.html

08 December 2009

Mail.ru, an Internet portal controlled by Digital Sky Technologies, is in talks with Google to use its search engine, Vedomosti reported Monday, citing an unidentified person familiar with the matter.

Mail.ru plans to let its current contract with Yandex lapse this month because the search engine asked the portal to add its brand on the web site, the newspaper said, citing the person.

Vedomosti said that Vladimir Dolgov, head of Google in Russia, and a press official at Mail.ru declined to comment.

(Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

Oil and Gas Journal: Putin: Turkmen gas line won't disrupt Russian-Chinese cooperationhttp://www.ogj.com/index/article-display/8473986760/articles/oil-gas-journal/transportation-2/pipelines/construction/2009/12/putin_-turkmen_gas/s-QP129867/s-cmpid=EnlDailyDecember72009.html

Dec 7, 2009

Eric Watkins OGJ Oil Diplomacy Editor

LOS ANGELES, Dec. 7 -- Russia’s Prime Minister Vladimir Putin said the newly constructed Turkmen-Chinese natural gas pipeline—due to be tested in about 2 weeks—will not endanger energy cooperation between his country and China.

“We are aware of the Chinese gas needs and have close contact with our Chinese colleagues. We also offer to expand cooperation with them. We do not think that the prospective gas pipeline from Turkmenistan to China will damage our plans,” the Russian leader said.

A framework agreement, spelling out terms of Russian gas supplies to China, was signed in October during Putin’s state visit to Beijing. The agreement signed was a follow-up to previous accords and it details the basic terms of the future contract.

Gas is to be delivered via two routes with 30 billion cu m to be sent through the western route and 38 billion cu m via the eastern route. Russian officials say the gas contract could be signed in June 2010, and that the first gas could be shipped in 2014-15.

Meanwhile, Putin’s remarks coincided with a report that the test launch of the Turkmenistan-China gas pipeline's first branch is scheduled for Dec. 15, according to an official of Uzbekistan’s state-owned Uzbekneftegaz.

“The dress-rehearsal of the launch of the Turkmenistan-China gas pipeline's first branch is scheduled for Dec. 15,” the source told the Interfax news agency adding that there are

plans to carry out the testing of the whole pipeline from Turkmenistan to China by pumping gas into it.

The source also said that 99% of construction of the pipeline's Uzbek section had been finished. “We successfully carried out a hydraulic testing at our section of the gas pipeline and we have two more weeks to deal with the secondary construction work,” the source said.

The Uzbek section of the pipeline, worth $2.975 billion, passes through 530 km of the country, including the regions of Qashqadaryo, Buxoro, and Navoiy. The line can transport as much as 40 billion cu m/year of gas.

Contact Eric Watkins at hippalus@yahoo.com.

Reuters: Total says Shtokman decision delayed until end-2010http://uk.reuters.com/article/idUKGEE5B70EW20091208

Tue Dec 8, 2009 8:29am GMT

MOSCOW, Dec 8 (Reuters) - A final investment decision on Russia's giant Shtokman gas field is impossible before the end of 2010, nine months later than planned, due to problems with financing, project member Total (TOTF.PA: Quote, Profile, Research) said on Tuesday.

"In the current conditions, it is absolutely normal that the project is taking more time than was initially planned," said Arnaud Breuillac, Total's vice-president for exploration and production in Central Europe and Continental Asia.

Shtokman, whose first phase is estimated to cost $15 billion, is led by Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) with Total and Norway's Statoil (STL.OL: Quote, Profile, Research) holding minority stakes. (Reporting by Anton Doroshev)

Bloomberg: Lukoil Third-Quarter Net Falls 41% to $2.06 Billionhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=assL2G0TR9.4

By Stephen Bierman

Dec. 8 (Bloomberg) -- OAO Lukoil’s third-quarter net income fell 41 percent to $2.06 billion, the company said in an e- mailed statment today.

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

Last Updated: December 8, 2009 02:04 EST

Upstreamonline: Lukoil results miss forecast http://www.upstreamonline.com/live/article200972.ece

Lukoil, Russia's second largest oil producer, missed forecasts with a 40% tumble in third-quarter profit as oil prices fell and the rouble depreciated against the dollar.

News wires  Tuesday, 08 December, 2009, 08:36 GMT

The company, 20% owned by US oil major ConocoPhilips, saw its net income attributable to shareholders dropped to $2.056 billion in the three months to end September, down from $3.472 billion in the same period last year.

Analysts polled by Reuters had expected net profit to fall to $2.215 billion.

Lukoil shares traded 1.2% lower at 0758 GMT, underperforming the broader Russian market, MICEX, and MICEX's oil and gas indexes

Sales came in at $21.91 billion, below the poll forecast of $23.27 billion.

"The decrease in sales was due to a significant decrease in hydrocarbon prices compared to the third quarter of 2008," the company said in a statement.

"Moreover, the devaluation of the rouble against the US dollar in 2009 also seriously affected our average realized prices in Russia."

Earnings before interest, taxation, depreciation and amortisation (EBITDA) fell to $3.70 billion from $5.66 billion in the third quarter of 2008 compared to forecast of $3.925 billion.

Published: 08 December 2009  | Last updated:  08 December 2009

Gazprom

UkrainianJournal.com: President: Gazprom may seize Naftogaz if company goes bankrupthttp://www.ukrainianjournal.com/index.php?w=article&id=9572

Journal Staff Report

KIEV, Dec. 7 - President Viktor Yushchenko warned there was a threat that Russian gas giant Gazprom may eventually acquire Ukraine’s natural gas pipelines in a debt-for-assets

transaction, and said the government was doing little to prevent the scenario.

The comment underscores Yushchenko’s push for changing the controversial 10-year natural gas agreement negotiated between Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko in January.

RIA: Gazprom to invest $500 mln in India, Vietnam offshore fieldshttp://en.rian.ru/business/20091208/157151401.html10:2108/12/2009

Russian energy giant Gazprom plans to spend some 14.9 billion rubles ($505 million) on oil and gas offshore development in India and Vietnam in 2010, a business daily said on Tuesday.

A Gazprom official confirmed that the Russian gas monopoly will invest 5.48 billion rubles ($186 million) in India's Bay of Bengal, and another 9.43 billion rubles ($319 million) in Vietnamese PSA projects, Vedomosti said.

However, the exact amount of work on Indian and Vietnamese offshore fields is not disclosed. Vedomosti said Gazprom is prospecting for gas in a block in the Bay of Bengal, where reserves are expected to be certified in 2012, and has six blocks in Vietnam, where gas production could start in 2015 at the earliest.

Denis Borisov, an analyst with the Bank of Moscow, told the paper the aggregate reserves of Gazprom's projects in India and Vietnam stood at some 1.1 billion metric tons of oil equivalent, which accounts for 3.7% of the company's proven reserves.

The paper described the prospected investment abroad as serious for the Gazprom 2010 budget even in comparison to Russian offshore projects. The allocation for Shtokman, a giant gas condensate field in the Barents Sea, will be kept at this year's level of some 13 billion rubles ($440 mln) in 2010, an insider told Vedomosti.

Gazprom has projects in a number of countries, from Kazakhstan to Bolivia, but it has not yet started natural gas production anywhere outside Russia.

MOSCOW, December 8 (RIA Novosti)

The Times of India: Gazprom to get reprieve as govt eyes Russian oilhttp://timesofindia.indiatimes.com/biz/india-business/Gazprom-to-get-reprieve-as-govt-eyes-Russian-oil/articleshow/5312235.cms

Sanjay Dutta, TNN 8 December 2009, 12:58am IST

NEW DELHI: Anxious to get a bigger pie of the hydrocarbons treasure under Moscow's watch, the oil ministry has decided to make an exception for Gazprom. The ministry is to move the Cabinet for approval to charge the Russian giant in kind - rather than cash - the penalty for incomplete work and delays in exploring an offshore acreage as well as allow more time to complete work.

Gazprom had run into trouble with the exploration regulator for taking the survey data, considered sensitive, to Russia for Block NEC-OSN-97/1 without the defence ministry's permission. It also missed the promised timeline of exploration phases and complete the committed work for the NELP-1 acreage it had won in partnership with gas utility GAIL, which later exited leaving 100% ownership to the Russian firm.

The company had been given several time extensions of short durations earlier but was facing the prospect of shelling out some $13 million by way of penalty and damages for unfinished tasks as well as losing the block. The ministry is now ready to allow it 18 months more to complete the unfinished job in the third phase of the exploration work and allow the company to make good the cash component of the penalty and damages with extra work.

Gazprom's troubles has been one of the niggles in India's ties with Russia, the other being state-run generation utility NTPC's push to cancel a major equipmemt contract to Technoprom Exports over bribery charges. Moscow has time and again indirectly hinted that if New Delhi should "resolve" these issues if it wants a bigger access to Russian energy sources.

Sources said Gazprom's troubles emerged as one of the sore points while seeking Kremlin's clearance for OVL's $2-billion acquisition of Imperial Energy that has fields in Siberia. With OVL eyeing stakes in Sakhalin-III, Timon Pechora and other acreages - expected to be auctioned soon - oil ministry's move indicates it is taking no chances.

The task has been made easy by the fact that making an exception for Gazprom is "merely an operational issue and does not involve equity, and public accountability".

Novinite.com: Russia Energy Giant Gazprom Set for Bulgaria South Stream Talks

http://www.novinite.com/newsletter/print.php?id=110836

2009-12-08 10:14:58

Russian energy giant Gazprom’s spokesman, Sergei Kupriyanov, stated late Monday that the company will discuss Bulgaria’s position on the South Stream gas pipeline project in Sofia on Thursday.

Kupriyanov said that "The new Bulgarian government declared that it wants to reconsider the contracts were signed with Russia in the energy field. It has said that it will not back out of them at least for now. We are convinced that such a chance to fall once in life, and

that common sense regarding the ‘South Stream’ will surely take a charge in Bulgaria. At least, certainly this issue will be discussed at a forthcoming meeting in Sofia." BGNES reported.

A bilateral meeting of the Russia-Bulgaria intergovernmental commission will be held in Sofia on 10-11 December and will concentrate on energy issues.

Russia Energy Minister Sergei Shmatko, who will attend the talks, said last week “I think we will have problems,” regarding the Burgas–Alexandroupolis oil pipeline prospects.

Russia Today: Contracted gas volumes not trigger for new new Ukraine gas dispute http://rt.com/Business/2009-12-07/contracted-gas-volumes-not.html/print

07 December, 2009, 22:42

Gazprom’s position on payment for contracted gas volumes will not trigger a dispute with Naftogaz of Ukraine this winter, warming the outlook for European consumers dependent on uninterrupted supplies of Russian gas.

The Russian gas giant’s position with European consumers is that where they contract for specific volumes then they should take these and pay for them. That currently sees European firms owing an estimated $2.5 billion for gas, which they have contracted for, but haven’t needed over the course of this year, with demand slashed by the economic downturn.  

However speaking with RT’s Al Gurnov, Gazprom spokesman, Sergey Kupriyanov, confirmed the issue will not trigger a gas dispute this year with the Russian monopoly exporter to forego revenues of at least $1.3 billion in the wake of the recent agreement signed off between Prime Minister Putin of Russia and his Ukrainian counterpart.

“It depends on how you make calculations. If we take the minimum annual amount of gas that Naftogas could have purchased from us in 2009 and compare it to what happens in reality, what we have is, we expect annual sales to reach 26.6 billion cubic metres, while we were supposed to sell 32 billion at the very least. With this years average price being $236 U.S. dollars per thousand cubic metres we get an amount of $1.3 billion U.S. dollars. And this does not include any penalties and actual amounts – it’s the bottom figure.”

Acknowledging that with the Ukraine economy in dire straits it would be nearly impossible to impose penalties for previously contracted gas volumes, Kupriyanov stated that the issue of 2009 contracted volumes had already been resolved and added that they were unlikely to be an issue for Ukraine in 2010.

“This issue has been resolved for 2009. As for 2010 the amounts we’ve agreed practically bring this risk probability down to zero percent. And we have agreed officially that the agreements we have for now do not apply to any future period, including year 2011 and so on, as our contract is a long term one with a contractual period of 11 years.”

The news comes on top of the confirmed payment for November gas by Naftogaz, pushing the prospect of another gas war further away, despite the parlous finances of Ukraine. 

The Moscow Times: Gazprom: Shale Gas No Threat http://www.themoscowtimes.com/business/article/gazprom-shale-gas-no-threat/391061.html

08 December 2009The Moscow Times

A Gazprom spokesman on Monday dismissed concerns that a growth in the production of shale gas would pose a threat to the company’s foreign sales, voicing the gas giant’s first comment on the prospect.

After gas prices surged last year and early this year, many European gas companies have begun studying the U.S. technology for producing shale gas, which may be a cheaper source of fuel.

“The speculations that shale gas is cheaper than the Russian gas are not true,” Gazprom spokesman Sergei Kupriyanov said in an interview with Russia Today television.

Unlike the operation of Gazprom fields, production of shale gas requires continuous investment to maintain the output, Kupriyanov said.

“It’s a big question whether they are going to make such investments now that the price of gas has dropped on the U.S. market,” he said.

Gazprom runs its fields at peak capacity for a long time after making considerable investment at the development stage, Kupriyanov said, implying that the gas will remain competitive in the long term.

The International Energy Agency warned earlier this year that shale gas would be one of the reasons for traditional suppliers to reduce their business in Europe. Gazprom relies on its European exports for the biggest proportion of its profit.

Kupriyanov also said Nord Stream, a pipeline to carry Russian gas to Germany under the Baltic Sea, remained on schedule to start operating in 2011, earlier than the South Stream. Prime Minister Vladimir Putin said last fall that there was a chance that South Stream, the gas pipeline from Russia to Bulgaria under the Black Sea, would open first.

Kupriyanov said the only risk of disruption in gas transit to Europe across Ukraine comes from the country’s weak fiscal condition and an ongoing presidential campaign for elections next month.“The possibility of some pre-election provocation should not be ruled out,” he said.