Russia 100716

Basic Political Developments VOR: Russia-NATO Council to meet in September Itar-Tass: RF-NATO council to discuss Russia’s European security treaty

initiative - According to Rogozin, the Russia-NATO Council will meet on Friday at the ambassadorial level to discuss the Russian European security initiative. A draft treaty was submitted to NATO in December 3, 2009.

Bernama: Russia-Nato Council May Discuss Anti-missile Defence Cooperation EurActiv: Merkel: EU should talk to Russia on security - German Chancellor

Angela Merkel said yesterday (15 July) that the European Union as well as the NATO military alliance should discuss security issues with Russia, in order to prevent conflicts arising.

Itar-Tass: Russian foreign minister to attend OSCE ministerial meeting in Almaty VOR: US resumes poultry export to Russia - According to Gennady

Onishchenko, supply resumption will be possible only after specialists of Rospotrebnadzor carry out inspection on the US poultry processing factories.

Standart: Shmatko Comes to Sofia to Discuss Gas Prices Oil and Gas Eurasia: Sofia Prepared To Discuss South Stream Details With

Russia Focus: Bulgaria and Russia to discuss South Stream roadmap Novinite: Bulgaria's PM to Report about Russian Talks in Parliament Focus: Parasite on the pipe - Overgas gained over USD 140 million in the 1998 –

2010 period from the difference in the price it offers to Bulgargaz and the cost of gas it pays to Gazprom, the Executive Director of Bulgargaz said, as quoted by the Politika weekly.

M&C: Russian foreign minister to visit former satellite Laos Focustaiwan: President calls for new dimension in Taiwan-Russia ties - In 2009,

two-way Taiwan-Russia trade decreased to US$2.7 billion compared to the 2008 figure of US$3.6 billion as a result of the global financial crisis, which the president said was a sign that there is ample room for the two countries to boost trade and investment.

RIA: Russian customs agents seize 6 tons of luxury furs at China border Korrespondent: Russian TV show continues devastating film about Lukashenko -

On Friday, July 16, the Russian NTV channel shows a movie about the President of Belarus Alexander Lukashenko

VOR: Rustem Khamitov appointed new Bashkir president Itar-Tass: Medvedev accepts resignation of Bashkortostan’s president Moscow News: Medals and pensions for departing Rakhimov RIA: South Ossetian, Abkhazian leaders head to Latin America Trend.az: Luxembourg calls on Russia to fulfill ceasefire agreement Trend.az: Russian parliament ratifies agreement with Turkmenistan - The Russian

parliament ratified the agreement between the Russian and Turkmen governments on the promotion and reciprocal protection of investments, the Russian Federation Council reported.

Interfax: Hizb ut-Tahrir activist wanted by Uzbekistan caught in St. Petersburg

Earthtimes: Critics slam proposed Russian law expanding secret service powers - An open letter to the Russian Federation Council published Friday strongly criticized a law expanding the powers of the Federal Security Service (FSB), due to go to its third and final reading in the State Duma.

Interfax: Militant killed in Nalchik RIA: Explosions on the beach and near the shopping pavilions in Makhachkala Itar-Tass: 2 militants wanted for terrorism killed in special operation in Dagestan VOR: Christian priest killed in Makhachkala MNN: Believers mourn the loss of a leader in Dagestan Pravda: Dubai has officially confirmed the death of Yamadayev AFP: Chechens charged in France over Moscow blasts Russia Today: France detains three Chechens suspected of terrorist links Jamestown: Kremlin Offers Money and Financial Incentives to Change the Mood

in the North Caucasus - by Mairbek Vatchagaev  Frontpagemag: How Russia Manipulates Chechnya - Frontpage Interview’s guest

today is Konstantin Preobrazhenskiy, a former KGB agent who became one of the KGB’s harshest critics

Itar-Tass: RF SKP and Public Chamber call to set up fed service for helping children

Russia Profile: Strange Bedfellows - Although Russian Energy Companies Are Not That Interested in Business With Iran, the Government Still Signed a Russian-Iranian Roadmap on Energy That Will Anger Washington

Tucson Citizen: Russian spy Vicky Pelaez, beneficiary of 1986 amnesty Washington Post: In from the cold? U.S.-Russian relations - By David Ignatius RIA: Russia's Mission Control Center says ISS orbit to be raised by over 3 km VOR: 400 launches of Proton carrier Russia Today: RT explores the relics of the Soviet push for atomic supremacy AFP: Putin meets 'Russian Obama' on regional trip: reports - Putin met Joaquim

Crima at a construction site for new accommodations for servicemen in southern Russia on Thursday and then later even summoned him to a full scale government meeting with regional officials, newspapers said.

RIA: Abramovich to settle Hiddink's pay as Russia coach - paper

National Economic Trends RIA: Russia's summer heat wave threatens higher inflation - paper: Grain prices

may double in comparison with 2009, Pavel Skurikhin, the head of National Union of grain Producers of Russia, told the paper. Grain prices may double in comparison with 2009, Pavel Skurikhin, the head of National Union of grain Producers of Russia, told the paper.

Interfax: CORRECTED: Russian monetary base up 78.7 bln rubles to 5075.3 bln rubles

VTB Capital: State Duma to consider new FX and RUB borrowing thresholds today

RenCap: Industrial production in Russia: Steady growth pauses in June RenCap: Producer prices fall in June Prime-Tass: Statistics: Russia’s industrial output up 10.2% in January–June Moscow Times: Industrial Output Rises 9.7%

Business, Energy or Environmental regulations or discussions Reuters: Russian markets -- Factors to Watch on July 16 Bloomberg: Russia Stocks Advance on $76 Oil, Goldman Sachs U.S. Settlement Bloomberg: Rosneft, Sberbank, RusHydro, AvtoVAZ: Russian Equity Preview Bloomberg: Russia Stocks May Rally 30% in Next 12 Months, ING Groep Says VTB Capital: Connection to electricity grid should be free of charge for

developers, Putin says Forbesrussia: Former Armenian President and head of Sistema become its

shareholders VTB Capital: Sberbank's largest private shareholder Nikolai Maksimov claims

that a court has arrested part of the Sberbank shares he owns Bloomberg: Infineon Not in Talks With Sistema, Chief Tells Sueddeutsche RIA: Russia's VEB may replace Russian Technologies in Boeing contract - paper Reuters: Steelmakers Say They Raised Output in Q2 Financial: EBRD and IFC raise $164 million for Russian private bank Diamonds.net: Yakutia Supports ALROSA's Proposal on Gokhran Diamond Sales Visor Capital: Uranium One’s Board recommends the transaction with ARMZ to

shareholders Itar-Tass: AvtoVAZ, Renault-Nissan to make 300,000 cars a year in 2012 Reuters: Renault affirms investment in AvtoVAZ-CORRECTED-UPDATE 2 Steel Guru: AvtoVaz starts posting profits in Q2 ATC Network: Era Selected for Second Russian Airport

Activity in the Oil and Gas sector (including regulatory) FT: Russian energy industry facing fresh tax blow - A debate is growing between

big oil and the finance ministry that could shape the country’s economic growth for years. Russia’s biggest oil companies claim potential growth in the country’s gross domestic product is being squandered amid uncertainty over taxation.

Reuters: Total eyes up to 25 pct in Russia Yamal LNG-paper Oil and Gas Eurasia: Slavneft Increases Drilling, But Sees Production Slip Oil and Gas Eurasia: SKOLKOVO And TNK-BP Launch Major Projects

Academy In Russia Energy Solutions: Lukoil and ERG Considering Partnership in Renewable Energy

Gazprom RBC: Gazprom Neft named Hunin-6 coordinator Moscow Times: Gazprom Neft to Open AT-9 Bloomberg: Gazprom, Shell Sakhalin Gas Venture Reports Unexpected Profit BBC: Gazprom pipeline 'could harm Russian nature reserve'

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

Full Text Articles

Basic Political Developments

VOR: Russia-NATO Council to meet in Septemberhttp://english.ruvr.ru/2010/07/16/12471880.html

Jul 16, 2010 03:07 Moscow Time 

The Russia-NATO Council may be meeting next already in September in New York, on the fringes of the UN General Assembly.

"It would make a lot of sense to hold a Foreign Minister level meeting when top diplomats of all the 29 nations of the Russia-NATO Council come together," Russia's NATO envoy Dmitry Rogozin said on Friday.

Itar-Tass: RF-NATO council to discuss Russia’s European security treaty initiative

http://www.itar-tass.com/eng/level2.html?NewsID=15323405&PageNum=0

16.07.2010, 02.35

BRUSSELS, July 16 (Itar-Tass) -- NATO will make public its official position on Russia’s initiative to sign a European security treaty at a Friday session of the Russia-NATO Council, Russia’s permanent representative at the North Atlantic Alliance Dmitry Rogozin told Itar-Tass.

According to Rogozin, the Russia-NATO Council will meet on Friday at the ambassadorial level to discuss the Russian European security initiative. A draft treaty was submitted to NATO in December 3, 2009.

“I am somewhat surprised at such a protracted reaction,” Rogozin said. “As far as I know, NATO delegations have had emotional consultations, and finally, NATO has declared its readiness to discuss this issue and to give its opinion on it.” However, Rogozin said he did not expect breakthrough results “with an orchestra and a scouts parade.”

“I hope they will at least provide their arguments about what they like or dislike in the document. Today we are in for an intense, but necessary discussion, which will allow to show hand,” he said.

July 16, 2010 15:07 PM

Bernama: Russia-Nato Council May Discuss Anti-missile Defence Cooperation

http://www.bernama.com/bernama/v5/newsworld.php?id=514072

BRUSSELS, July 16 (Bernama) --- NATO might specify its position concerning its cooperation with Russia in the area of anti-ballistic missile defence at a session of the Russia-NATO Council due Friday, although the issue is outside the official agenda, Russia's permanent representative at the North Atlantic Alliance Dmitry Rogozin told Russia's Itar-Tass news agency.

"The main subject on agenda of the session is NATO's response to the Russia-proposed European security treaty. The second issue is traditionally put as 'miscellaneous,' however, I am sure that this 'miscellaneous' implies anti-missile defence," he said.

According to Rogozin, there are serious disagreements within NATO as regards to cooperation with Russia in the area of anti-ballistic missile defence.

This fact "is perplexing, since the idea of creating a common anti-missile system from Vancouver to Vladivostok was voiced by NATO Secretary General Anders Fogh Rasmussen," he said.

He did not name NATO member states which oppose this approach, saying only that these included countries "that would like to see elements of the US anti-missile shield on their territories."

In this connection, he expressed the hope that Friday's session will "finally spell out a mandate of the Russia-NATO Council's working group on anti-missile defence problems.

Earlier, it was a group on theatre missile defence, which considered "local possibilities for cooperation between Russian and NATO short-range missile interception systems to ensure security of military contingents deployed within joint peacekeeping missions," he noted.

"Now it has been proposed to extend this group's competences to study possibilities for intercepting ballistic missiles targeted at Europe.

"However, as soon as we came close to practical issues of the group's mandate and competences for talks, it has become obvious that there are states within NATO that fear Russia's integration into a common European anti-ballistic missile defence system," Rogozin stressed.

"So, today we may expect a heated debate on this problem," he added.

-- BERNAMA

EurActiv: Merkel: EU should talk to Russia on security http://www.euractiv.com/en/foreign-affairs/merkel-eu-should-talk-russia-security-news-496401

Published: 16 July 2010

German Chancellor Angela Merkel said yesterday (15 July) that the European Union as well as the NATO military alliance should discuss security issues with Russia, in order to prevent conflicts arising.

Background

EU-Russia relations went through a difficult period after Russia and Georgia fought a five-day war in August 2008. The conflict saw Russian troops repel an assault on the breakaway pro-Russian region of South Ossetia, which broke free from Tbilisi's rule in the early 1990s. 

Russia later recognised South Ossetia and Georgia's second breakaway region of Abkhazia as independent states. Russia has thousands of troops stationed in both regions. 

On the energy side, Russian gas giant Gazprom is drawing up long-term plans to strengthen its grip on Europe with pipeline projects backed by the Kremlin (see EurActiv LinksDossier on 'Pipeline Politics').

Last year, Moscow lashed out at a European Commission initiative to modernise Ukraine's gas pipeline system (EurActiv 24/03/09). In Moscow's eyes, the EU executive should have better coordinated this plan with Russia, which is Europe's main gas supplier. 

Russia also dislikes the EU's 'Eastern Partnership' initiative (EurActiv 08/05/09), a plan to foster closer political and economic ties with six former Soviet republics, suspecting that it is designed to substitute the Moscow-centred Commonwealth of Independent States (CIS) with a Brussels-centred alternative. 

However, Russia remains a key EU partner. It is its third largest trading partner and an important exporter of oil and gas. Current cooperation is based on four policy areas: economic and environmental issues; freedom, security and justice; external security; and research and education. 

A new EU-Russia basic treaty is under negotiation.

"We believe we have found a mechanism to raise all this to a higher level within the existing institutions in Brussels - namely to the level of foreign ministers - in order to create an institutional partnership," Merkel said on Thursday at a joint news conference in the Urals city of Yekaterinburg with Russian President Dmitry Medvedev.

"This is not directed against anything," Merkel added. "We need an intensive dialogue to avoid conflicts. If certain problems are not resolved, bigger conflicts could arise from them."

Russia's ties with the West hit crisis point in 2008 when it fought a brief war with Georgia. Differences remain over security, despite a recent warming in relations.

Medvedev has argued for a "new European security architecture" to replace NATO, which Moscow sees as an outdated Cold War institution, but the United States and its European allies have shown little enthusiasm for the idea.

Earlier in the day, Russia and Germany pledged to strengthen economic ties as Medvedev called Europe's largest economy Moscow's "key partner" for the future.

Merkel, who after taking office in 2005 initially adopted a more reserved attitude to Russia than her predecessor Gerhard Schroeder, has increasingly warmed to Moscow, meeting Medvedev for the second time in just a few weeks.

Next conflict Iran?

US President Barack Obama expressed confidence last week that Israel would not attack Iran without first consulting him.

"It is unacceptable for Iran to possess nuclear weapons and we are going to do everything we can to prevent that happening," Obama told Israel's Channel 2 television. "I think the relationship between the US and Israel is sufficiently strong that neither of us try to surprise each other."

But Obama left a lot unsaid, The Guardian commented. He did not say he would oppose or try to block future Israeli air strikes on Iran's nuclear plants – only that he expected to hear about them in advance.

He also did not say that Washington would refuse to assist or participate, directly or indirectly, in any such attack. The US preferred a diplomatic solution, he said. But then came the familiar mantra: "I assure you I have not taken options off the table."

(EurActiv with Reuters.)

Itar-Tass: Russian foreign minister to attend OSCE ministerial meeting in Almaty

http://www.itar-tass.com/eng/level2.html?NewsID=15323328&PageNum=0

16.07.2010, 00.58

MOSCOW, July 16 (Itar-Tass) -- Russian Foreign Minister Sergei Lavrov on Friday leaves for Kazakhstan’s Almaty to attend an informal meeting of OSCE foreign ministers.

The meeting of foreign ministers from 56 OSCE member countries will be held on July 16 through 17.

The ministers will discuss topical problems inside and outside the OSCE area of responsibility, including the situation in Kyrgyzstan and Afghanistan. They will consider intermediate results of the dialogue within the so-called Corfu process launched last year and geared towards a common position in respect of future European security. Moscow hopes that the meeting will also address Russia’s initiative on a European Security Treaty.

Special attention will be focused on issues to be included in the agenda of an OSCE summit in Astana. Kazakh President Nursultan Nazarbayev proposed to hold such a meeting in his country at the end of 2009. The majority of OSCE member states, including Russia, have supported the idea, since they have much to discuss bearing in mind that their last summit meeting was held in 1999.

A number of bilateral and multilateral talks are planned within the framework of the ministerial meeting. Thus, it is expected that foreign ministers of Azerbaijan and Armenia will hold talks involving their counterparts from the Minsk Group co-chairs (Russia, France, and the United States), and the current OCSE chairman to discuss Karabakh settlement problems.

VOR: US resumes poultry export to Russiahttp://english.ruvr.ru/2010/07/16/12497445.html

Jul 16, 2010 11:49 Moscow Time

Moscow and Washington have agreed to resume US poultry meat supplies to the Russian market in September, Chief Sanitary Inspector Gennady Onishchenko told Interfax. The two parties have already exchanged official documents stipulating the US readiness to modify its poultry processing technology to continue deliveries of chlorine-free chicken meat to Russia. According to Gennady Onishchenko, supply resumption will be possible only after specialists of Rospotrebnadzor carry out inspection on the US poultry processing factories. On January 1st, 2010, Russia introduced new sanitary regulations imposing a ban on the import of chlorine-treated chickens, particularly from the United States.

Standart: Shmatko Comes to Sofia to Discuss Gas Priceshttp://paper.standartnews.com/en/article.php?d=2010-07-16&article=33632

FRIDAY, 16 July 2010

Russian Energy Minister Sergey Shmatko will pay a surprising visit to Bulgaria the Standart has learnt. Shmatko comes only a week after Russia’s Deputy PM Viktor Zubkov visited Sofia and held lengthy talks with PM Boyko Borissov, economy minister Traycho Traykov and the management of Bulgargaz. Shmatko will hold talks with his Bulgarian counterpart Traykov and a Bulgarian delegation in the coastal city of Varna. Earlier it was expected that the Russian delegation would be led by Gazprom’s deputy head Alexander Medvedev and the talks would only concern the implementation of the South Stream project. It appears, however, that Russian PM Putin has decided to send to Sofia his heavy artillery in the face of Mr. Shmatko. Thus, the talks will cover all three Bulgarian-Russian energy projects, plus the prices if the Russian natural gas supplied to Bulgaria.Bulgaria will insist that the prices of Russian natural gas be lowered by 15%.

16.07.2010

Oil and Gas Eurasia: Sofia Prepared To Discuss South Stream Details With Russiahttp://www.oilandgaseurasia.com/news/p/0/news/8045

A Russian delegation headed by Energy Minister Sergey Shmatko will sign an agreement in Bulgaria today on details in the South Stream gas pipeline project. In an interview with RBK, the director of the Institute of Energy and Finances, Vladimir Feygin said Sofia tried to the very end to adhere to common European interests and not give in to Russian interests. But, RBK reports, the Bulgarians were unable to play the popular "environmental card".an attempt to review Bulgaria's participation in south Stream began in July 2009, when the new government headed by Boyko Borisov came to power. Moscow's response was nearly immediate. Gazprom announced it had achieved a strategic agreement with Romania and Macedonia to lay the pipeline without crossing Bulgaria. Sofia was forced to change the tone of its negotiations Copyright 2010, Oil and Gas Information Agency. All rights reserved.Focus: Bulgaria, Russia to discuss new agreement guaranteeing gas supplies for Bulgaria for 10-20 years 16 July 2010 | 08:48 | FOCUS News AgencyHome / BulgariaSofia. One of the topics under discussion at Friday’s meeting on South Stream roadmap in Euxinograd will be an agreement that will guarantee the natural gas supplies for Bulgaria for 10-20 years after 2012, Bulgargaz Director Dimitar Gogov told FOCUS News Agency.“I hope there will be some progress and that we will start exploring how South Stream will be implemented in Bulgaria and, of course, we will discuss a new agreement that

will guarantee the supplies for a period of 10-20 years,” said Gogov.Currently Bulgaria has negotiated natural gas supplies by the end of 2012. Asked whether lower natural gas prices are feasible after 2012, Gogov said:“This is a matter the two sides have to find common ground on. We wish there were lower prices. I guess the other side would not find this very pleasant. But we have to find common ground.”

Focus: Bulgaria and Russia to discuss South Stream roadmap http://www.focus-fen.net/index.php?id=n225562

16 July 2010 | 07:46 | FOCUS News AgencyHome / BulgariaVarna. Bulgaria and Russia will continue discussing the roadmap for South Stream gas pipeline in Euxinograd residence close to the costal Bulgarian city of Varna on Friday, the Bulgarian Ministry of Economy, Energy and Tourism announced. The Bulgarian delegation will be headed by Economy Minister Traycho Traykov. It is comprised also of officials of the economy ministry, Bulgartransgaz, Bulgargaz and Bulgarian Energy Holding. Russian Energy Minister Sergey Shmatko is to arrive for the talks in the city of Varna. Experts with the Russian Energy Ministry and Gazprom and Gazpromexport officials will also join the negotiations. According to the preliminary program of the meeting the heads of the two delegations will hold a news briefing after the official talks.

Novinite: Bulgaria's PM to Report about Russian Talks in Parliamenthttp://www.novinite.com/view_news.php?id=118177

Domestic | July 16, 2010, Friday

Bulgaria's PM Boyko Borisov will announce Friday at the Parliament the results from the discussions with the Russian First Deputy PM Viktor Zubkov.

This comes as a result of a demand by the former Bulgarian PM and current leader of the Bulgarian Socialist Party, Sergey Stanishev, and the former Energy Minister from Stanishev's cabinet, Petar Dimitrov.

Russia's First Deputy PM Viktor Zubkov visited Bulgaria two weeks ago in order to discuss prices of natural gas in the country.

At the Parliament's meeting today, Bulgaria's Finance Minister Simeon Djankov will talk about the mid-term fiscal framework, in response to hid predecessor from the Socialist Party Plamen Oresharski.

Also, Foreign and Labor Ministers, Nikolay Mladenov and Totyu Mladenov, will report about the strategic review of the Bulgarian diplomatic missions and the late payments of child benefits respectively.

Focus: Parasite on the pipe http://www.focus-fen.net/index.php?id=n225557

16 July 2010 | 06:02 | FOCUS News AgencyHome / BulgariaSofia. Overgas gained over USD 140 million in the 1998 – 2010 period from the difference in the price it offers to Bulgargaz and the cost of gas it pays to Gazprom, the Executive Director of Bulgargaz said, as quoted by the Politika weekly. According to him, Bulgargaz was paying 6, 5 times more and the gas distributor was practically deriving huge profit out of thin air. Overgas received a major discount in order to establish a gas distribution network in Bulgaria. The result, the Politika weekly comments, is clear, as less than 2% of Bulgarian homes are supplied with gas. It should be made clear that Overgas does not have any actual competition on the Bulgarian market, as it has been in Gazprom’s good graces for years, Gazprom being a 50% shareholder in it. Overgas works for Gazprom and does not even try to hide it, the Politika concludes.

M&C: Russian foreign minister to visit former satellite Laos

http://www.monstersandcritics.com/news/europe/news/article_1571181.php/Russian-foreign-minister-to-visit-former-satellite-Laos

Jul 16, 2010, 4:47 GMT

Vientiane, Laos - Russian Foreign Minister Sergei Lavrov is to pay an official visit to communist Laos, a former Soviet satellite state, next week, state media reported Friday.

Lavrov's visit on Tuesday and Wednesday comes in response to an invitation from his Lao counterpart, Thongloun Sisoulith, the Vientiane Times reported.

The Soviet Union was the main donor nation to Laos from 1975 to 1986, but the political and economic collapse of the Soviet bloc forced Laos to initiate economic reforms in 1987 and 1988, opening the country up to foreign trade and investments, not to mention more aid from Western democracies and multilateral donors, such as the World Bank and Asian Development Bank.

Relations between Russia and Laos, which is still run by the communist party, have cooled since 'glasnost' but remain cordial.

Focustaiwan: President calls for new dimension in Taiwan-Russia ties

http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aIPL&ID=201007160016

2010/07/16 15:13:03 Taipei, July 16 (CNA) President Ma Ying-jeou called Friday for a new dimension in Taiwan-Russia ties after the recent conclusion of the economic cooperation framework agreement (ECFA) with China.

"The clinching of the ECFA has stimulated other Asian countries to enhance their relations with Taiwan, and Taiwan hopes to build wide-ranging exchanges with Russia at this historic juncture, " Ma told Vasily N. Do Brovolskiy, Russia's top representative to Taiwan, during a meeting at the Presidential Office.

Noting that it was difficult to promote Taiwan-Russia links when cross-Taiwan Strait relations were stalemated during the previous administration, Ma said that "we hope to build closer economic, educational and cultural exchanges with Russia in a new atmosphere, and they could be started by providing reciprocal visa waivers and establishing direct air links."

Ma noted that he visited Moscow in 1997, while first lady Chow Mei-ching also visited the country in June in her capacity as the honorary director of the Cloud Gate Dance Theatre.

In 2009, two-way Taiwan-Russia trade decreased to US$2.7 billion compared to the 2008 figure of US$3.6 billion as a result of the global financial crisis, which the president said was a sign that there is ample room for the two countries to boost trade and investment.

Currently, about 120 Taiwanese students are studying in Russia, while 250 Russian students are pursuing academic courses in Taiwan, which is another area in which Taiwan should make greater efforts, he added. (By S.H. Lee and Flor Wang) ENDITEM/J

RIA: Russian customs agents seize 6 tons of luxury furs at China border http://en.rian.ru/russia/20100716/159834014.html

11:29 16/07/2010

Customs agents in Russia's Far East have confiscated more than six tons of wild animal skins that a businessman was attempting to smuggle into China, a spokesman said on Friday.

The spokesman said a semi-truck crossing the border from Russia into China on Thursday had 6.7 tons of furs hidden inside rolls of paper for recycling. He said that among the furs was more than 4 tons of muskrat, as well as mink, sable, and Siberian mountain weasel.

"An investigation of the smuggled goods is currently underway to determine the types of wild animals the skins were taken from, as well as their overall number and cost," he said.

The smuggling of animal parts, especially bear paws, from Russia into China has become a common business. Bear paws are considered an exotic dish in China and thousands are estimated to be smuggled into the country from Siberia annually. Frogs, tiger bones, deer musk and genitals from the spotted deer are also smuggled across the border mostly for Chinese medicinal purposes.

VLADIVOSTOK, July 16 (RIA Novosti)

Korrespondent: Russian TV show continues devastating film about Lukashenko http://korrespondent.net/russia/1097072GOOGLE TRANSLATION

On Friday, July 16, the Russian NTV channel shows a movie about the President of Belarus Alexander Lukashenko Religious dad-2. The film will be shown at 18:30 Moscow time (17:30 on Kiev) in the CP program.

Investigation. Promo for the movie based on the phrase: "Everything you wanted to know about Belarus, but were afraid to ask." Recall the movie with sharp criticism of the president of Belarus has been shown on Russian television channel NTV on July 4. In the tape directly Lukashenko is accused in the abduction of political opponents and their relatives. In the story also says that Lukashenko has repeatedly betrayed his ally - Russia, Belarus has always helped in the difficult moments, and its leader did not pay for gas and does not recognize South Ossetia and Abkhazia.

Religious father. Russian television showed damning film about Lukashenko In response to the Belarusian Embassy in Moscow expressed the hope that the film does not reflect the official position of the Russian leadership. At the same time, the source close to the Belarusian leader accused the Russian TV channels in an attempt to discredit Alexander Lukashenko. Meanwhile Thursday, July 15 First Belarusian channel showed an exclusive interview with Georgian President Mikhail Saakashvili. The Georgian leader, in particular, said he did not understand the demands made upon him to Russia, but also noted that tensions between the two countries adversely affected by the presence in Georgia of Russian culture.

VOR: Rustem Khamitov appointed new Bashkir presidenthttp://english.ruvr.ru/2010/07/16/12471388.html

Jul 16, 2010 01:23 Moscow TimePresident Dmitry Medvedev on Thursday accepted the early resignation of Murtaza Rakhimov, the longtime leader of the central Russian Volga republic of Bashkortostan, RIA Novosti reports.

Medvedev appointed 55-year-old Rustem Khamitov, a top manager of Russian hydroelectricity company RusHydro, as acting Bashkir president until a new head of the region is approved.

Itar-Tass: Medvedev accepts resignation of Bashkortostan’s president

http://www.itar-tass.com/eng/level2.html?NewsID=15323418&PageNum=0

16.07.2010, 01.53

SOCHI, July 16 (Itar-Tass) -- Russian President Dmitry Medvedev on Thursday accepted the early resignation of Murtaza Rakhimov, the head of Russia’s republic of Bashkortostan in the Volga region.

The Russian president praised Rakhimov for his work as Bashkortostan president and awarded him with Russia’s highest decoration, the rank I Order of Merit to the Fatherland. “Under your leadership Bashkortostan developed for a long time, now it is a well-developed republic within the Russian Federation, boasting high living standards,” Medvedev said. “On behalf of the Russian state I would like to express gratitude for the enormous work you have done while being Bashkortostan’s leader.”

Rakhimov, 76, had been head of the republic since 1993. “Now, everything is OK, even despite the crisis, but back in the 1990s, the situation was very difficult,” the Russian president recalled and thanked Rakhimov for his efforts to “prevent the most unfavourable development scenarios in the republic.”

Moscow News: Medals and pensions for departing Rakhimovhttp://www.mn.ru/politics/20100716/187933906.html

Source Evgeniya Chaykovskaya at 16/07/2010

Russian President Dmitry Medvedev on Thursday accepted the early resignation of Murtaza Rakhimov, the longtime leader of the Volga republic of Bashkortistan.

Medvedev awarded Rakhimov with Russia's highest award, the Order of Merit for Service to the Fatherland, first class, RIA Novosti reported.

Medvedev praised Rakhimov for his work being elected in December 1993, saying that it turned into a "well-developed republic within the Russian Federation, with a high standard of living."

Medvedev appointed 55-year-old Rustem Khamitov, a top manager of Russian hydroelectricity company RusHydro, as acting Bashkir president until a new head of the region is approved.

Yesterday the Bashkir parliament amended laws to allow a large pension and immunity for Rakhimov.

Meanwhile, United Russia has already suggested four candidates who could to replace Rakhimov: Rudik Iskuzhin, regional parliament’s representative in the Council of the Federation, Ufa administration chief Pavel Kachkayev, Bashkiria National Bank chairman Rustem Mardanov, and the newly-appointed acting Bashkir president Rustem Khamitov.

RIA: South Ossetian, Abkhazian leaders head to Latin America http://en.rian.ru/world/20100715/159829334.html

21:35 15/07/2010

The presidents of Abkhazia and South Ossetia will pay weeklong visits to Nicaragua and Venezuela, two of the four countries that have recognized the former Georgian republics' independence.

Abkhazian Prime Minister Sergei Shamba said on Thursday that President Sergei Bagapsh will begin his first official visit to the Latin American states on Saturday in Nicaragua and will then fly to Venezuela.

Abkhazia's foreign and economy ministers, Maxim Gvindzhia and Kristina Ozgan, will accompany the president on the trip.

"This is the first friendly top-level visit. The delegation consists both of government officials and Abkhazian businessmen. A number of documents will be signed in both countries," Shamba said.

The documents to be signed include an agreement on friendship, cooperation and mutual assistance, as well as trade cooperation and trade navigation deals and a visa-free travel agreement.

"Besides this, business deals will be discussed," Shamba said. "We hope they will be signed there."

Nicaragua was the second country to recognize Abkhazia and South Ossetia as independent after the August 2008 war between Russia and Georgia. Russia recognized the two former Georgian republics shortly after the conflict, which began when Tbilisi attacked South Ossetia in an attempt to bring it back under central control.

Venezuelan President Hugo Chavez also recognized the republics in September 2009, as did the tiny Pacific island nation of Nauru in December last year.

Shamba said Bagapsh would take part in celebrations dedicated to the 31st anniversary of the Sandinista Revolution in Nicaragua, which will take place on July 19. The revolution ousted dictator Anastasio Somoza and brought Daniel Ortega to power. Ortega served as president from 1985-1990, after the revolutionary junta was dissolved, and after three electoral defeats was elected again in 2006.

South Ossetian President Eduard Kokoity is also to take part in the celebrations in Nicaragua, Shamba said.

South Ossetia's ambassador to Russia, Dmitry Medoyev, said South Ossetian Foreign Minister Murat Dzhioyev and state counselor Konstantin Kochiyev will accompany Kokoity on the visit.

In Nicaragua, the South Ossetian delegation will also hold talks with the country's authorities, during which several agreements are expected to be signed, Medoyev said.

The delegation will then fly to the Venezuelan capital, Caracas, for talks with President Hugo Chavez and other Venezuelan officials, he said. The talks are also expected to see the signing of several deals.

Both Abkhazian and South Ossetian presidents are due to leave Latin America on July 23.

MOSCOW, July 15 (RIA Novosti) 

Trend.az: Luxembourg calls on Russia to fulfill ceasefire agreement http://en.trend.az/news/politics/foreign/1721519.html

16.07.2010 10:05

Georgia, Tbilisi, July 16 / Trend N.Kirtzkhalia /

Luxembourg calls on Russia to fulfill all items of the ceasefire agreement dated Aug.12, 2008,  Luxembourg's  Foreign Minister Jean Asselborn said at the joint press conference with his Georgian Counterpart Grigol Vashadze.

The sides discussed the Georgian government's :Strategy on the occupied territories: Involvement through cooperation and action plan for its implementation".

Asselborn said EU took over responsibility for improving the situation in the region two years ago. "We will do everything to ensure that the parties made commitments were fulfilled, and Georgia's relations with the neighboring state had been settled," he said.

Vashadze said often when he needed help in the protection of territorial integrity and sovereignty of Georgia, "Luxembourg has always been close."

Asselborn also met with Parliamentary Speaker David Bakradze and Head of EU Monitoring Mission in Georgia Hansjörg Haber.

Trend.az: Russian parliament ratifies agreement with Turkmenistan http://en.trend.az/capital/macro/1721489.html

16.07.2010 10:05

Turkmenistan, Ashgabat, July 16 / Trend H.Hasanov /

The Russian parliament ratified the agreement between the Russian and Turkmen governments on the promotion and reciprocal protection of investments, the Russian Federation Council reported.

The document is meant to create favorable conditions for investment and investors of both countries, encourage the inflow of capital and development of mutually beneficial trade-economic and scientific-technical cooperation.

The contract includes such matters as promotion, tolerance and protection of investments, treatment of investment, expropriation, compensation, transfer payments, subrogation, dispute resolution, transparency.

15 July 2010, 15:30

Interfax: Hizb ut-Tahrir activist wanted by Uzbekistan caught in St. Petersburghttp://www.interfax-religion.com/?act=news&div=7474

St. Petersburg, July 15, Interfax - St. Petersburg police have detained an Uzbek man wanted for being a member of the Hizb ut-Tahrir extremist group, a police source told Interfax on Thursday.

"Rustam Zokhidov, 37, was seized on Zakharyevskaya Street in the center of St. Petersburg yesterday. The Samarkand police department put him on the wanted list for distributing socially dangerous materials and being a member of an extremist organization. Detectives say Zokhidov is an activist of Hizb ut-Tahrir," the source said.

Uzbekistan was informed about the detention, he said.

Interfax has not received official confirmation of this report.

Earthtimes: Critics slam proposed Russian law expanding secret service powers http://www.earthtimes.org/articles/news/335127,expanding-secret-service-powers.html

Posted : Fri, 16 Jul 2010 08:29:39 GMT By : dpaMoscow - An open letter to the Russian Federation Council published Friday strongly criticized a law expanding the powers of the Federal Security Service (FSB), due to go to its third and final reading in the State Duma.The law is a blow to personal rights and represents a return to the absolute power of the secret services and control of peaceful citizens, an open letter to the Federation Council - written by lawyers, civil rights activists and government opponents - said.After its final reading in the Duma on Friday the council must approve the law before it can be sent to President Dmitry Medvedev, whose signature turns it into law.

Despite some changes, the law remained a "danger" to society, the letter, addressed to the council's speaker Sergei Mironow, said.Signatories include the President of the Moscow Bar Association, Genry Reznik, the chairwoman of the Moscow Helsinki Group, Lyudmila Alexeyeva, the head of the Russian human rights organization Memorial, Oleg Orlov, as well as writers and members of the opposition.The critics say the country's leaders are trying to return to an authoritarian, Soviet-style, Big Brother state.But Medvedev has defended the law against international criticism.On an official visit to Russia on Thursday, German Chancellor Angela Merkel warned against the bill, pointing to the experience of East Germans with their Stasi secret service.But at a news conference after the talks in the Urals city of Ekaterinburg, Medvedev insisted that "every country has the right to close gaps in its own laws, and this includes anything about the intelligence services. We are going to do it."

July 16, 2010 11:40

Interfax: Militant killed in Nalchikhttp://www.interfax.com/newsinf.asp?id=177656

ROSTOV-ON-DON. July 16 (Interfax) - A militant was killed on Thursday in Nalchik, the Republic of Kabardino-Balkaria, after he provided armed resistance, a source in the North Caucasus Federal District's law enforcement services told Interfax.

"A militant, trapped on a street Nalchik at about 11 p.m. Moscow time, was killed in an exchange of fire," the source said.

The incident is under investigation.

sd mj

RIA: Explosions on the beach and near the shopping pavilions in Makhachkala

http://www.rian.ru/incidents/20100716/255337982.html

GOOGLE TRANSLATION16/07/2010 8:58 MOSCOW, July 16 - RIA Novosti. Two explosive device was detonated on Thursday at the city beach and in shopping pavilions in Makhachkala, there were no injuries, according to RIA Novosti on Friday by calling a law enforcement source in Dagestan. "At 15.00 in the Kirov District of Makhachkala in the town, near the restaurant Upalinna,

an explosion occurred bezobolochnogo improvised device. 15.40 near shopping pavilions unknown detonated a similar device. As a result, no one was injured," - said. On suspicion of committing bombings arrested unemployed resident of Makhachkala, born in 1983, the source added.

Itar-Tass: 2 militants wanted for terrorism killed in special operation in Dagestan

http://www.itar-tass.com/eng/level2.html?NewsID=15323348&PageNum=0

16.07.2010, 01.17

MAKHACHKALA, July 16 (Itar-Tass) -- Two militants who were on the federal wanted lists over terrorism-related crimes have been killed in a special operation in the town of Khsavyurt in Russia’s Caucasian republic of Dagestan, a spokesman for the Federal Security Service’s administration in the republic told Itar-Tass on Thursday.

The two militants, Anzor Gadzhiev, born 1983, and Marid Tatayev, born 1986, were besieged in a private house in Khasavyurt. They had two Kalashnikov submachine guns, three Shmel flame-throwers, two handguns, several grenades, a great number of cartridges, pieces of explosive devices, and explosives, the spokesman said.

According to the spokesman, Gadzhiyev and Tatayev were brought to trial in Khasavyurt for assaulting a police officer in December 2008, but the trial jury acquitted them in October 2009.

Two police officers were slightly wounded in the special operation. Investigators are working at the scene. The special operation regime imposed early on Thursday has not yet been lifted.

VOR: Christian priest killed in Makhachkalahttp://english.ruvr.ru/2010/07/15/12468840.html

Jul 15, 2010 21:30 Moscow Time

A Christian priest of the Hosanna Church in Dagestan Artur Suleymanov was killed in Makhachkala, the local police reported on Thursday.

The 49-year old was shot dead near his house.

An investigation is under way.  

MNN: Believers mourn the loss of a leader in Dagestanhttp://www.mnnonline.org/article/14484

Dagestan (NCN) ― Sources from the North Caucasus Network confirmed reports Thursday that the senior pastor of an evangelical church in central Dagestan, Russia was ambushed and shot in the head by unknown gunmen as he departed the church's House of Prayer around 6:30PM local time. The senior pastor died while in the hospital about an hour later. No other people were hurt. NCN invites the global church to pray for this fellowship and their partners. The church has been targeted with harassment tactics from a vocal and often violent minority of people in Dagestan who harbor unfounded fear of Christian ministries present in the region. Church members and church leadership routinely suffer intimidation tactics from various groups, with competing agendas. Dagestan, 98% Muslim, is situated on the Caspian Sea in the North Caucasus region. Dagestan remains one of the economically poorest republics of Russia, despite the ethnic and historical richness of the 32 ethnic nationalities. Dagestan continues to suffer under the competing factions of a complex global jihadi movement. Collaborative efforts of the global Church have a long-standing history of blessing families in Dagestan.

Pravda: Dubai has officially confirmed the death of Yamadayev

http://www.pravda.ru/news/accidents/16-07-2010/1041005-yamadaev-0/GOOGLE TRANSLATION

16.07.2010 | Source: CNN Dubai authorities have officially confirmed the death of ex-commander of the Chechen battalion "Vostok", the Hero of Russia Sulima Yamadaev. Earlier, the Russian side demands remained unanswered. From the police report of UAE and the outcome of proceedings in criminal court that Sulim Yamadayev was gunned down March 28, 2009 in Dubai in a parking lot residential complex Jumeirah Beach Residence, where he lived for several months with his family. Bury the dead in the local cemetery. Recall that the brother Isa Yamadayev confirmed that Sulim was severely injured but survived.

AFP: Chechens charged in France over Moscow blastshttp://www.calgaryherald.com/Chechens+charged+France+over+Moscow+blasts/3284947/story.html

 Agence France-Presse July 15, 2010 10:00 PM

Three Chechens suspected of links to a person involved in the Moscow twin suicide bombings that killed 40 people in March have been arrested and charged in France, a judicial source said.

The three, whose identities and ages were not released, were arrested last week near the western city of Mans as part of a broad investigation.

They are suspected of ties to a man arrested in Russia for links to terrorist activities, the source said, adding that the probe was launched following a request from Russian authorities.

© Copyright (c) The Calgary Herald

Russia Today: France detains three Chechens suspected of terrorist links http://rt.com/Top_News/2010-07-16/chechens-france-terrorism-links.html/print

16 July, 2010, 11:24

French police have arrested three ethnic Chechens, and charged them with having links with a terrorist network. Russian officials say they belong to the group of infamous terrorist leader Doku Umarov.

It's been reported that those under arrest had firearms, explosives and a map of Moscow with marked locations of possible attacks.

Umarov is one of the most wanted of Russia's North Caucasus militant leaders.

He claimed responsibility for organizing the attacks on the Moscow metro system in March.

He's also suspected of many other attacks and bombings across the country.

In June, Washington also put him on a wanted list of international terrorists.

Jamestown: Kremlin Offers Money and Financial Incentives to Change the Mood in the North Caucasushttp://georgiandaily.com/index.php?option=com_content&task=view&id=19339&Itemid=132

July 16, 2010

Mairbek Vatchagaev 

Russia seems to be poised to invest big money in the North Caucasus in an effort to reduce the intensity of rebel activities there. But the target group of Russia’s new policy is not primarily the militants engaged in armed resistance against Russian rule, but rather those who have been contemplating the possibility of living outside Russia.

That means in practice that Moscow has agreed to provide unlimited financial resources to the local leaders, hoping that they will be able to strengthen the population’s loyalty to Russia. Moscow’s problem, however, is that while this approach might have yielded some desired result if it had been put in place right after the collapse of the Soviet Union, it would be impossible to talk, without some sort of irony, about the potential outcome of such a program years after Russia’s two military campaigns in Chechnya and after a war that has spread across the entire North Caucasus region.

Russian Prime Minister, Vladimir Putin’s plan to create 400,000 jobs for North Caucasus residents over the next ten years is reminiscent of the Soviet period, when the Communist Party used to draft five-year economic development plans (www.news.km.ru, July 6). It is even more surprising that no one has asked what the local population increase might be in the same ten-year period. The initiative of the Russian government thus brings to mind the old Middle Eastern wisdom, which says that by the time something is anticipated to happen, either the shah or the jackass will have died, meaning that in ten years hardly anyone will remember today’s pledges by the Russian government. Moscow’s scheme to create a resort zone across the North Caucasus by building a new resort infrastructure (www.regnum.ru, July 6) has little chance of coming to fruition given the present-day reality that even the existing tourist facilities remain half empty. Only those who are fond of extreme tourism would risk their lives in an environment of intense rebel activity (www.svobodanews.ru, July 8).

Overall, the past week has been replete with statements demonstrating the “success” of the central Russian government’s regional policy. One such statement has been the possibility of announcing yet another amnesty for North Caucasus rebels.

Since 1999, when Russia embarked on the second military campaign against Chechnya, there have already been three official amnesties for rebels –in 1999, 2003 and 2006. In addition to these presidential amnesties, there were amnesties bearing the names of their granters, such as the Patrushev amnesty of 2006 (after then Federal Security Service (FSB) Director, Nikolai Patrushev) that followed the official amnesty, and the Kadyrov amnesties of 2008 and 2009 (after Chechen President Ramzan Kadyrov). Given this peculiar Russian practice, the current amnesty of 2010 could be called the Khloponin amnesty, named after the Russian president’s special envoy to the North Caucasus Federal District, Aleksandr Khloponin (Gazeta, July 15). The Ingush leader, Yunus-Bek Yevkurov, has for his part frequently raised the issue of amnesty in his recent public statements. He hopes that by means of a new amnesty he will be better able to lure fighters out of the forests. Yevkurov’s work with Ingush youths has, over six months, only yielded six who chose to return to their families after spending some time with the rebels.

Meanwhile, human rights organizations working in the region who support the idea of an amnesty warn that pardoning alone will have no results if the violence against the civilian population by Russian law enforcement agencies (siloviki) is not brought to an end. A desire to escape the violence is the main reason for young people to join the rebels in the mountains. But this argument is only partially true, since violence is just one reason. The other is that a considerable number of youths are ideologically motivated to fight in the ranks of the armed resistance movement. This very ideological factor is ostensibly downplayed by many human rights groups, who usually portray the conflict in the North Caucasus as some Robin Hoods of the 21ststcentury seeking justice against the oppression from the Russian siloviki. The truth, however, lies in the disapproval of the ideas and principles of coexistence within a common Russian state with different political and religious creeds.

Ramzan Kadyrov’s announcement that “the fight against terrorism has ended” has also been in the news this past week (www.newsland.ru, July 7). It is worth remembering that the fight against terrorism officially ended with the termination of the so-called counter-terrorism operation in Chechnya on April 16, 2009 –that is, fifteen months ago. Kadyrov deserves credit for his firm adherence to the same numbers over the years. In 2006 he said that there were some 60 rebels throughout Chechnya (www.lenta.ru, July 18, 2006) and has not changed his mind on the numbers since then. He recently reported to Putin that there are just 70 rebels running around in the mountains, which means that the number of rebels has virtually not changed in four years. Officially, however, several hundred people have been killed, arrested or suspected of collaborating with the militants just over the course of the first six months of 2010. Kadyrov also claims that those rebels who are still in the mountains are willing to leave the forests with their hands raised in the air (www.rosbalt.ru, July 6). It is unclear who the audience of this populist statement is, but what is perfectly obvious is that no rebel exodus from the forests has occurred since Kadyrov’s announcement.

Moreover, the rebels, who are apparently unaware of the improvements in the region, continue to strike Russian interests. The intensity of their strikes has beyond any doubt become the highest since the establishment of the Caucasus Emirate in the fall of 2007.

Take, for example, the events that arose during the past weekend. On the night of July 11, unidentified men blew up a car parked near the Nebo amusement center in the town of Chegem in Kabardino-Balkaria. It is well known that militants often threaten the amusement facilities on the grounds of moral purity (www.regnum.ru, July 11). Early in the morning of July 11, several television communication posts were damaged as a result of an explosion and arson attacks in several areas of Kabardino-Balkaria (the towns of Tyrnauz and Terskol and the village of Sarmakovo) (www.lifenews.ru, July 11). On the same morning, a mobile communication tower was set on fire in the town of Baksan, and later an explosive device was found in the car of the chief of the criminal police in the Elbrus district and was defused.

In Dagestan, the chairman of the federal court’s local branch in the Untsukul district was found dead in his car in the capital Makhachkala on July 10. This happened shortly after

the rebels had designated all judges in Dagestan as enemies of Islam (taguts and kafirs) (www.jamaatshariat.com.ru, July 10). A day later, on July 11, a freight train carrying grain was the target of a blast that derailed 13 of its 50 cars. The movement of all freight and passenger trains was cancelled for the entire day. That same day, two police officers were reportedly injured in an explosion in the capital, Makhachkala (Gazeta, July 15).

Given the above developments, it is hard to believe that the North Caucasus will turn into a resort paradise anytime soon. The Russian government’s plans appear to be nothing more than futile promises of a happy future beneath the Kremlin stars.

Source: http://www.jamestown.org/programs/edm/

Frontpagemag: How Russia Manipulates Chechnya

http://frontpagemag.com/2010/07/16/how-russia-conquered-chechnya/

Posted By Jamie Glazov On July 16, 2010 @ 12:03 am In FrontPage | No Comments

Frontpage Interview’s guest today is Konstantin Preobrazhenskiy, a former KGB agent who became one of the KGB’s harshest critics. He is the author of seven books about the KGB and Japan. His new book is KGB/FSB’s New Trojan Horse: Americans of Russian Descent [1].

FP: Konstantin Preobrazhenskiy, welcome back to Frontpage Interview.

I would like to talk to you today about Putin’s war on Chechnya, which we don’t really hear about much these days. Has Russia succeeded in stifling the Chechens? Fill us in on the latest developments.

Preobrazhenskiy: Thanks Jamie.

The situation in Chechnya is full of serious problems, but it is better than during the Chechen war in 1994, which the Russian authorities were not really ready to face at that time. The Northern Caucasus had been the terra incognita for the Kremlin leaders before the war. It may be explained by the fact that the local elite was not included into the higher hierarchies of the Soviet leadership, as was the situation with the Georgian, Armenian and Azerbaijani functionaries. The Kremlin leaders were very well aware of the situation in these three republics, as they themselves would pay regular visits to these republics, spending their summer vacations there and mingling with the higher echelon officials in informal gatherings. Yet the Northern Caucasus was living an isolated life while being governed by the provincial leaders from the local ethnic groups.  The Kremlin bureaucrats hardly ever visited them, as the area was considered the “back seat” of the Caucasus.

It stands to reason why the Kremlin was so much surprised with the staunchness of the Chechen rebels.  Some time had to pass before the Russians discovered the vulnerability of the Chechens: their subdivisions into clans. Other republics of the Northern Caucasus follow the same social pattern.

The FSB has now figured out that it only has to stir up the inter-clan rivalries in order to lessen the Chechen threat. This was a totally new understanding for Russia, as the Communist leaders were trying to tolerate the clan differences as atavism of the feudal epoch. Officially, the existence of the clans in the Caucasus and central Asia was totally ignored. Unofficially, it was taken into consideration by those who were allowed to speak about the clans: the Central Committee of the Communist Party and the KGB. But they simply were mostly concentrated on the belonging of this or that local leader to this or that clan and they tried to not allow people of the same clan to be concentrated too much in the local governments. In fact, their tactics were passive because clans were not acknowledged by Communist ideology.

FP: And the current Russian rulers are much more sophisticated, right?

Preobrazhenskiy: Yes absolutely. They are not restricted by ideology and nothing prevents them from stirring up and utilizing the inter-clan conflicts.

This is something that the Soviet authorities had never done before.  They had been governing the Northern Caucasus by methods rooted in the Communist ideology, aiming at the softening the ethnic distinctions and at creating “the new Soviet person.” The existence of the clans was altogether ignored. By manipulating the clans, the Kremlin only deepened the rift of distinctions. One clan was intentionally substituted by another in “favors” in order to plant hatred between them. For instance, during both Chechen wars, the Yamadayev clan was collaborating with the Russian troops a lot. In 2000, this clan began fighting on the Russian side after yielding the city of Gudermes to the Russian troops without any resistance.

Similar tactics were utilized in Ingushetia.  Ingushetia’s President Marat Zyazikov had been very loyal to Moscow and was disliked by his own people.  In November 2008, the Kremlin appointed a new President, Yunus-Bek Yevkurov, who belonged to another family clan

FP: And what has Putin been doing?

Preobrazhenskiy: Putin has tolerated Chechnya by doing the thing which even the Russian tsars could not do: installing his own “Prince” there. The thing is that the Russian Empire colonized the Caucasus by bribing their princes and introducing them into the highest circles of the Russian aristocracy.  This method was very effective: the new members of the Russian nobility were becoming the flagmen of Russian interests in the Caucasus and, inevitably, sincere Russian patriots. They were granted all rights and privileges of Russian nobility.

In 1917, Khan of Nakhichevan, an Azerbaijani national and a Russian General, was the only Russian General to protest against the dethroning of the Tsar Nicolas II, even though all other “true” Russian Generals betrayed their Tsar.  General Khan of Nakhichevan refused to take the oath before the new government and was shot. As for Chechnya, its society was free. They did not have any princes. There was nobody to bribe, as everybody was equal. This factor contributed to Russians taking much bloodier methods in order to conquer Chechnya.

But what seemed impossible for the Imperial Russia became reality in current Russia: President Putin has corrected this historic blunder by placing a “Prince” in Chechnya. This “Prince” is none other than President Kadyrov. Unlike the real Prince, however, the latter has not been so much restricted by laws.  He has a free hand in anything he wants on one condition only: he must be loyal to the Russian government.  In fact, he can be compared to a Russian medieval vassal.

The Kadyrov’s clan is governing Chechnya now. They have supporters there.

FP: We can all remember very well a sincere all-national patriotic burst of the Chechens to get their national liberation in the early 1990s. Can this all-national burst be repeated now?

Preobrazhenskiy: I think, not. The Kremlin put the Chechen Republic under its most strict control.

FP: So how serious is the Caucasus problem then? It can’t really exist independently anyway, can it? It doesn’t have an economy after all.

Preobrazhenskiy: Well Jamie, the Northern Caucasus is an ill-coordinated, multi-ethnic and multi-religious region. Its religions are not only Islam with it various fractions, but also Christianity and paganism. Its republics of Dagestan, Ingushetia, Chechnya and Northern Ossetia are claiming each other’s territories.

Throughout history, not all people of the Northern Caucasus were forced to merge with the Russian Empire in the 19th century.  Some of them did it voluntarily: the Kabardins, Ossetians, and, partially, Dagestanians.  The Ossetians are by and large pro-Russian now.  They are grateful to Russia for placing Southern Ossetia under Russian political control, the fact that was viewed as the restoration of “The Great Ossetia”.  The Ossetians are about to become the promoters of Russian interests in the Caucasus.

The economy of Northern Caucasus is not so much developed. It depends on subsidies from Moscow, making 70-90 per cent of budget of some republics.  If they become independent, who will feed them? America? Turkey?

But Chechnya is an exception. It has oilfields. It may exist independently. But Russia will never allow it.  Especially nowadays, when the Kremlin has proclaimed the course of

restoration of the Soviet Union, while the first Chechen war of 1994 began on the wave of enthusiasm caused by the dissolution of the USSR.

The Kremlin has put its plans into practice. Recently, the Ukraine returned under its control, probably Kirgizstan is next, and sooner or later it will be Georgia’s turn.

FP: Tell us about Georgia.

Preobrazhenskiy: Georgia is a delicate region where interests of America and Russia come into conflict. Chechnya and Georgia have a common border. So the Kremlin will pay more attention to this border. It is very significant and symbolic that during the Georgian war of August 2008, two Chechen battalions “East” and “West” were fighting on the Russian side. Not on the Georgian one.

FP: What is the story on the Chechen terrorists?

Preobrazhenskiy: In Russia, the potential terrorists have had the ground cut from under them. It was done under Putin, who invented the method to cripple the terrorists.  In the case of acts of terror, the Russians mostly ignore the victimizing of hostages and concentrate on killing all terrorists. Of course, for the West, this tactic is not acceptable, but in Russia it is effective. It makes terrorism senseless.

The price of human life in Russia is very low. It is our national tradition which has been retained even now, in spite of the shrinking population.

The acts of terror are intended to not just murder people, but to achieve some political goals: to seed panic and to inspire people’s dissatisfaction with their government which can not defend them. Bu Russians do not even expect such protection. They know that the government will never defend them, and it is our tradition too.

The Russia government does not have any special obligation to its people. But the people have a lot of obligations to their government, and army service, aimed at defending the government.

It is only the West, where high positioned leaders are bargaining with terrorists in order to save hostages’ lives. The presidents are afraid of not being reelected.  And is it possible that in Russia somebody would say “Let us not reelect Medvedev because he could not defend us from terrorism”? No such a slogan will not get supporters. And also there is no mechanism of people influencing the presidential elections. Russians know that no matter how they vote, the Kremlin’s candidate will win the elections.

Chechens are not chauvinistic. Though sometimes they suffer in Russia some unofficial discrimination like illegal detentions and beatings in the police, they do not hate Russian people.

They understand that common Russians are not responsible for their government.  It can not be influenced by the common people.

The recent acts of terror in Moscow have not achieved a single terrorist goal. What did they want to demonstrate and to whom? Did they it stir up anti-governmental sentiments among Russians? Not at all.

FP: It is interesting that the terrorists chose the Lubyanka station where the FSB is located, yes?

Preobrazhenskiy: Yes it is interesting, but the FSB itself did not suffer, as usual. The Lubyanka is a nickname for the FSB, as Langley is the CIA. So we can see something symbolic there.

Maybe this act of terror was needed by somebody in Moscow to demonstrate something to somebody. The real governmental life in Russia is so secret that we can only guess.

FP: Konstantin Preobrazhenskiy, thank you for joining Frontpage Interview.

Itar-Tass: RF SKP and Public Chamber call to set up fed service for helping children

http://www.itar-tass.com/eng/level2.html?NewsID=15323541&PageNum=0

16.07.2010, 04.50

MOSCOW, July 16 (Itar-Tass) -- The Investigative Committee of the Russian Prosecutor General’s Office (SKP) and the Russian Public Chamber suggest the government set up a federal service for helping children, an SKP spokesman told Itar-Tass on Thursday.

According to Vladimir Markin, cooperation between SKP and the Public Chamber has made it possible to draw the attention of the general public and lawmakers to problems of children. The Russian State Duma lower parliament house has passed amendments toughening liability to those suspected in child abuse, he said adding that regrettably the problem still persists and joint efforts in this area will be continued.

The SKP has drafted recommendations to improve the work of the governmental commission on the protection of rights of the under-aged. Apart from it, the SKP and the Public Chamber have elaborated a bill on protecting crime victims.

July 15, 2010Russia Profile: Strange Bedfellows

http://www.russiaprofile.org/page.php?pageid=International&articleid=a1279219144

By Tom BalmforthRussia Profile

Although Russian Energy Companies Are Not That Interested in Business With Iran, the Government Still Signed a Russian-Iranian Roadmap on Energy That Will Anger Washington

Russia yesterday moved to mend fences with Iran by signing a range of measures on energy cooperation, which critics say undermines the West’s unilateral sanctions on the Islamic Republic. Moscow has for a long time tried to balance its economic interests in the pariah state while also remaining onside with the United States, which is pushing for tough measures. After Moscow finally sign off on watered-down UN sanctions in June, Western capitals still opted to add harsher unilateral ones, which punish companies supplying Iran with petroleum. Yesterday’s statements from Moscow, suggesting it could breach these sanctions, will anger Washington and leave it to choose between keeping up warmer relations with Russia or trying to isolate Iran.

Energy Minister Sergei Shmatko yesterday met with Iranian Oil Minister Masoud Mir-Kazemi in Moscow and signed a “roadmap” on long-term cooperation in the energy sphere. Bilateral projects on energy – particularly on oil and gas – are now on the table, and will be negotiated in the last quarter of 2010. Russian oil and gas behemoths already have number of contracts in the Islamic Republic, but they have mostly been on hold since the five-member UN Security Council finally agreed in June to impose sanctions to deter Iran from its nuclear arms ambitions.

In comments that are likely to anger Washington, Shmatko yesterday told journalists that: “If there is commercial interest and there are attractive terms, Russian companies are ready to supply oil products to Iran.” Iran is a major exporter of crude oil, but it remains reliant on refined oil imports because of its inferior refineries. Reveling in Russia’s show of solidarity, which flies in the face of the West’s more recent sanctions, Mir-Kazemi noted: “Truly independent countries do cooperate with Iran,” Russia Today reported.

On July 1 the United States had bolstered the watered-down UN sanctions negotiated in June with unilaterally imposed sanctions, which Australia, Canada and EU countries simultaneously adopted. These sanctions penalize foreign companies which supply refined oil to Iran. “With these sanctions, along with others, we are striking at the heart of the Iranian government’s ability to fund and develop its nuclear program,” The New York Times quoted President Barack Obama as saying. Over time, it was hoped that this stranglehold would throttle Iran’s nuclear ambitions, even though sanctions have often proven ineffective in exerting pressure in internal politics, as the example of Cuba has illustrated over the last four decades.

The Russians themselves have repeatedly expressed their doubts on the use of sanctions, but on Monday Dmitry Medvedev sent a clear message of support to Washington when he voiced unusually explicit concerns about Tehran’s designs, adding that he believed the pariah state was now close to acquiring nuclear weapons capability. “If diplomacy misses this chance, it will be a collective failure,” RIA Novosti quoted Medvedev as saying.

But from the West’s point of view, yesterday it was Russia who was thwarting the new round of “collective” sanctions, and Shmatko’s move stands to affect the U.S.-Russian rapprochement. “It has to be said, at the very least the Russian move violates the spirit of what China and Russia agreed to,” said Anatol Lieven, a professor of War Studies at Kings College London, adding that Russia’s actions don’t directly infringe the Security Council sanctions. “It’s a question of how it will be perceived in Washington. The American media and U.S. Congress are not very good at nuanced distinctions of this kind.”

The American-Russian rapprochement that has taken place under Obama and Medvedev has clocked up several victories, such as the UN sanctions on Iran and the U.S.’s dumbed-down missile defense plans for Europe. It has even weathered mishaps such as the spy debacle, and the rapid spy swap subsequently agreed evidences the success of Russia-America rapprochement.

But nonetheless, both sides have had tested the other’s patience. U.S. Secretary of State Hillary Clinton’s recent tour of Eastern Europe repeatedly and conspicuously touched on sore points in the Washington-Moscow relationship, in particular revisiting the South Ossetia and Abkhazia issue. “I don’t know whether this had any connection with what Russia has last done, but Clinton was sent off to Poland and Georgia to make a set of completely gratuitous anti-Russian remarks,” said Lieven. The Russian Foreign Ministry in particular took exception to Clinton’s use of the word “occupation” to describe Russia’s presence in the two breakaway Georgian republics, and condemned it as “baseless.”

Nonetheless, it is still unclear why Russia agreed to this “roadmap” with Iran yesterday. “I have to say I didn’t entirely understand this Russian move. If Russia was going to try and object to, or deviate from the way that the Americans were putting forward, then the time to do that was in response to the Turkish and Brazilian initiative – Russia at the time had the initiative of dealing with the Turks and the Brazilians, and was generally presenting itself on the side of the developing world,” said Lieven.   In mid-May Turkey and Brazil stepped into the fray with an alternative resolution to UN Security Council solutions, proposing that Tehran freely enrich uranium on Turkish soil for energy purposes and in return abandon its nuclear ambitions on home soil. Russia at first gave its backing to the Turkey-Brazil brokered proposal, but at the last minute threw its weight behind the Washington-championed UN sanctions. The roundabout turn may have offended Ankara and Rio de Janeiro, but it finally won the Obama administration some evidence that Russia was rewarding the United States for soft-pedaling its missile defense plans. Yesterday’s Iran decision will jeopardize this success. “On the face of it, it

looks like a case of extremely poorly coordinated Russian policy,” said Lieven. “I’m afraid it will be taken in Washington as evidence of bad faith on Russia’s part.”

But Anton Khlopkov, director of the Center for Energy and Security Studies, said that the Russian-Iranian roadmap should not be seen as a provocative gesture in Washington. “I think this set of energy-related documents with Iran was prepared well in advance: a roadmap is not something you can prepare in a few days. I think Russia just found it difficult to cancel the visit [of the Iranian minister] and the signing of this document just at the last minute, once everything had already been prepared,” said Khlopkov.

He also stressed that a roadmap is only a political plan in writing, and that in actual fact Russian businesses were not interested in investing and developing in Iran – not for governmental reasons but for strictly business reasons. “To be frank, I don’t think that Russia will start the implementation of this roadmap shortly. First of all, because this is not a problem for government – it is a problem for business, which is not ready to invest in Iran. Iran has a very different business climate to Russia.” While Russian oil giant LUKoil left Iran for political reasons connected with the sanctions, several Russian oil companies left Iran primarily because of the adverse business climate, Khlopkov said. For that reason, Russia’s roadmap should not be perceived as a practical, near-term threat to the West’s sanctions.

Nonetheless, Shmatko’s words yesterday will most likely be read in a different way in Washington. “I’m afraid that the impact on relations with America could be fairly severe,” said Lieven. 

Tucson Citizen: Russian spy Vicky Pelaez, beneficiary of 1986 amnestyhttp://tucsoncitizen.com/the-cholla-jumps/2010/07/16/russian-spy-vicky-pelaez-beneficiary-of-1986-amnesty/

by Jim Kelley on Jul.16, 2010, under Politics, crimeThursday, 7/15/10El Comercio (Lima, Peru) 7/12/10Spy for Russia was beneficiary of 1986 immigration amnesty through fraudVicky Pelaez, a Peruvian journalist just sent out of the U.S. to Russia as part of a spy swap, is reported to have two birth certificates.  For U.S. officials, her name is Vicky Pelaez, she’s 55 years old, and her father is Santiago Pelaez, who in reality ought to be her uncle.  However, for Peruvian officials, her name is Virginia Pelaez, she’s 58 years old and her father is Horacio Pelaez. Further, she didn’t ask for political asylum in the U.S. but instead took advantage of the “great migratory amnesty” of 1986, which worked in favor of millions of illegal aliens in the United States.However, to be part of this amnesty, immigrants had to demonstrate that they had arrived in the U.S. prior to January 1, 1982, and that they had resided there continuously. Pelaez obtained this benefit by claiming that she had resided in New York since 1981 although she had been a reporter for “Frecuencia Latina” during 1983 and 1984, and for this reason

had decided to present a different birth certificate.  (“Frecuencia Latina” is a Peruvian TV network.)When Pelaez applied for United States citizenship in 1997, she presented a marriage certificate in which she claimed to have married Anatonoljevich Vasenkov (Juan Lazaro) in 1993. The truth is that she was married ten years before the date that she claimed to U.S. officials, according to records in the city of Barranco (a suburb of Lima.)http://elcomercio.pe/noticia/509187/vicky-pelaez-uso-documentos-falsos-obtener-residencia-estadounidense[Editorial remark: This case serves to illustrate the fact that mass amnesty for millions of illegal aliens does not, and cannot, really establish when or where such people entered the United States, their background, or even their true identity.  Fraudulent foreign documentation is easily obtained, including that relating to past criminal activity. Our leaders can proceed down that path only at the nation’s peril.]

Washington Post: In from the cold? U.S.-Russian relations

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/15/AR2010071505032.html?hpid=opinionsbox1

By David IgnatiusFriday, July 16, 2010

This month we've had a reminder of the Cold War espionage legacy that still hangs over the U.S.-Russian relationship like a murky gray cloak. But in a strange coincidence we've also seen some dramatic evidence of the strategic "reset" in Russian-American relations -- from implacable enmity to at least occasional partnership. Which path is real, at a time when the nations talk of working together even as their spies continue scavenging for secrets?

Let's look first at the spy swap that followed the arrest of a dozen Russian "illegals" here. There wasn't much fanfare paid to the four Russians who slinked out of Moscow in this trade: All eyes, I guess, were on the comely espionnette, Anna Chapman. But I'm told that two of these Russians were among the most important "moles" the CIA ever placed inside the Russian intelligence service.

U.S. officials said the two, Alexander Zaporozhsky and Gennady Vasilenko, provided the crucial first identification of Russia's superspies inside the heart of U.S. intelligence -- the CIA's Aldrich Ames and the FBI's Robert Hanssen. Public accounts of how Ames and Hanssen were caught, which appeared in their indictments and are featured on the FBI's Web site, were partly cover stories.

The official versions emphasize aggressive FBI legwork in interrogating Hanssen and monitoring his dead drops, and what the FBI site describes as the bureau's "intensive physical and electronic surveillance of Ames during a 10-month investigation." This gumshoe work was certainly necessary in building legal cases against Ames and Hanssen that could be taken to court.

But the real breakthroughs came from dangerous undercover operations inside Moscow Center by Zaporozhsky and Vasilenko. I was told by several sources that they managed to get access to the most sensitive files on Ames and Hanssen, perhaps the KGB's most closely guarded secrets. I was told, for example, that one of the CIA's agents was able to identify Hanssen's fingerprints on correspondence he had sent to his KGB handlers. That's how the CIA nailed him.

I first heard a hint of this operation several years ago, but the information was strictly off the record. I asked U.S. officials this week whether the embargo could be lifted now that the CIA's moles were safely out of Moscow and in America. They said yes.

The Russians already know the details: They arrested Zaporozhsky, a former KGB colonel, in 2001 after luring him back to Moscow from the United States, where he had retired. Vasilenko, a former KGB major, was arrested briefly in 1988 and then again in 2005, when he was sentenced to prison.

That's the old spy vs. spy framework for the U.S.-Russian relationship, the gritty narrative that launched a thousand spy novels.

The new face (and you have to decide whether it's sincere) came in a speech Monday in Moscow by President Dmitry Medvedev to a conference of Russian ambassadors. It amounts to a comprehensive Kremlin endorsement of the reset that the Obama administration has been trying to achieve with Moscow.

Medvedev specifically named the United States as an example of "special modernization alliances with our main international partners." He talked about cooperation on political and financial reform, technology, organized crime and counterterrorism. He said that after visiting high-tech sites in America that he saw "a very positive agenda" and "future potential for our collaboration."

Perhaps most important, Medvedev slammed Iran in unusually frank language: "It is obvious that Iran is coming close to the possession of potential that could in principle be used to create nuclear weapons." He said pointedly: "The Iranian side itself is behaving in far from the best way."

The Obama administration rightly stresses that Medvedev's language of accommodation isn't an accident but the product of careful, consistent diplomacy. President Obama has met the Russian president eight times and spoken to him by telephone nine times. Obama's consistent message has been that he wants a new partnership. To get it, he has been willing to partly accommodate Moscow's views on a a missile defense system that Russia regards as a threat.

The choice for Russia and America now is how to use this fledgling partnership. If Obama is bold, he will help Russia become a truly modern nation -- where journalists are no longer threatened for challenging powerful interests, where energy is no longer used as an economic weapon and where bullying neighbors is a thing of the past.

This kind of genuine alliance would be horrible for spy novelists -- who would read a buddy novel about cooperative Russian and American agents? But it would be good for both countries and the world.

davidignatius@washpost.com

RIA: Russia's Mission Control Center says ISS orbit to be raised by over 3 km http://en.rian.ru/russia/20100716/159831344.html

03:03 16/07/2010

Russia's Mission Control on Friday will readjust the orbit of the International Space Station (ISS) by raising it by 3.7 kilometers (2.3 miles), a Mission Control spokesman said.

The readjustment is necessary to ensure the best conditions for the docking of Russia's next Progress manned spacecraft and return of a Soyuz ship.

It will be carried out with the help of thrusters of the Progress M-06M cargo ship, which is currently docked with the station's Zvezda module.

Corrections to the space station's orbit are conducted periodically before launches of Russian cargo ships and U.S. shuttles to compensate for Earth's gravity and to safeguard successful dockings.

MOSCOW, July 16 (RIA Novosti)

VOR: 400 launches of Proton carrierhttp://english.ruvr.ru/2010/07/16/12484106.html

Jul 16, 2010 10:10 Moscow TimeFollowing its first launch 45 years ago, Russia’s Proton carrier has successfully put 400 domestic and foreign spacecrafts into orbit, according to the Khrunichev State Research and Production Space Center Scientists confirm the high safety and the efficiency of Proton rockets, which is soon expected to be replaced by the new-generation Angara carriers running on environment-friendly fuel.

Russia Today: RT explores the relics of the Soviet push for atomic supremacyhttp://rt.com/Top_News/2010-07-16/relics-soviet-atomic-supremacy.html/print

16 July, 2010, 08:00

Sixty years after the beginning of the nuclear era a place, hidden among the bamboo trees, still has holds many secrets. The story of Germans behind the Soviet Union’s very own Manhattan Project is just one of them.

It was an event that would mark the beginning of the atomic age. 65-years ago a test, code-named Trinity, would see the US win the race to produce a nuclear weapon.

America spent the modern-day equivalent of more than $20 billion on the project, in a bid to beat off international rivals.

It was the culmination of the Manhattan Project. The first American nuclear explosive device, nicknamed “The Gadget,” went off in New Mexico just weeks before devastating the Japanese city of Hiroshima.

Many, including the godfather of the Atomic Bomb, J. Robert Oppenheimer, were terrified by the power of the deadly mushroom cloud.

“We knew the world would not be the same. A few people laughed, a few people cried, most people were silent,” Oppenheimer has famously said.

The echo of that blast carried far beyond the Atlantic.

In the Soviet Union, experiments with nuclear energy were underway, too. But just like the US, in a research institute on the Black Sea coast the main roles were played by German scientists.

There used to be a top-secret nuclear facility, and aside from these lions, the entrance was guarded by Soviet soldiers. The lab was hidden deep in Abkhazia’s subtropical paradise.

Some 300 Germans – top nuclear physicists, their assistants, family members and even personal chefs-- were brought to this closed compound in Abkhazia by the order of Joseph Stalin in 1945.

The Nazis were famous for their highly developed nuclear research programs, so after World War II most German physics and chemistry professors had almost no other option but to work for either Moscow or Washington. A fierce competition between the USSR and America to develop nuclear weapons was on. And even though the US was the first to successfully carry out a nuclear test, their rivals caught up pretty quickly.

“The Germans here thoroughly analyzed the US media reports about the blasts, and even from that they were able to say what had to be done next,” Yury Matveev from the Sukhum Physics and Technology Research Institute says.

Aleksander Chachakov is a veteran of the Sukhumi research institute. He says many people here remember the time the Germans successfully accomplished their mission, and were let go by Soviet authorities in the 1950s. He’s showing us the 4,000-book library with rare physics digests in German, the office where the head professor used to work, and the equipment he left for Russian scientists.

“This machine is called the spectrograph. It’s a high-definition device, a very precise one. Even when the Germans left, our scientists used to get great results with this equipment,” Chachakov explains.

But the rest of the building where German physicists used to work on the Soviet A-bomb are totally deserted, all lines are disconnected, and nowadays people rarely visit these dark hallways.

AFP: Putin meets 'Russian Obama' on regional trip: reportshttp://www.hindustantimes.com/Putin-meets-Russian-Obama-on-regional-trip-reports/Article1-573146.aspx

Agence France-PresseMoscow, July 16, 2010First Published: 12:19 IST(16/7/2010)Last Updated: 12:25 IST(16/7/2010)

Prime Minister Vladimir Putin has for the first time met an African immigrant dubbed the "Russian Obama" after he won national fame by standing last year for elected office, reports said on Friday. Putin met Joaquim Crima at a construction site for new accommodations for servicemen in southern Russia on Thursday and then later even summoned him to a full scale government meeting with regional officials, newspapers said.

Crima, an immigrant from Guinea-Bissau who has lived in Russia since 1989, last October become the first black man to bid for a seat on a local assembly in Russia. In the end, he came only third in his district in the Volgograd region of southern Russia but his mere candidacy was hailed as significant in a country where non-whites can still endure racist abuse.

Undeterred by his ballot box setback, Crima joined the ruling United Russia party and worked on a project to restore a local road which he wants to name after Putin. At the government meeting Putin asked Crima known locally by the Russian first name and

patronymic Vasily Ivanovich whether it was better to work "in Africa or the Volgograd region".

Crima started by thanking Putin for the "great honour that you have shown me" and then impressed the prime minister further with his reply, according to a transcript published on the government website.

"I think it is not a question of whether it is better to work in Africa or Russia. It depends on the person. If a person really wants to live better, he must always strive towards something," Krima said.

"Bravo!" replied a pleased Putin, who at the meeting had shown himself to be less than happy with the performance of some officials in the region.

"What Vasily Ivanovich has said is correct. If we want to live better then we need to work better and this is the whole point. And to work better you need to understand what is happening."

Crima was sent to the Soviet Union to study by his parents and finished his studies at Volgograd University in 1995. He married a local woman of Armenian origin, made his living selling watermelons and took Russian citizenship.

RIA: Abramovich to settle Hiddink's pay as Russia coach - paper http://en.rian.ru/sports/20100716/159833998.html

Dutch football trainer Guus Hiddink will get 95 million rubles ($3.1 million) from Roman Abramovich's National Football Academy for his 2010 work with the Russian national team, a Russian daily reported on Friday.

Hiddink's contract expired after the World Cup, but Russia's playoff defeat by Slovenia in November 2009 meant it failed to qualify for the tournament in South Africa and the trainer has overseen just one match since - a 1-1 draw with Hungary in March.

He had not been paid since January 1 and his agent Kees van Nyuvenheyzen had threatened to sue the Russian Football Union over the debt.

Sergei Kapkov of the National Football Academy told Kommersant newspaper that the payment would close the issue of the football union's debts to Hiddink.

"There will be no dispute with the coach," Kapkov was quoted as saying. He added that everything was laid out in an agreement with the Dutchman's attorneys.

Hiddink starts work as Turkey's head coach on August 1. His countryman Dick Advocaat, the former Zenit St. Petersburg coach, has already been appointed to lead Russia's qualifying campaign for the Euro 2012 tournament in Poland and Ukraine.

Hiddink's tenure reached its high point at Euro 2008, when the team beat the Netherlands 4-1 on the way to the semifinals, where they lost to eventual champions Spain.

He has good relations with Abramovich and took temporary charge of the Russian billionaire's Chelsea team after Brazilian Luis Felipe Scolari was sacked in February 2009. The National Football Academy had been paying Hiddink's salary but called a halt at the start of the year.

MOSCOW, July 16 (RIA Novosti)

National Economic Trends

RIA: Russia's summer heat wave threatens higher inflation - paper http://en.rian.ru/russia/20100716/159833624.html

10:48 16/07/2010

The abnormal heat that has smothered Russia since mid-June has already killed a fifth of Russia's crops and higher grain prices threaten to push inflation up later in the year, the Vedomosti daily said on Friday.

Meteorologists say the 2010 summer is one of the three hottest on record. Forecasters predicted record temperatures of 36 degrees Celsius (97 degrees Fahrenheit) for Friday with no relief in sight.

Grain prices may double in comparison with 2009, Pavel Skurikhin, the head of National Union of grain Producers of Russia, told the paper.

A state of emergency has already been introduced in 17 of Russia's major grain producing regions. The Agriculture Ministry has downgraded the 2010-2011 gross grain harvest forecast to 85 million tons. Russia's volume of national consumption of grain is 75-80 million tons.

Food prices will grow by 10-15% by the yearend and 2010 inflation will surpass the 2009 figure, reaching 9-10%, Oksana Osipova from the Higher School of Economics said.

"If world prices on food grow by 10%, in Russia they will grow by 15%," Vladimir Tikhomirov from the Uralsib financial corporation added.

MOSCOW, July 16 (RIA Novosti)

July 16, 2010 10:22

Interfax: CORRECTED: Russian monetary base up 78.7 bln rubles to 5075.3 bln rubleshttp://www.interfax.com/newsinf.asp?id=177630

(headline is adjusted)

MOSCOW. July 16 (Interfax) - The narrow monetary base in Russia stood at 5075.3 bln rubles on July12 up from 4996.6 bln rubles on July 5, the Central Bank reported on Friday.

The narrow monetary base includes cash in circulation (including cash held at credit institutions), and balances on banks' mandatory local-currency-deposit reserve accounts with the Central Bank.

VTB Capital: State Duma to consider new FX and RUB borrowing thresholds today

http://www.businessneweurope.eu/dispatch_text12160

VTB Capital, RussiaJuly 16, 2010

- -- top-tiers unlikely to be affected while others might see costs rising --- we do not expect further capital controls to be introduced

News: According to Interfax, the State Duma might today consider amendments introducing a threshold for the rates on FX borrowing that can be deducted from the tax base for the period from 1 January 2011 to 31 December 2012. For FX borrowing, the CBR's refinancing rate multiplied by a 0.8 coefficient will be used while a refinancing rate multiplied by 1.8 (to be applicable already in 2010) will be applied for RUB.

Our View: Given the current 7.75% benchmark rate, the new thresholds would be set at 6.2% and 13.95% for FX and RUB borrowing. The current alternative method sets a threshold of 15% for FX borrowing and the refinancing rate multiplied by 1.1 for RUB borrowing (the regular method implies the use of comparative loans). We think the amendments are an attempt by the authorities to impose soft capital control measures in order to limit 'hot' money inflows and convince companies to borrow locally.

In our view, the initiatives are unlikely to affect Russian top-tiers that already borrow at rates very close to or below the threshold. However, second-tier borrowers could be

negatively affected. In our view, the new measures would hike costs for such borrowers, given that the average RUB rate to non-financial organisations stood at 11.3% in May.

Even if the amendments were to be approved, we believe that the authorities will go no further and will not introduce further restrictions on capital account movements.

Back to top Aleksandra Evtifyeva

RenCap: Industrial production in Russia: Steady growth pauses in June

http://www.businessneweurope.eu/dispatch_text12160

Renaissance Capital, RussiaFriday, July 16, 2010

Yesterday (15 July), Rosstat published industrial production for June. Manufacturing surged only by 14.0% YoY in June vs 18.7% YoY the previous month. The released data is rather disappointing, as it is below market expectations (Bloomberg consensus was 11.7% YoY). According to the data, industrial output fell 0.4% MoM.

The disappointing production figures correspond to the seasonally adjusted 0.4% MoM fall of industrial output. As the effect of a low base was less evident in June, on a YoY basis, industrial output slowed across all of sectors. Extraction growth slowed to 4.4% YoY in June after posting 5.4% YoY in May. Electricity generation slowed to 2.3% YoY vs 4.1% YoY in May.

Manufacturing surged only 14.0% YoY in June vs 18.7% YoY in May, although activity in the sector continued to pick up. Automotive production continued to trend up and the output of cars was up 11.3% MoM and buses 32.4% MoM. The output of cars is being supported by strong consumer demand on the back of rising consumer confidence and wider availability of consumer lending.

The natural resource extraction sector made the largest contribution to the decline of PPI in June. Oil output fell 3.4% MoM. Gas production was cut 14.1% MoM due to the seasonal effects of summer. After the Raspadskaya coal mine accident and the inability of other producers to fill the resulting gap in output, extraction of coal fell 4.2% MoM in June.

These effects are likely either seasonal or one-off in nature, in our view. Therefore, adjusted for these effects, industrial production seems to have stalled in June. Other indicators also suggest, in the current environment, confidence is fragile in the production sector (manufacturing PMI showed a decline in employment) due to worsening global market sentiment. However, we view domestic demand (there was steady rise in retail

sales in both food and non-food segments in June) and the upcoming acceleration in government purchases as the main drivers of real sector performance in 2H10.

RenCap: Producer prices fall in June

http://www.businessneweurope.eu/dispatch_text12160

Renaissance Capital, RussiaFriday, July 16, 2010

Yesterday (15 July), Rosstat published producer price statistics for June. The Producer Price Index (PPI) declined 3.1% MoM. The drop in PPI is largely explained by the deterioration of conditions on the domestic commodities market.

Generally, output prices in the domestic oil and gas sector lag price dynamics on global markets. Domestic oil prices fell to $70-75/bbl (for Urals) in May-June from the $85/bbl average seen in April. PPI in the oil and gas sector fell 11% MoM, which is only 2.7% above the June 2009 level.

Prices in the natural resources extraction segment, apart from oil and gas, rose 2.4% MoM on average, increasing 39.3% YoY. The iron ore sector raised its prices 5.2% MoM in June. Coal prices were also up due to the shortage of coal following the accident at Raspadskaya. Price movements in other sectors were rather moderate, with changes of no more than 0.2-0.3% MoM on average. Output prices do not show any significant pressure in the consumer sector, so the translation of their dynamics into consumer inflation is limited. Consumer inflation did not show any signs of acceleration, and we think it is likely to stay near 7%.

Anton Nikitin

Prime-Tass: Statistics: Russia’s industrial output up 10.2% in January–Junehttp://www.prime-tass.com/news/show.asp?topicid=68&id=482617

MOSCOW, Jul 15 (PRIME-TASS) -- Russia’s industrial output rose 10.2% on the year in January–June, the Federal State Statistics Service said in a report obtained by PRIME-TASS Thursday.

The country’s industrial output rose 9.7% on the year and fell 0.4% on the month in June, the service also said.

In 2009, industrial output in Russia fell 10.8% on the year, the statistics service said earlier.

Below is a breakdown of industrial output in January–June by key products, as provided by the statistics service:

Product Output in January–June Change on year, %Oil and gas condensate 250 mln tns +2.8

Natural gas 334 bcm +21.3Coal 156 mln tns +13.4

Iron ore concentrate 46.3 mln tns +18.0Electric power 521 bln kWh +5.3Thermal power 787 mln Gcal +5.9

Primary oil refining 121 mln tns +4.7Automobile gasoline 17.3 mln tns -1.3

Diesel fuel 34.2 mln tns +4.4Cars 488,000 units +67.9

Trucks 60,100 units +51.1

End

15.07.2010 19:27

Moscow Times: Industrial Output Rises 9.7% http://www.themoscowtimes.com/business/article/industrial-output-rises-97/410483.html

16 July 2010Bloomberg

Industrial production climbed for an eighth month in June, the State Statistics Service said Thursday, signaling that manufacturing output may continue outpacing gains in consumer spending and employment.

Production at factories, mines and utilities rose an annual 9.7 percent after a 12.6 percent increase in May, the service said. Nonseasonally adjusted output fell 0.4 percent from the previous month.

Manufacturers and commodity producers have led the economy out of its steepest contraction on record. Companies including AvtoVAZ are spearheading the rebound. The automaker posted net income of 1 billion rubles ($32.7 million) in the second quarter after losing about 40 billion rubles last year as sales plunged.

Manufacturing growth jumped in June to the highest level in more than two years, according to VTB Capital. The government may raise its 4 percent forecast for economic growth this year as the outlook continues to improve, Economic Minister Elvira Nabiullina said Thursday.

“The main positive growth drivers appear to be related to a direct impact of the government’s efforts to reinvigorate the economy,” Renaissance Capital economists led by Alexei Moisseyev said in a report.

The recovery in output is continuing to outperform gains in consumer spending and employment. Growth in industrial production averaged more than 10 percent in the first five months, while retail sales averaged below 3 percent in the same period. Factories may face less pressure to boost production to rebuild inventories if domestic demand cools.

“Consumer spending is on the rise, but recovery of consumption does not look so stable,” analysts at TKB Capital said in a July 12 report.

Manufacturing rose an annual 14 percent in June, according to Thursday’s report. Electricity, gas and water output rose 2.3 percent, while mining and quarrying added 4.4 percent.

Industrial output shrank 10.8 percent in 2009 and capital investment fell 17 percent, the data show.

Business, Energy or Environmental regulations or discussions

Reuters: Russian markets -- Factors to Watch on July 16http://af.reuters.com/article/energyOilNews/idAFLDE6460BT20100716

Fri Jul 16, 2010 6:26am GMT MOSCOW July 16 (Reuters) - Here are events and news storiesthat could move Russian markets on Friday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to moscow.newsroom@reuters.com): Uralsib: The weaker than expected June Industrial Productionreport hit sentiment towards Russian stocks. The weaker dollarand stable oil price should help the rouble to extend its gainsagainst the dollar this morning.

Troika: Weakness in oil continued yesterday, precipitatingthe largest fall in the Russian equity market in two weeks. Weare opening our prices this morning from flat to up 0.5 percent.

EVENTS [RU-DIA] (All times GMT): KAZAKHSTAN- German chancellor Angela Merkel and RussianForeign Minister Sergei Lavrov to discuss current situation inKyrgyzstan during OSCI summit.

MOSCOW - Russian flagship carrier Aeroflot's (AFLT.MM) EGM. IN THE PAPERS [PRESS/RU]: Kommersant runs an interview with Christophe de Margerie,the chief executive of Total (TOTF.PA), who says the Frenchenergy giant has applied for a 20 percent to 25 percent stake inNovatek's (NOTK.MM) Yamal liquefied natural gas (LNG) project.

Vedomosti reports that Russian oil-to-telecoms conglomerateSistema (SSAq.L) has paid $20 million for a 51 percent stake inM2M Telematics, a company developing transport monitoring andnavigation products based on Russian-made satellite navigationsystem Glonass as well as GPS. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:* Ukraine postpones Eurobond issue - Fin Min [ID:nLDE66E24A]* Russia tells Iran: come clean over weapons work[ID:nLDE66E0QA]* Kremlin replaces one of last Yeltsin-era bosses[ID:nLDE66E1VC] COMPANIES/MARKETS:* Renault affirms investment in Russia's AvtoVAZ [ID:nLDE66E1IC]* Russia and Germany pledge closer economic ties [ID:nLDE66E0GT]* Russia steel cos up output despite price fall [ID:nLDE66E0P1]* Rouble hits 8-wk peak vs weak dollar [ID:nLDE66E1YM]* Russian mortgage lending to double in 2010 -PM [ID:nLDE66E1YN]* Sberbank sees stable NPL level until 2011 [ID:nLDE66E1MP]* Kamchatka Gold postpones IPO to 2011 - owner [ID:nLDE66E0AB]* EuroChem aims for No.3 spot in Russia potash [ID:nLDE66E18F]* Rosinter H1 sales boosted by growing demand [ID:nLDE66E0LO]* Veropharm Q1 net profit falls 3.4 pct [ID:nLDE66E0OL]* Georgia Railway sells $250 mln Eurobond [ID:nLDE66E0V3] ECONOMY/POLITICS:* Russia June industry output up 9.7 pct y/y [ID:nMOS007596]* Russia June PPI down 3.1 pct m/m, +9.8 pct y/y [ID:nMOS007595]* Russian gold/fx reserves rise to $467.3 bln [ID:nMOS007594]

ENERGY:* Sberbank sees 1st Russian carbon deal by Oct [ID:nLDE66C1X4]* Russia's oil export duty to rise 6 pct in Aug [ID:nLDE66E0G3]* Belarus cuts Russia oil imports,ups Venezuelan [ID:nLDE66E1TG]* Kazakhstan opens criminal case against Tengiz [ID:nLDE66E0T8] COMMODITIES:* Second Russia beet test shows root weight up [ID:nLDE66E0E0]* TABLE-Russian raw sugar refining up 25 pct y/y [ID:nLDE66E0WW] MARKETS CLOSE/LATEST: RTS 1,409.0 +0.40 pct MSCI Russia .MIRU00000PUS 751.2 -0.60 pct MSCI Emerging Markets .MSCIEF 955.4 -0.18 pct Russia 30-year EurobondRU011428878= yield: 5.081/5.042 pct EMBI+ Russia 11EMJ 253 basis points over Rouble/dollar RUBUTSTN=MCX 30.4900 Rouble/euro EURRUBTN=MCX 39.3388 NYMEX crude CLc1 $76.41 -$0.21 ICE Brent crude LCOc1 $75.86 -$0.23 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]

Bloomberg: Russia Stocks Advance on $76 Oil, Goldman Sachs U.S. Settlement

http://www.businessweek.com/news/2010-07-16/russia-stocks-advance-on-76-oil-goldman-sachs-u-s-settlement.html

July 16, 2010, 3:52 AM EDT

July 16 (Bloomberg) -- Russian stocks gained for the third time this week as oil traded at more than $76 a barrel and after Goldman Sachs Group Inc. settled with U.S. regulators.

OAO Surgutneftegas, Russia’s fourth-largest oil producer, added 1.2 percent. OAO Uralkali, the country’s second-largest potash producer, increased 1 percent, helping to push the Micex Index of 30 stocks higher by 0.6 percent to 1,347.6 as of 10:55 a.m. in Moscow trading.

Crude, Russia’s biggest export earner, traded higher at $76.49 after sliding yesterday when economic reports in the U.S. disappointed investors. Goldman Sachs agreed yesterday to pay $550 million and change its business practices to settle claims it misled investors, sending U.S. stocks up from an early slump. Concern the Goldman probe could widen was seen to be curbing appetite for riskier assets and commodities.

“Investors seem to be happy with the Goldman result,” Daniel Salter, an emerging-markets strategist at ING Groep NV in Moscow, said by phone. “But the market is going to be volatile for the next quarter with long-only money reluctant to commit to Russia given the current volatility.”

The benchmark MSCI Russia index may rise to 980 by July next year, ING said in an e-mailed note dated yesterday. “Assuming a double dip can be avoided, our base case sees oil trading at $80 a barrel” with “low global interest rates supporting valuations,” analysts led by Salter said.

The Micex has fallen 12 percent since its April 15 peak on concern economic growth may slow.

--Editors: Linda Shen, Alexander Nicholson.

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

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

Bloomberg: Rosneft, Sberbank, RusHydro, AvtoVAZ: Russian Equity Previewhttp://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/07/15/bloomberg1376-L5M4MQ0D9L3501-01KK2P5TP7DMHA41PV5U4BNEDS.DTL

July 16 (Bloomberg) -- The following companies may have unusual price changes in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

Russia's ruble-based Micex Index dropped 1.4 percent to 1,340.20.

OAO Rosneft (ROSN RX): Crude oil tumbled after government reports bolstered concern that the U.S. economic recovery will slow, reducing demand for oil. Shares fell 2.1 percent to 188.86 rubles.

OAO Sberbank (SBER03 RX): Russian banks plan to double mortgage lending this year to over 300 billion rubles ($9.84 billion) as demand recovers, Russian Prime Minister Vladimir Putin said. Russia's largest lender fell 1.7 percent to 80.75 rubles.

OAO RusHydro (HYDR RX): Rustem Khamitov, an executive at OAO RusHydro, was appointed acting president of the Bashkortostan after Russian President Dmitry Medvedev accepted the resignation of Murtaza Rakhimov, 76, from the post, the Kremlin said. The state-run hydropower utility fell 3.3 percent to 1.574 rubles.

OAO AvtoVAZ (AVAZ RX): Nissan Motor Co. and its French partner Renault SA will make 300,000 subcompacts a year at AvtoVAZ's factory in Russia starting in 2012, Nikkei English News reported, citing an interview with AvtoVAZ President Igor Komarov. The Russian carmaker added 1 percent to 13.98 rubles.

--Editor: Glenn J. Kalinoski

Bloomberg: Russia Stocks May Rally 30% in Next 12 Months, ING Groep Sayshttp://www.businessweek.com/news/2010-07-16/russia-stocks-may-rally-30-in-next-12-months-ing-groep-says.html

July 16, 2010, 2:07 AM EDT

July 16 (Bloomberg) -- Russian stocks may rally 30 percent in the next 12 months, ING Groep NV said. The benchmark MSCI Russia index may rise to 980 by July next year, ING said in an e-mailed note dated yesterday.

“Assuming a double dip can be avoided, our base case sees oil trading at $80 a barrel” with “low global interest rates supporting valuations,” it said.

To contact the editor responsible for this story: Alexander Nicholson at anicholson6@bloomberg.net

VTB Capital: Connection to electricity grid should be free of charge for developers, Putin says

http://www.businessneweurope.eu/dispatch_text12160

VTB Capital, RussiaJuly 16, 2010

- supportive for RAB adoption we believe - state spending in the sector sounds scary if allocated through equity placements

News: Prime Minister Vladimir Putin said yesterday during his visit to Volgograd that connection to the grid should be free of charge for developers, specifying that it ought to be financed through the grid company tariff.

In the other news, Minister of Energy Sergey Shmatko said yesterday that there was a need to attract long money to the electricity sector as a whole, and grids in particular. He added that government support was also needed. In particular, Shmatko mentioned that the state should allocate some RUB 100bn annually for renovating the grids, saying that it would take MRSKs 30-40 years to do so using only RAB opportunities.

Our View: Putin's statements might hint that RAB adoption from 2011 is well on track. For us, RAB is the only rational way of resolving the issue and addressing the requests of both Putin and Shmatko. If RAB is in place, the MRSKs will be able to attract long money (as desired by Shmatko) and connect as many new customers to the grid as desired.

On the other hand, we are concerned about massive state spending in the grids sector. If the latter were to be allocated to companies through equity placements, it would be negatively perceived by minority investors.

Forbesrussia: Former Armenian President and head of Sistema become its shareholders

http://www.forbesrussia.ru/node/52996

GOOGLE TRANSLATION16 July 2010 12:00 The new shareholders of Sistema became its president, Leonid Melamed, the former president of Armenia Robert Kocharian, and the founder of Sistema Shyam Teleservices (acquired by "System" in 2008), Rajiv Mehrotra. They got to 0,0009% of the company. In addition, members of the Board of Directors of the System "as a reward increased its stake in the company, according to the material published on the official website of the

System." Thus, the proportion of the founder and chairman Vladimir Yevtushenkov rose to 64.1821% from 64.1812%. The former head of Sistema Alexander Goncharuk has increased its stake to 1.89% from 1.8891%, first vice-president Ron Sommer - up to 0.0042% from 0.0033%, vice-president Sergey Cheremin - up to 0.0026% with 0.0017%, Vyacheslav Kop'ev - up to 0.0540% from 0.0531%, Dmitry Zubov - up to 0.8797% from 0.8788%, Evgeny Novitsky - up to 1.9938% to 1.9929%. As the news agency Interfax, on the basis of prices GDR «Systems" at the closure of the London Stock Exchange on Thursday, July 15 - $ 23.86 per share - total value of shares to pay, was $ 1.1 million Sistema owns and manages a diversified portfolio of investments in companies in various industries, with the most significant assets in telecommunications (MTS, Comstar UTS "), electronics (Sitronics), the media sector (SMM), as well as developing other business areas, including tourism (Intourist), retail (Detsky Mir), finance (IBRD), radio and space technology ("RTI Systems"), medical services (Medsi), Pharmaceuticals and Biotechnology (" Medical Technology Holding "MTH").

VTB Capital: Sberbank's largest private shareholder Nikolai Maksimov claims that a court has arrested part of the Sberbank shares he owns http://www.businessneweurope.eu/dispatch_text12160

VTB Capital, RussiaJuly 16, 2010

--- the value of the stake is USD 200mn, or 0.3% of total capitalisation --- no effect to other shares

News: Kommersant has this morning quoted Nikolai Maksimov as saying that a court has arrested USD 200mn worth of Sberbank shares belonging to him as part of the Maksimov/NLMK suit court case.

Our View: The arrest will have no effect on other shareholders or Sberbank shares, as it is doubtful that the stake will be sold on the market or the shares become treasury. Meanwhile, should the shares be frozen by the court, the size of the stake will have little effect on Sberbank's free float.

Back to top Dmitry Dmitriev

Bloomberg: Infineon Not in Talks With Sistema, Chief Tells Sueddeutsche http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=atXUqNhLDO94

By Angela Cullen

July 16 (Bloomberg) -- Infineon Technologies AG is not in talks with AFK Sistema about the Russian company purchasing a stake in the German semiconductor supplier, Sueddeutsche Zeitung reported, citing Infineon Chief Executive Officer Peter Bauer.

Infineon regards Asia, not Russia, as the market with the most growth potential, according to the newspaper. Bauer brushed off Sistema’s interest even as Russian President Dmitry Medvedev discussed a possible partnership in recent talks with German Chancellor Angela Merkel, Sueddeutsche said.

Bauer is optimistic the industry’s recovery will be sustained, the newspaper said. Infineon expects to benefit even more from a decline in the euro in the fourth quarter of its fiscal year, Sueddeutsche said. In the 2010-2011 fiscal year, it expects sales to increase at a high single-digit percentage rate, the newspaper said.

Last Updated: July 16, 2010 01:13 EDT

RIA: Russia's VEB may replace Russian Technologies in Boeing contract - paper http://en.rian.ru/business/20100716/159834256.html

11:49 16/07/2010

MOSCOW, July 16 (RIA Novosti) - VEB-Leasing, a subsidiary of one of Russia's largest banks, Vnesheconombank (VEB), may replace Russian State Technology Corporation Rostekhnologii in a $2.5 billion contract to lease 50 Boeing passenger planes for the country's flagship carrier Aeroflot, Kommersant business daily said on Friday.

The paper quoted a government source as saying that Rostekhnologii did not have enough time to set up its own leasing company for the contract, which was to be signed no later than November 2010.

In May, Boeing won a Rostekhnologii tender to supply it with 50 new narrow-bodied planes and an option to supply 15 more.

Kommersant said that Rostekhnologii confirmed that VEB-Leasing was participating in the project, adding that it had not dropped plans to set up a leasing company. VEB sources also confirmed the information, but there were no official comments from VEB or VEB-Leasing.

VEB-Leasing was chosen because VEB will provide a quarter of financing for the transaction, with U.S. ExImbank being the largest lender, Kommersant quoted the government source as saying.

The source also told Kommersant that during President Dmitry Medvedev's recent visit to the United States, Boeing and Rostekhnologii had signed an memorandum of mutual understanding under which Rostekhnologii accepted Boeing`s offer to supply planes. A similar document was signed between VEB and Eximbank.

Oleg Panteleyev, head of the Aviaport agency analytical department, said the government made the right step in passing the contract over to VEB.

"VEB offers very good terms of financing and its subsidiary VEB-Leasing is widening its leasing portfolio actively, and in the aviation sphere too," he said.

Yevgeny Shago, head of the Ingosstrakh investment company analytical department, explains the dropout of Rostekhnologii by political reasons.

"Foreign aircraft supplies are not the function of Rostekhnologii and it does not relate to goals of the state corporation to support and develop local industry," he said.

Reuters: Steelmakers Say They Raised Output in Q2 http://www.themoscowtimes.com/business/article/steelmakers-say-they-raised-output-in-q2/410470.html

16 July 2010Reuters

Major Russian steelmakers increased output in the second quarter of this year, in the hope that the trend of weaker prices in the last two months will turn around in the fall.

Three steel giants reported Thursday an increase in production in April to June from the previous three months.

Evraz raised steel output by 7.1 percent quarter on quarter and by 25 percent year on year to 4.3 million metric tons.

Novolipetsk Steel, or NLMK, increased output by 6 percent on the previous quarter to 2.9 million metric tons. Magnitogorsk Iron & Steel Works, or MMK, reported a 4 percent increase to 2.55 million metric tons.

"We estimate some 10 to 15 percent quarter-on-quarter decline in pricing due to the weaker market environment," said a statement from NLMK.

Viktor Rashnikov, who controls MMK, forecast that the price decline will be temporary.

"There has been a certain decline in export prices. I believe they should recover in September," Rashnikov said.

NLMK believed the price decline in May to July resulted from an increase in steel products supply, which was not accompanied by sufficient demand from traders and end-users. It said the situation might stabilize by August.

"We expect global price trends in the short- and medium-term to remain rather volatile," NLMK said in a statement.

"Price growth will be restrained by the still significant level of idle capacity in the global steel industry. At the same time, the high production costs of non-integrated steel manufacturers prompt production cuts, providing support to steel prices," it said.

Renaissance Capital analyst Boris Krasnozhenov agreed with the companies' view. He said prices would rise in the fall, supported by a decline in output by producers who lack a resource base. Russian companies, which have their own ore deposits, will maintain output volumes, he forecast.

"Our companies are the most competitive ones. Our steel production is the cheapest; only Brazil can compete with us," Krasnozhenov said.

Evraz did not comment on the market, but last month its management forecast high price volatility.

Other top Russian steel producers, Severstal and Mechel, have yet to publish their second quarter 2010 results.

Financial: EBRD and IFC raise $164 million for Russian private bank

http://finchannel.com/news_flash/Banks/67480_EBRD_and_IFC_raise_$164_million_for_Russian_private_bank/

16/07/2010 10:44 (00:23 minutes ago)

The FINANCIAL -- The EBRD and IFC, the private sector arm of the World Bank , have joined forces to raise $164 million for Russia’s Transcapitalbank, including a $104 million loan syndication, whose success confirms the return of international appetite for the debt of strong private mid-size Russian banks despite continuing market turbulence.

“EBRD and IFC provided three-year A loans of $30 million each on their own account while an additional $104 million B loans was syndicated to a consortium of 12 commercial banks. The B loan provides for a bullet repayment at the end of the first year but its maturity can be extended for a further year at the commercial banks’ discretion,” EBRD informs.

The EBRD and IFC are the lenders of record for the full amount of $164 million.

The commercial banks participating in the B loan syndication include Commerzbank AG,  FBN Bank (UK) Ltd, ING Bank N.V., RZB, Standard Chartered Bank and VTB Bank (Deutschland) AG as initial mandated lead arrangers.

Other participants are: Amsterdam Trade Bank N.V. as mandated lead arranger; AKA Ausfuhrkredit-Gesellschaft mbH as lead arranger; Banque de Commerce et de Placements SA, London Forfaiting Company Ltd and the Royal Bank of Scotland N.V. as co-arrangers and ADRIA Bank AG as manager.The pricing of the B loans is 3.25 percent over 6-month LIBOR.

The success of this transaction shows that a a well-run mid-sized Russian private bank, which has proved resistant to the financial and economic crisis, can now once again tap international financial markets for medium-term funding, and eventually, for longer-term money, said Nick Tesseyman, the EBRD’s Managing Director in charge of the Financial Institutions sector.

This successful syndication, the first for Transcapitalbank since the start of the financial crisis, will allow us to provide competitive finance to our clientele and maintain the

bank’s core lending activities,” said Olga Gryadovaya, Chairman of Transcapitalbank’s Management Board.  Transcapitalbank and its clients are positioned for growth, and this syndication provides the medium-term finance to underpin that growth, Mrs. Gryadovaya added.

“We see significant growth in commercial banks’ interest to provide financing to sustainable Russian private banks.  This syndication will send a strong signal to other investors and help re-establish the market for other Russian banks,” said Ritva Laukkanen, IFC Director for Syndications and Resource Mobilization.

These loans, arranged under the umbrella of EBRD and IFC, are aimed at facilitating Transcapitalbank’s return to international debt markets in order to maintain a diversified funding base and sustain its domestic lending programme to the real sector of the economy.

This is the second successful syndication the EBRD has arranged for a private Russian bank in the last month.

Founded in 1992, Transcapitalbank focuses on medium-sized corporates, as well as micro and small businesses, across 16 Russian regions. Its customer base consists of over 18,200 corporate clients and more than 153,000 retail ones.

The EBRD in December 2009 raised its stake in Transcapitalbank to 28.59 percent after agreeing to boost its Tier-1 capital by an extra 1.2 billion roubles. The EBRD originally acquired a stake of 25 percent plus one share in this bank in 2006.

This new transaction brings to $153.6 million the total amount of facilities provided by the EBRD to Transcapitalbank since the beginning of their relationship in 2004.

Diamonds.net: Yakutia Supports ALROSA's Proposal on Gokhran Diamond Sales http://www.diamonds.net/news/NewsItem.aspx?ArticleID=31723

By Interfax Posted: 07/15/10 04:10RAPAPORT) Interfax, YAKUTSK: Yegor Borisov, the president of the internal republic of Yakutia, where diamond company ALROSA is based, said he supports an initiative to sell the diamonds that Gokhran bought from ALROSA, a source in Yakutia's government told Interfax.

Borisov made the comment at a meeting with Deputy Prime Minister and Finance Minister Alexei Kudrin.

"ALROSA chief Fyodor Andreev said he was concerned by the rapid rise in the price of raw diamonds, and he could not rule out a repeat of the situation two years ago, when the

price of raw diamonds was higher in Yakutia. It's in both of our interests to lower prices on raw material," he said.

However, Gokhran doesn't plan to begin selling the diamonds, which it purchased from ALROSA during the global financial crisis, until 2013, the source said.

It was reported earlier that Andreev warned of a new price bubble in comments on Monday. "Due to the crisis and the reduction in global production, there is a shortage on the market that we estimate to total $0.8 billion to $1 billion and which is today a major driver of price increases," Andreev said at the World Diamond Congress.

"Prices are not far from those in 2008," Andreev said. "We once again face the issue of regulating the market. A regulated, predictable, transparent market should be the watchword today," he said.

Sale of the stocks held by Gokhran could help rein in prices, he said, adding that talks are underway with the Finance Ministry on using Gokhran's diamond inventory to hold down prices, cover the deficit and prevent bubbles from forming.

The exact amount of diamonds Gokhran holds is a secret, but it is known that ALROSA sold it diamonds worth $1.1 billion (RUB 32.5 billion) in 2009. At that time of declining demand the company had decided not to sell diamonds on the market, only to Gokhran.

Gokhran chief Vladimir Rybkin said that his agency would not begin selling the ALROSA diamonds before 2012.

"Gokhran is not an independent player on the diamond market. Our goal is to generate the budget revenue specified by the government. As for the diamonds purchased in 2008-2009, we will not sell them this year or next. It's a large amount. We never bought so much previously. It will take a long time to sort and value. They might appear on the market in 2012 or 2013," Rybkin said.

The plan for Gokhran's sale of valuables is stipulated in the budget: $438.7 million (RUB 13.4 billion) in 2010. However, it was reported earlier that amendments to the 2010 budget that would boost the amount of sales by $414.2 million (RUB 12.65 billion) has been approved by the State Duma in a first reading.

(c) 2010 Interfax News Agency , Source: The Financial Times LimitedCopyright © 2010 Acquire Media. All rights reserved.

Visor Capital: Uranium One’s Board recommends the transaction with ARMZ to shareholders http://www.businessneweurope.eu/dispatch_text12157

Visor Capital

July 16, 2010

Though we believe the news was largely anticipated by the market, we expect positive share impact for the Company, as it leaves almost no doubt that the transaction will go through.

Uranium One (UUU CN) yesterday announced that its Board of Directors has approved recommending to shareholders transaction with Russian uranium miner, ARMZ. A special meeting of shareholders will be held in Vancouver, British Columbia on 31 August 2010.

On 8 June 2010, the companies signed an agreement under which Uranium One would acquire ARMZ's 50% stake in the Akbastau Uranium Mine and its 49.67% interest in the Zarechnoye Uranium Mine, both located in southern Kazakhstan. The deal is expected to increase Uranium One's steady-state production from its Kazakhstan assets by approximately 60%. At the same time, ARMZ is to pay US$610m in cash, in exchange for 356m new shares of Uranium One, causing ARMZ’s stake in the Company to rise from its current 23% to a controlling interest of 51%. After closing the deal, Uranium One will pay a cash dividend of at least US$1.06 per share to shareholders other than ARMZ. Uranium One expects to close the deal by YE2010, after receiving all necessary approvals from the Kazakh, Canadian and US governments.

Though we believe the news was largely anticipated by the market, we expect a positive share impact for Uranium One, as it leaves almost no doubt that transaction will go through. We currently have Uranium One under formal research coverage, available to our clients.

Itar-Tass: AvtoVAZ, Renault-Nissan to make 300,000 cars a year in 2012

http://www.itar-tass.com/eng/level2.html?NewsID=15323554

16.07.2010, 05.29

TOKYO, July 16 (Itar-Tass) -- Russia’s biggest car manufacturer AvtoVAZ and the Renault-Nissan alliance will make up to 300,000 motor vehicles a year at a joint production facility in Russia’s Togliatti starting from 2012, AvtoVAZ president Igor Komarov said in an interview with Japan’s Nikkei Business Daily on Friday.

According to Komarov, overall investments in the project will amount to 400 million euros, with Renault-Nissan accounting for 300 million euros. Starting from September 2012, Nissan will produce 75,000 cars a year under its brand name in Togliatti, and Renault – 150,000 cars from March 2013. AvtoVAZ will manufacture 75,000 cars a year under the Lada brand name. The three will use a single platform.

The three companies seek to increase their presence on the Russian market up to 40 percent, Komarov said.

Reuters: Renault affirms investment in AvtoVAZ-CORRECTED-UPDATE 2http://www.forexyard.com/en/news/Renault-affirms-investment-in-AvtoVAZ-2010-07-16T063429Z-CORRECTED-UPDATE-2

AVTOVAZ-RENAULT/ (UPDATE 2, CORRECTED)

(Corrects second paragraph in item transmitted on July 15 to show Renault and Nissan together are world's fourth-largest carmaker)

* To keep stake in Russian carmaker above 25 percent until 2012

* Russian Technologies to invest 730 million euros in AvtoVAZ

* Russtech stake will increase to 36.5 percent from 25 percent

* AvtoVAZ says will need state support for 5-6 more years

By Gleb Stolyarov and John Bowker

MOSCOW, July 15 (Reuters) - France's Renault will pump 240 million euros ($305 million) into Russia's AvtoVAZ and keep its stake above 25 percent for at least two years, cementing its commitment to the volatile Russian market.

Renault, which with its alliance partner Nissan makes up the world's fourth biggest car-maker, said in a joint statement with other AvtoVAZ shareholders it had signed a restructuring agreement for the Lada manufacturer -- which nearly went bust in last year's auto industry crisis.

"Russia remains one of our priority regions, meaning Renault is interested in continuing active and long-term partnership with AvtoVAZ," Renault's Eurasia regional head Christian Esteve said in a statement.

Russian state conglomerate Russian Technologies said it would increase its stake in AvtoVAZ to 36.5 percent via the purchase of 730 million euros of new shares. Moscow investment bank Troika Dialog will retain a 25 percent stake.

AvtoVAZ shares closed up more than 1 percent, while the overall Russian market fell 1.35 percent.

STIMULATING SALES

Russia rescued AvtoVAZ with a 40 billion rouble ($1.31 billion) bailout last year and has since been working on plans to ensure the group's long-term future.

AvtoVAZ Chief Executive Igor Komarov told Reuters the company would continue to rely on state support for another five or six years, but added that the group would be cash flow positive in the current year.

Renault said the goal was to produce 900,000 vehicles a year from 2015 -- double the current target for 2010.

Russia had been tipped to overtake Germany as the Europe's biggest car market before last year's crisis halved total sales. The industry is now in the early stages of recovery -- helped by a government-sponsored scrappage scheme.

Komarov said he hoped the government would continue to run the scheme. It has already been extended once, and is now expected to last until the end of the year.

"If the government wants to develop the car industry it needs to give serious attention to stimulating sales and demand -- the state understands this very well. One of the most effective measures is car scrappage," he said in an interview. ($1=.7869 Euro) ($1=30.53 Rouble)

(Editing by Erica Billingham and Elaine Hardcastle)

Steel Guru: AvtoVaz starts posting profits in Q2

http://www.steelguru.com/russian_news/AvtoVaz_starts_posting_profits_in_Q2/155434.html

Friday, 16 Jul 2010

Interfax Mr Igor Komarov President of Avtoaz said during a meeting with Mr Vladimir Putin Russian Prime Minister that the company posted RUB 1 billion in profit from its operations in April to June 2010.

Mr Putin asked Mr Komarov said "You now have posted profit for the first time, 1 billion rubles, which is quite an amount for such a major enterprise. I understand that we have reached agreements with both you and forewing investors. And with them you have developed a comprehensive plan for joint efforts in the technical reequipping of the enterprise, development and producing new models. This is to make AvtoVaz an efficient modern enterprise, effective from an economic point of view self -sufficient and having possibilities for development. How are these plans being realized."

Mr Komarov said "We have produced positive results and increased sales primarily thanks to the utilization program. Total sales doubled in the second quarter in comparison with the first quarter. These efforts have helped produce profit and positive results for our operations."

AvtoVaz told Interfax that the company had posted RUB 1 billion in profit for the second quarter of 2010. AvtoVaz losses in 2009 according to Russian accounting standards increased to RUB 38.5 billion from RUB 6.7 billion in 2008. The company sales

revenues decline by 47% to RUB 84.2 billion in 2009.

The company posted RUB 2.58 billion in RAS net losses for the first quarter of 2010, decreasing seven times from RUB 18.75 billion in losses for the fourth quarter and RUB 6.33 billion in losses for the first quarter of 2009.

(Sourced from Interfax)

ATC Network: Era Selected for Second Russian Airporthttp://www.atc-network.com/News/34580/Era-Selected-for-Second-Russian-Airport

Posted by: Daniel Finkel     http://www.sra.comFrom: SRA International Date: 7/16/2010

Era a.s., a subsidiary of SRA International, Inc., today announced that Lianozovo Electromechanical Plant Research and Production Corporation (LEMZ) has selected Era to deploy a surface multilateration and ADS-B surveillance solution in Russia. The solution, which will be deployed at Sochi Airport, follows Era's recent selection by LEMZ for surveillance at Domodedovo International Airport in Moscow.Sochi Airport is undergoing an extensive modernization project to enhance the airport infrastructure. This is especially important as the airport expands to meet the demands of the expected increase in air traffic when the city hosts the 2014 Winter Olympic Games.

"As evident by our recent surveillance certification, along with our recent airport wins, Era is becoming the clear choice for Russia's next-generation civilian air traffic management surveillance needs," said Era Systems Corporation Senior Vice President Kevin Layton. "Our commercial-off-the-shelf multilateration system is able to meet the varied needs of LEMZ, and we see this as an important second step in a long-term and successful partnership with LEMZ."

Era's solutions will provide air traffic controllers with complete surface situational awareness in all climatic conditions and will be integrated into advanced-surface movement guidance and control systems.

Era's multilateration solution provides higher accuracy, faster update rates, better coverage and improved reliability when compared to conventional radar, at a much lower initial cost and with lower annual maintenance and support costs. Era's products are deployed in nearly 40 countries worldwide.

Era a.s. provides next-generation air traffic management solutions that address core challenges like safety, efficiency, profitability and functionality. Its innovative use of proven next-generation technologies, like multilateration and ADS-B, help air navigation service providers and airport operators ease capacity constraints; improve airspace and ground space efficiencies; and reduce costs.  

Activity in the Oil and Gas sector (including regulatory)

FT: Russian energy industry facing fresh tax blow http://www.ft.com/cms/s/0/68666fd6-9033-11df-ad26-00144feab49a.html

By Catherine Belton in Moscow

Published: July 15 2010 18:34 | Last updated: July 15 2010 18:34

Russia’s energy industry is bracing itself for a set of tax increases that could be agreed by the end of July, and warns of a possible production decline owing to rising – and unpredictable – taxes and costs.

Alexei Kudrin, the Russian finance minister, is bidding to raise extraction taxes that could yield an extra $6bn in revenues for the budget next year, in a second potential setback for the sector in recent months.

In June, the finance ministry said it was scrapping export tax holidays for crude from remote east Siberian fields and instead levying an export tariff of 45 per cent, a move that could raise $4bn. The measures are increasing uncertainty and delaying investment, say industry executives and analysts.

“We can’t proceed with investment decisions without more clarity,” says Peter O’Brien, vice-president for finance and investment at Rosneft, the state-controlled oil major.

A debate is growing between big oil and the finance ministry that could shape the country’s economic growth for years. Russia’s biggest oil companies claim potential growth in the country’s gross domestic product is being squandered amid uncertainty over taxation.

“We are ready to invest $30bn in the next 10 years,” says Jonathan Muir, chief financial officer at TNK-BP, BP’s Russian oil venture. “But this is a lot to ask when we don’t know what the tax system is going to look like.”

But the finance ministry is battling to rein in the budget deficit, which is targeted at 5 per cent or less this year, down from 5.9 per cent last year.

Mr Kudrin is anxious to reduce the pressure on the country’s oil windfall funds, which are vital for future pension payments. One of the funds, the reserve fund, is already down to $39bn from a high of $142bn before the financial crisis.

“Kudrin doesn’t want to give a red cent back to anyone,” says Chris Weafer, chief strategist at Uralsib investment bank in Moscow. “His big concern is that the oil price could collapse at any time. He knows the budget is vulnerable.”

At first glance, it is easy to see why Mr Kudrin is targeting the oil sector. In response to fears about production decline due to the heavy tax burden a few years ago, Mr Kudrin instituted tax holidays for fields in capital-intensive new regions such as east Siberia: as a result, business has been booming. Until the recent changes, oil companies such as Rosneft were making $45 in profit for every barrel produced in east Siberia, according to Ivan Mazalov, fund manager at Prosperity Capital Management. In west Siberia, by contrast, they made $7 to $8 per barrel.

But analysts say recent changes are slowing investment, raising the threat of new declines in production as soon as next year. Several western Siberian fields will become unprofitable next year if the extraction tax hike goes through.

The lobby is pushing for a systemic shift from the current, revenue-based system, which takes 90 per cent of oil companies’ revenue from all oil exports at prices above $25 per barrel, to a profit-based system by 2012.

It argues the current system is unfair because there has been a huge hike in costs since it was installed seven years ago, while the depletion of existing fields in west Siberia is forcing companies to develop more expensive remote fields.

The standoff is at the centre of a wider debate about Russia’s economic future. The current system was forged when the government clamped down on the freewheeling oil barons of the 1990s and gathered their windfall gains for diversifying the economy. But in spite of this, the economy is still – if not more so – dependent on energy.

One reason why the finance ministry is reluctant to move to a profits-based system is that it fears companies will revert to the transfer-pricing schemes they used in the 1990s when Russia last had a profits-based tax system.

“Until the system changed, companies very successfully minimised taxes,” says Mr Mazalov.

“The finance ministry needs to see what the costs are and that the companies are not skimming the margins,” says Sergei Vakulenko, head of the Moscow office of Cambridge Energy Research Associates, which is advising the government.

So far, the ministry has said that it could only introduce a profits-based system as an experiment at individual fields, pushing the deadline of 2012 way back.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Reuters: Total eyes up to 25 pct in Russia Yamal LNG-paperhttp://af.reuters.com/article/energyOilNews/idAFLDE66F0DF20100716

Fri Jul 16, 2010 7:55am GMT

MOSCOW July 16 (Reuters) - French oil major Total (TOTF.PA) is looking for a 20 to 25 percent stake in Russia's biggest liquefied natural gas (LNG) project, Yamal, Chief Executive Christophe de Margerie was quoted saying in an interview with Kommersant.

"We won't be the majority owner, because Novatek is keeping more than 50 percent. But in this case 25 percent is a sufficient share to effectively fulfil the role of a shareholder," de Margerie told the Russian business daily.

Novatek (NOTK.MM), Russia's No. 2 gas producer, said on Thursday it was looking to sell a 49 percent stake in its LNG project in the hydrocarbon-rich region on Russia's arctic Yamal Peninsula to several foreign partners. [ID:nLDE6610AO]

Total also owns a quarter of the shares in the Gazprom-led (GAZP.MM) company which will develop Russia's giant Shtokman gas field. [ID:nLDE64I29I]

Other international companies, including Royal Dutch Shell (RDSa.L), have also expressed interest in partnering with Novatek on Yamal, where Novatek owns licences to large natural gas reserves.

Novatek bought into Yamal LNG last year, when it acquired 51 percent of the company which holds the right to develop Yamal's South Tambey fields, with resources estimated at 1.3 trillion cubic metres.

It is not yet clear, however, if Novatek will receive the remaining 49 percent in Yamal LNG that it wants to sell to foreign firms.

Novatek can within three years exercise an option to purchase 24 percent of its shares owned by Volga Resources; the other 25 percent share is owned by Petr Kolbin, a shareholder in oil trading company Surgutex. (Reporting by Jessica Bachman; Editing by David Holmes)

16.07.2010

Oil and Gas Eurasia: Slavneft Increases Drilling, But Sees Production Sliphttp://www.oilandgaseurasia.com/news/p/0/news/8043

In the first six months of the current year, Slavneft produced 9.15 million tons of crude, 2.4 percent less than in the first half of 2009, the company reported in a news release. Slavneft also produced 429.6 billion cubic meters of gas in the first half of 2010, down 4.5 percent from January-June 2009.Since the beginning of the year, Slavneft has drilled 424,300 meters of rock and launched 80 new wells. Compared to the same period in 2009, drilling increased 6.4 percent.From January to June 2010, the company refined 10.6 million tons of oil or 87.6 percent of the volume it refined in the first half of 2009.Slavneft-Yaroslavnefteorgsintez refined 6.65 million tons (up 3.4 percent), while the Mozyr refinery processed 3.95 million tons (down 30.3 percent). The drop in refining at Mozyr is due to the drop in Russian oil supplies to the Belarussian facility.Copyright 2010, Slavneft. All rights reserved.

№ 6 (June 2010)

Oil and Gas Eurasia: SKOLKOVO And TNK-BP Launch Major Projects Academy In Russiahttp://www.oilandgaseurasia.com/articles/p/121/article/1244/

Moscow’s SKOLKOVO School of Management and TNK-BP have completed the first phase of a new modular education program aimed at creating a centre of excellence on project management within the company – the TNK-BP Major Projects Academy. The purpose of the Academy is to bring together leaders from different company departments for a systematic exchange of experiences, knowledge and specific project solutions in order to develop a common TNK-BP approach to project management using the most efficient practices and tools.

By TNK-BР

The program involves both departments’ managers from TNK-BP’s head office and directors of company subsidiaries in different regions of Russia. The list of participants was decided by a thorough multi—level selection process.

The training takes place over a period of five months, from July to November 2010. Each phase, the first of which was run on July 4—9, includes a theoretical section, a discussion of specific projects from TNK-BP’s practice and business games in which the participants work through elements of project management. Professors from top international business schools will be involved in the work of the Academy and industry experts will help students to analyze real market situations.

During the first phase, for example, TNK-BP leaders attended course on ‘Decision Making’ by Professor Zeger de Grave and on the ‘Fundamentals of Project Management’ by Aleksandr Kutuzov. They also discussed benchmarking of major projects in the oil & gas sector with Mary Ellen Yarossi from IPA and met the Deputy General director of the Rosatom State Corporation Petr Schedrovitsky.

After dividing into teams during the first few days of the program, the participants defined key areas of organizational change on which their future work would focus. Following an analysis of the situation inside the company, they then jointly with senior TNK-BP managers identified the key issues in each area, ranked them by priority and set to work on the projects. During the subsequent months of modular and inter-modular work the teams will assess current practices and develop new procedures and regulations for future implementation in the company. It is this teamwork on addressing specific tasks that lies at the heart of the Academy’s approach.

In 2011, there will be a supplementary session to analyze implementation of the teams’ projects.

“The creation of the Major Projects Academy is a unique joint effort by SKOLKOVO

and TNK-BP. And we hope that our experience in the fields of strategy, management and leadership, as well as TNK-BP’s expertise in the specifics of the oil & gas sector will help to generate a material business result from this program. Well thought out and clearly structured project work in teams will be a guarantee of success for the Academy and for the company as a whole,” noted Andrey Volkov, Rector of the Moscow SKOLKOVO School of Management.

“TNK-BP is focused on reinforcing its own management potential and creating an environment in which the most effective management techniques can be applied. The company is running several capacity building programs to help its key executives learn about the latest management trends, mistakes and best practices in other top companies, to swap experiences, and to analyze and select best-fit approaches for TNK-BP’s objectives and circumstances. They will also be given the opportunity to expand their individual management toolbox by mastering techniques beyond the standard management skills,” stated Andrey Yanovsky, TNK-BP Vice President, Human Resources and Organizational Development.

The Moscow SKOLKOVO School of Management is a joint project between Russian and international businesses that have come together to create a new-generation business school from scratch. With its focus on practical knowledge, the Moscow School of Management is designed to train leaders aiming to apply their professional expertise in rapidly growing markets. SKOLKOVO’s defining features are: leadership and enterprise, a focus on rapidly growing markets, and an innovative approach to teaching methods.

The Moscow SKOLKOVO School of Management is a private-public partnership under Russia’s priority national education project. It is funded exclusively by private investors with no support from the state budget. The Chairman of SKOLKOVO’s International Board of Trustees is the President of the Russian Federation Dmitriy Anatolyevich Medvedev.

Since 2006, SKOLKOVO has been running short Executive Education programs for senior and middle management. These include both open-format programs and specialized integrated modules tailored to company requirements. The first Executive MBA program was launched in January 2009, the first international Full-time MBA program – in September 2009, and the second Executive MBA in January 2010. Students are currently being enrolled for the MBA and Executive MBA programs starting in September 2010.

Energy Solutions: Lukoil and ERG Considering Partnership in Renewable Energyhttp://www.onlinetes.com/Lukoil-and-ERG-Considering-Partnership-in-Renewable-Energy-TES-071610.aspx

7/16/2010

With a key focus on the wind-energy sector

LUKOIL and ERG Renew signed a Memorandum of Understanding to set basic terms and conditions for cooperation in the market of renewable energy sources, with a key focus on the wind-energy sector.

In particular, the two companies will evaluate joint business opportunities in some Eastern European countries and Russia.

"Russia has a rather high wind-power potential. Wind energy, if promoted by the state, can be of good help to oilmen, especially in remote areas, scarce of power supplies. We are confident that cooperation with the Italian counterparts, experienced in green energy, will be effective", President of OAO LUKOIL Vagit Alekperov said.

ERG Renew is an ERG Group company that implements projects in the area of production of solar, wind and hydraulic energy. ERG Renew currently operates 6 wind farms with a total installed capacity of 144 MW in Italy, and 6 wind farms with a total installed capacity of 64.4 MW in France.

Gazprom

RBC: Gazprom Neft named Hunin-6 coordinator

http://www.rbcnews.com/free/20100715185933.shtml

      RBC, 15.07.2010, Moscow 18:59:33.Gazprom Neft has become coordinator in the Hunin-6 oil field development project in Venezuela, the Russian company's press office reported. No further details have been disclosed, however.

      As reported earlier, in April 2010, National Oil Consortium LLC and Venezuela's Petroleos de Venezuela SA registered a joint venture called PetroMiranda to develop the Hunin-6 block in the Orinoco oil belt, with the respective shareholdings of 40 and 60 percent. The National Oil Consortium comprises Lukoil, TNK-BP, Rosneft, Gazprom Neft and Surgutneftegas, with each holding 20 percent in the project.

Moscow Times: Gazprom Neft to Open AT-9 http://www.themoscowtimes.com/business/article/gazprom-neft-to-open-at-9/410498.html

16 July 2010

Gazprom Neft said Thursday that it expects to restart a crude oil processing unit at its largest refinery in Omsk in August after a fire at the facility earlier this year.

The crude distillation unit, known as AT-9, will return to production at the beginning of next month, a spokeswoman said. Omsk can process 390,000 barrels of oil a day.

(Bloomberg)

Bloomberg: Gazprom, Shell Sakhalin Gas Venture Reports Unexpected Profithttp://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/07/16/bloomberg1376-L5LKMM0UQVI901-2NK4OJ6H7O9AHA943KAAF0C7JJ.DTL

Friday, July 16, 2010

July 16 (Bloomberg) -- OAO Gazprom and Royal Dutch Shell Plc's Sakhalin-2 venture in Russia posted an unexpected profit last year after oil and liquefied natural gas shipments beat targets to offset losses from a delay in the project.

Sakhalin Energy, operator of Russia's only LNG plant, had net income of $582 million, compared with an expected loss of $870 million, according to a company presentation to investors obtained by Bloomberg News.

The partners had estimated a loss because a delay in the start of LNG output forced them to compensate customers for contracted volumes, two people familiar with the results said, declining to be identified in line with company policy. The Yuzhno-Sakhalinsk, Sakhalin Island-based venture doesn't report financial results. Sakhalin is off Russia's far eastern coast.

Sakhalin Energy loaded the first commercial LNG cargo in March 2009, a delay from a planned start in the second half of 2008. A total of 81 cargoes of LNG and 59 cargoes of oil were loaded, beating targets for the year by more than 47 percent and 11 percent, respectively.

The LNG plant has allowed Russia, the holder of the world's biggest gas reserves, to break into Asia Pacific markets and 65 percent of the volume contracted for Japan. LNG is gas cooled to a liquid for transportation by ship.

Capex, Expenses

Sales reached $3.6 billion last year and the venture cut operating expenses to $1.56 billion and capital expenditure to $846 million from a planned $2 billion and $1.14 billion, respectively, according to the presentation.

Gazprom, the majority shareholder, declined to comment on the presentation as did Ivan Chernyakhovsky, a spokesman at Sakhalin Energy. Vera Surzhenko, a Shell

spokeswoman in Russia, confirmed the venture posted a profit before interest and after taxes last year. She declined to provide figures or comment on the presentation.

The venture reached operational profitability last year, Shell Chief Executive Officer Peter Voser said in an interview with newspaper Vedomosti published yesterday.

The Sakhalin-2 partners had $21.3 billion in capital expenditure from 2001 through 2009, while total costs exceeded $24 billion, according to the presentation.

In 2005, Shell, then majority owner, said the second phase of the project, which involved year-round crude output and production of LNG, would cost $20 billion, double an original estimate. The announcement stirred controversy with the Russian government, which will share royalties only after the investment is recouped. The dispute on costs and environmental damage led the Hague-based company to agree to cede control of the project to state-run Gazprom in 2006.

Russia in 2007 approved a second stage of investment for Sakhalin-2, allowing the spending of $19.4 billion until 2014. That level refers to costs which under production sharing agreement can be recovered.

Gazprom controls Sakhalin Energy and Shell owns 27.5 percent. Mitsui & Co. holds 12.5 percent and Mitsubishi Corp. 10 percent.

--Editor: Jonas Bergman, Stephen Cunningham

15 July 2010 Last updated at 12:19 GMT

BBC: Gazprom pipeline 'could harm Russian nature reserve'http://www.bbc.co.uk/news/science+environment-10379139

By Katia Moskvitch Science reporter, BBC News

His old rifle might be slightly rusty, his moustache flecked with gray and his boots a bit worn out.

But the 51-year-old ranger Nikolai Ivanov says he is more ready than ever to fight for a wildlife sanctuary lost in the wilderness of the Karelian Isthmus in north-west Russia.

Never mind that his opponent is a powerful Russian energy giant - OAO Gazprom.

Over the past few years, the company has been working jointly with a number of European countries on the controversial Nord Stream project.

Once completed in 2012, this venture is meant to deliver natural gas to western Europe via two pipelines that will snake along the bottom of the Baltic Sea.

Much has been said and done to reassure environmentalists around the world about the relative safety of the undersea section of the project amid initial ecological concerns.

But the situation is different with the overland branch of the 917km-long gas pipeline, known as Gryzovets-Vyborg, in northern Russia. It will join the nautical section of the pipeline at the seaport of Vyborg on Russia's Baltic coast.

Russian ecologists say that some 1.3km of this pipeline runs through a "zakaznik" - a wildlife reserve not far from St Petersburg called Rakov Lakes, an important ornithological sanctuary.

It is home to thousands of geese, ducks, swans, blackcocks and other birds, of which many are endangered species.

This pipe does not belong to the Nord Stream company. Its sole owner is Gazprom, one of Nord Stream's main shareholders.

But the Russian gas giant says the pipeline does not go through the reserve.

'Wrong place'

Alexander Nikitin from the Saint Petersburg department of the international environmental organisation Bellona Foundation says that the NGO is considering taking Gazprom to court.

"It is clear that it's wrong to build a pipeline through a wildlife refuge," he said.

Ranger Ivanov agrees. Sitting in his small house a few steps from one of the lakes, he says the sanctuary is no place to build a pipeline.

Gazprom has already done lots of harm to the soil and plants with its first pipe, buried between the two Rakov lakes, he says.

A second one, he adds, will run parallel to the first, with construction planned for 2011. This one will make matters even worse Mr Ivanov says.

"They have turned everything upside down here with their bulldozers," he said.

"The entire ecosystem has been damaged, but the worst part is that they're not even doing anything to restore it."

Mr Ivanov was reluctant to go into much detail about the issue, fearing that his little uprising might cost him his job.

"Everyone is scared. People just don't want to fight with Gazprom, because you know - it's Gazprom! They just do whatever they want," he exclaimed.

"But I will stay by my lakes, I won't let them destroy the place," he added.

St Petersburg-based environmentalist Alexander Sutyagin, who is head of the NGO Monitoring BTS (Baltic Pipeline), said that the recently built pipe crosses several watercourses going to and from the lakes.

He said it affects the state of the soil on the site and, in turn, the water in the lakes.

"Besides, Gazprom employees ride through the reserve in off-roaders - how can we even call it a protected natural territory if there are off-roaders everywhere, [there is] deforestation and construction? What would the birds that live there say if they could speak and curse like us?"

But Gazprom says such accusations are totally groundless.

"The pipeline 'Gryzovets-Vyborg' does not run through the sanctuary Rakov Lakes," Gazprom's press office said in an e-mail to BBC News.

The company said that there was no deforestation on the site of the "zakaznik" either.

The pipeline does not go through the reserve because it is located in the same corridor as another pipe, built years ago, it added.

Ecologists say that this is true, but point out that the first pipeline runs through the "zakaznik" as well.

Local authorities

The sanctuary belongs to the St Petersburg region, where Gazprom leases the land.

The region's Committee for Natural Resources confirmed that Gazprom's pipeline does indeed run through the refuge, but that the authorities have defined a certain area inside it with slightly different regulations.

And in that area, the construction of the pipeline is permitted.

Dmitry Kovalev, a biologist from St Petersburg State University, was heavily involved in choosing the site for the overland pipeline. He worked closely with Gazprom when he was the director of the Rakov Lakes sanctuary.

He says that it was inevitable amid political and economic pressure that the Nord Stream project ran the pipes through the Karelian Isthmus. The region is covered with a multitude of lakes, rivers, marshes and forests full of wildlife.

"Could we have bypassed the reserve? Yes, I suppose we could have," he said.

"But there was already an old gas pipeline dating from the Soviet times running between the two Rakov Lakes from Russia to Finland. So we judged that using the same corridor would be better for the environment than digging a new one just outside the reserve and closer to another big lake."

But he said that the situation could be improved if either the company or the local authorities bothered to restore the sanctuary to its original form.

According to the preliminary damage estimates, it will require no more than 4m roubles ($126,500), he said.

But Gazprom says that the company has been paying out whatever is necessary to compensate for the environmental damage.

Whose responsibility?

When talking about the overland pipeline, many automatically associate it with the Nord Stream company.

Even in the official documents that permitted Gazprom to cut down forest on the site, the project is referred to as "the construction on the territory of the 'zakaznik' of the Northern European Gas Pipeline (that later became known as Nord Stream) on the Gryazovets-Vyborg site".

But the Nord Stream company makes it quite clear that the Russian overland pipe has no relation whatsoever with the nautical part.

When BBC News inquired about this with the company's headquarters in Switzerland, a press officer explained that the pipeline in Russia had "nothing to do" with Nord Stream - being a totally separate venture managed by Gazprom.

"We assume that other projects, just like ours, are carried out in line with the applicable legislation. We are doing our utmost to minimise the environmental impact of our activities.

"Overseeing all other activities related to gas production and gas use is a very complex task that cannot be performed by one single operator of one single part of a complex system," the letter said.

International concerns

Bellona environmentalist Alexander Nikitin said that such attitude raises numerous concerns.

Pipelines belonging to different companies interconnect, carrying the same gas from point A to point B, he said. And, inevitably, at some points along their routes there will be more harm caused to local ecology than at others.

He said that nations should refuse to take part in a project with potential environmental damages at any stage.

"I don't think it would ever be possible to have unique international standards for building pipelines and... unique environmental regulations, though it would be ideal," Mr Nikitin added.

"But in the case of Nord Stream it is simply unfair. Western Europe is receiving a clean product - natural gas - but at the cost of damage to the Russian environment."

"This is just not right."