Russia 110902

Basic Political Developments Moscow, Beijing say intervention in Syria impermissible – FM: Russia and China

have declared that interference in the affairs of Syria would be impermissible, the Russian Foreign Ministry said after a meeting of Russian Deputy Foreign Minister Mikhail Bogdanov and the Ambassador of China in Moscow Li Hui.

RUSSIA, U.S. PREPARING JOINT STATEMENT ON MISSILE DEFENSE TO BE MADE AT NEXT RUSSIAN-U.S. SUMMIT - RUSSIA'S ENVOY TO NATO ROGOZIN

o RUSSIA'S ENVOY TO NATO ROGOZIN PLANS TO VISIT IRAN IN NEAR FUTURE

o DEPLOYMENT OF EUROPEAN MISSILE DEFENSE RADAR IN TURKEY NOT THREATENING RUSSIA'S SECURITY - RUSSIAN ENVOY TO NATO ROGOZIN

o Rogozin: Radar EUROPRO in Turkey does not threaten Russia's securityTurkey to host NATO anti-missile radar - Turkey is to host an early warning system as part of NATO’s controversial anti-ballistic missile defense system in Europe. The US says the shield will protect Europe from attacks from Iran and North Korea, but Russia believes it is the real target.

Russian-American Wise Men Group to discuss missile defense in Brussels - On 2-3 September Brussels is to host expert advisors of the Wise Men Group on missile defense with the participation of Russian and U.S. experts

Regional powers responsible for security in Central Asia – Medvedevo Russia ready to help build power line from Central to South Asia -

Medvedevo Russia, Pakistan urge better Afghan security training - Russia and Pakistan

on Friday urged the Nato-led coalition in Afghanistan to step up the training of local security forces as it completes its planned staged withdrawal.

o RF ready to dvlp economic, political coop with Afghanistan-preso Russia, Asian leaders discuss drugs tradeo Tajik, Afghan and Pakistani leaders discuss economic coop, securityo Russian President to meet his Pak counterparto President Karzai Meets President Imam Ali Rahman

CIS SUMMIT DUSHANBE o Yanukovych plans to discuss gas price issue with Medvedev in Dushanbe

– Azarovo Naftogaz restructuring will call for revision of deals with Gazprom -

Ukrainian PM Azarovo Ukraine offers to clarify gas export volumes with Russia – Azarovo Russia, Tajikistan to discuss petrol duties, military presenceo Lukashenko will not attend CIS summit in Dushanbe - The Belarusian

delegation at a CIS summit in Dushanbe on September 3 will be led by

Prime Minister Mikhail Myasnikovich, presidential spokesman Pavel Lyogky told Interfax.

o Lavrov to attend CIS ministerial meeting - The ministerial meeting precedes a CIS summit scheduled on Saturday.

o Belated reform of the CIS - This year, the CIS turns 20, and it's looking shabby for its years. Most people in the CIS do not understand this bureaucratic organization's mission at all. It is more a discussion club than a coordinating body. But at the same time, CIS countries share a number of common problems across the region, including Afghanistan. Innokenty Adyasov for RIA Novosti

RME engaged in delivering humanitarian aid to DPRK, Kyrgyzstan GNP Chief: Proposed Gas Pipeline Would Require Just 18 Months to Build - Hong

told reporters Thursday if a deal is struck among the three parties, the pipeline would be completed quickly as construction would proceed simultaneously in sections to accelerate progress.

o S.Korea-Russia Summit to Discuss Pipeline Project UPDATE 1-Russia, China to discuss oil debt -Transneft source: Talks to be held on

Sept. 12-15; Total debt stands at around $100 mln; Russia hopes for huge gas contract with China

Libya buys 50,000 T wheat from Glencore - tracker Kazakhstan has purchased military equipment from Russia - The scope of supply

is kept in secret, but the republican army is known to have received T-72B tanks and TOS-1 heavy flamethrower systems.

Swedish Anna yacht detained in Chukchi Sea for RF border violationo Russia holds Swedish yacht over Arctic Ocean border violation

Russia Asked Guarantees for Future Claim against Bulgartabac - The Russian Federation has submitted a request for a guarantee for a future claim against the Bulgarian State-owned cigarette maker Bulgartabac Holding, but the Sofia City Court had not examined it.

Azerbaijani, Dagestani officials hold telephone talk - 1news.az reports citing Russian mass media, during the talks the sides discussed the problematic issue, related to the migration of the residents of Hrah-Uba and Uryan-Uba villages of the Khachmaz region of Azerbaijan to Russia.

Keys from Nice cathedral not likely to be transferred to Russian Church soon FSB opens coastal ports for fishermen - Fishermen in the Murmansk region can

now deliver their catch directly to ports in Teriberka and Liinakhamari without going to Murmansk for border and customs control.

Russian air carrier denies guilt in fur seals' death Collapse at Vladivostok suburb building site kills 1, injures 4 Defense Ministry Cancels $1Bln Worth of Arms Contracts - By Nikolaus von

Twickel Interfax Moscow press review for September 2, 2011 RIA Russian Press at a Glance, Friday, September 2, 2011

Moscow Mayor says ready to top United Russia electoral list Russia's Milner one of most influential - Russian businessman Yuri Milner joined

the list of most influential people in the world in the annual ranking published by the influential magazine "Vanity Fair," the co-owner of the company Mail.ru and Digital Sky Technologies came in the 23rd place.

Disagreement Stymies State Purchasing Reform - Vedomosti Moscow's 'brick revolution' hits the skids - Muscovites have been stumbling over

piles of bricks for months as the Russian capital's asphalt sidewalks are replaced. But Mayor Sergey Sobyanin's pet project is taking too long and some suspect corruption is involved.

They do what we allow them to do - Russian officials are unable to refuse a 150,000-ruble bribe to give a Chinese citizen legal status Vyacheslav Postavnin, president of the 21st Century Migration Foundation

Electronic Corruption - Corruption Scuppers Another Government Project Aimed at Modernizing Russia

Billions of Dollars of Russian Business Suffers Along With Syria - By Howard Amos Hassan Haidar: Moscow concerned … about the army - The Russian message did

not mark a change in Moscow’s quasi-absolute support of al-Assad. But in addition to it being an attempt to eliminate the weak points affecting its defense of the Syrian president ─ especially in international forums ─ and lift the embarrassment whenever it refuses to condemn the killings and arrests he is undertaking, it relays Russia’s increasing concerns toward the excessive use of the armed forces, knowing that the continuation of the Russians’ presence and influence in this country are linked to these forces’ unity, stability and armament.

For Russia, New Mideast Will Be a Tough Arms Market - Written by David Rosenberg

‘Turkey risks dependency on Moscow’ - A deal for Turkey’s first nuclear plant to be built by Russia’s Atomstroyexport will make the country more dependent on Russia, a US diplomat says in a leaked cable

National Economic Trends Russia had zero inflation in August – Ulyukayev Russia won't adjust policy on mkt volatility-cbank Bank of Russia's net FX purchases at $500m in August Gaidar Institute's polls suggest industrial supply is outperforming demand in

August Moscow markets not immune to the global panic bug Russia halts grain deliveries due to backlog MOSCOW BLOG: Investment into Russia triples - is the tide turning? Russia markets fall, await US payrolls

Business, Energy or Environmental regulations or discussions Rosneft Bank Unit to Handle Utilities Payments, Kommersant Says

Polymetal Climbs 4th Day This Week as Gold and Silver Advance TMK's first half net profit soars 285 pct to $258 mln Alrosa to split shares Sollers transfers right to sell and service Fiat cars to Fiat Mitsubishi to bring electric vehicles to Russia Antitrust Laws May Be Eased for Retail Chains Russian poultry volume increases year on year

Activity in the Oil and Gas sector (including regulatory) UPDATE 1-Russia Aug oil output hits post-Soviet record Bashneft, Tatneft May Get Extraction Tax Break, Interfax Says Med Crude-Urals strengthens, spot tenders awarded TNK-BP Said to Sell East Siberian Oil for October to BP, Unipec Irkutsk region announces auction for exploring two deposits Mass sale of filling stations begins in Altai Rosneft - Details From Conference Call On ExxonMobil Agreement

Gazprom Construction of Sakhalin – Khabarovsk – Vladivostok GTS nearing completion Watchdog: Gazprom's unauthorized spending nears $1bn in 2009

o Gazprom 'lost' $1 billion in 2009 - Audit Chamber Gazprom Neft: Small field in Orenburg bought; larger acquisitions expected this

montho Russia Gazprom Neft buys oilfield with 25 mln T of reserveso JSC Gazprom Neft : Gazprom Neft acquires a deposit in the Orenburg

region

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Full Text Articles

Basic Political Developments

12:27 02/09/2011ALL NEWS

Moscow, Beijing say intervention in Syria impermissible - FM

http://www.itar-tass.com/en/c154/216925.html

MOSCOW, September 2 (Itar-Tass) —— Russia and China have declared that interference in the affairs of Syria would be impermissible, the Russian Foreign Ministry said after a meeting of Russian Deputy Foreign Minister Mikhail Bogdanov and the Ambassador of China in Moscow Li Hui.

"As they discussed the situation in Syria, the diplomats reaffirmed the high-principled position of their states on the inadmissibility of external interference in Syrian affairs, the need for the complete cessation of all violence in that country, urgent steps to implement the political and socio-economic transformation, as well as establishment of a broad national dialogue in order to achieve the early restoration of civil peace and accord," the Russian Foreign Ministry said.

"There was an exchange of views on the situation in Libya and around it, in particular, the prospects of post-crisis revival of the country with active international support, primarily through the UN and its Security Council," the Foreign Ministry said.

09/02 12:59   RUSSIA, U.S. PREPARING JOINT STATEMENT ON MISSILE DEFENSE TO BE MADE AT NEXT RUSSIAN-U.S. SUMMIT - RUSSIA'S ENVOY TO NATO ROGOZINhttp://www.interfax.com/news.asp

09/02 12:35   RUSSIA'S ENVOY TO NATO ROGOZIN PLANS TO VISIT IRAN IN NEAR FUTUREhttp://www.interfax.com/news.asp

12:15DEPLOYMENT OF EUROPEAN MISSILE DEFENSE RADAR IN TURKEY NOT THREATENING RUSSIA'S SECURITY - RUSSIAN ENVOY TO NATO ROGOZINhttp://www.interfax.com/news.asp

GOOGLE TRANSLATION

http://www.rg.ru/2011/09/02/bezopasnost-anons.html

Rogozin: Radar EUROPRO in Turkey does not threaten Russia's security02.09.2011, 12:32President's Special Representative of the Russian Federation on cooperation with NATO on missile defense, Russia's permanent representative in the alliance, Dmitry Rogozin, said Moscow does not consider the decision on the deployment of early warning radar in Turkey as a serious threat to national security. On it informs "Interfax".- It is necessary to note two circumstances, and the first thing: according to Russian military experts, the deployment of the radar in Turkey do not directly threaten Russia's strategic nuclear forces, "- said Rogozin.- On the other hand, - added the president's special representative - the point is that the U.S. planned, regardless of the consultations that they are in the format of NATO and the wider - with the participation of the Russian Federation, continue to implement a plan to

deploy military infrastructure Anti-Ballistic Missile (ABM) in Europe.As noted, the decision to deploy the radar on the territory of one of the southern European countries - members of the alliance by the United States have been taken long ago.- That is, in fact, one of the elements pofazovo adaptive plan U.S. President Barack Obama for U.S. missile defense deployment in Europe "- said the diplomat.According to him, still was some intrigue, which country would adopt the radar.- Was talking about Bulgaria, and Romania, which already hosts base interceptor missiles, is also among the candidates present and Turkey - has reminded President's special representative.- When in July I met with President of Turkey Mr. Abdullah Gul in Ankara, a delegation of military experts from the U.S., and is then held within the framework of the negotiations it was agreed to deploy early warning radar in the south-east Turkey, near the borders of Iran - said Rogozin.Today it became known that the radar early warning about the threat of missile attack as part created by the U.S. and NATO missile defense system will be placed in Turkey.Technical work and negotiations on the deployment of a radar carried by government, in close coordination with concerned agencies and organizations and have entered the final stage, the spokesman said the Turkish Foreign Ministry.

Deployment of European Missile Defense Radar In Turkey Not Threatening Russia's Security - Russian Envoy To Nato Rogozin

Turkey to host NATO anti-missile radarhttp://rt.com/news/turkey-host-nato-radar/

Published: 2 September, 2011, 12:13Edited: 2 September, 2011, 12:13

Turkey is to host an early warning system as part of NATO’s controversial anti-ballistic missile defense system in Europe. The US says the shield will protect Europe from attacks from Iran and North Korea, but Russia believes it is the real target.

The talks on the advanced AMD radar are in “their final stages”, Turkey's Foreign Ministry announced on Thursday. Few details were released, but Turkish media reports say the early warning outpost is to be deployed in the country's south-east.

Turkey has been under consideration as one of the possible hosts for some elements of the US and NATO anti-missile system for several years. Barack Obama’s administration scrapped Bush-era plans which saw the Czech Republic and Poland as the host countries for the AMD bases, and said the whole concept would be revised.

The revision was welcomed by Moscow, which believed that the planned shield would compromise its national security. The move was an important part of the diplomatic thaw sponsored by Presidents Medvedev and Obama, also known as the “reset of relations” between the two countries.

Russia wanted to build a joint system, which would use NATO and Russian capabilities to defend against a possible attack, but would not be out of Moscow's control. However the revised AMD plans failed to address Russia's concerns, with Moscow continuing to view the current plan for the European anti-missile system with suspicion.

NATO approved the new concept at a summit in Lisbon last year. Turkey says its participation in the system would strengthen both NATO and Turkey's own defense capacities.

09/02 09:00   Russian-American Wise Men Group to discuss missile defense in Brusselshttp://www.interfax.com/

CORRECTED GOOGLE TRANSLATIONhttp://omsk.kp.ru/online/news/968084/Russian-American Wise Men Group to discuss the missile defense problemThe meeting will be held September 2-3 in BrusselsSasha Pyatnitskaya - 09/02/2011 5:03On 2-3 September Brussels is to host expert advisors of the Wise Men Group on missile defense with the participation of Russian and U.S. expertsRussian envoy to NATO Dmitry Rogozin told reporters on Thursday.According to him, “Stanford professors, U.S. security policy-makers, and our outstanding defense workers" will come to Brussles, Interfax reports.

RT News line, September 2

Regional powers responsible for security in Central Asia – Medvedevhttp://rt.com/politics/news-line/2011-09-02/#id17465

11:31

Russia, along with Pakistan, Afghanistan and Tajikistan have sole responsibility for security in the Central Asian region, President Dmitry Medvedev said after meeting with leaders of these countries in Dushanbe, Tajikistan, on Friday. Other partners’ contribution to security efforts is important, but they remain powers outside the region, the Russian president said. Medvedev has been in discussions with Afghan President Hamid Karzai, Pakistani President Asif Ali Zardari, and Tajik President Emomali Rahmon about steps to normalize the situation in Afghanistan and its promote its economic recovery, as well as joint measures to combat terror and drug threats.

12:42 02/09/2011ALL NEWS

Russia ready to help build power line from Central to South Asia - Medvedev

http://www.itar-tass.com/en/c154/216941.html

DUSHANBE, September 2 (Itar-Tass) —— Russia is waiting for an invitation to participate in the construction of a power transmission system from Central Asia to South Asia, and it is ready to invest into the project hundreds of millions of dollars, President Dmitry Medvedev said after a meeting with his counterparts from Afghanistan, Pakistan and Tajikistan.

The project at issue is called CASA-1000. It involves the export of electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan.

"Russia is ready to take part in this project, it is prepared to invest substantial funds. Hundreds of millions of dollars are at stake," said Medvedev at a news conference after a four-party summit.

"But for this the necessary organizational decisions are to be taken to invite us there," said the Russian head of state.

Russia, he said, is also interested in joining the project CAPI, which provides for laying an export pipeline from Central Asia through Afghanistan to Pakistan and India.

"We are ready to take part in it, too," said Medvedev.

"And of course, we are ready to take part in bilateral projects, which have traditionally existed between Russia and the friendly countries present here," said the Russian president.

He said that the quartet of countries was in the process of developing a "road map," which will include specific proposals for developing cooperation in the socio-economic sphere.

"It's time to move from words to action ... There are a number of projects that have long been on the table but stayed idle and that should be implemented," Medvedev said.

Russia, Pakistan urge better Afghan security traininghttp://www.dawn.com/2011/09/02/russia-pakistan-urge-better-afghan-security-training.html

AFP

DUSHANBE: Russia and Pakistan on Friday urged the Nato-led coalition in Afghanistan to step up the training of local security forces as it completes its planned staged withdrawal.

The call by Russian President Dmitry Medvedev and his President Asif Ali Zardari was joined during a regional summit by Afghanistan’s Hamid Karzai and Tajik leader Emomali Rahmon.

“The heads of state emphasise that reduction of foreign military presence in Afghanistan should be accompanied by adequate increase of efforts by the participants of the international coalition for training and arming Afghan national security structures,” the leaders’ joint statement said.

The four nations also agreed to work more closely to combat extremism and drug trafficking along with organised crimes.

“We are ready to develop our cooperation with Afghanistan both in economic terms and in supporting a dialogue on security issues,” Medvedev said during a separate meeting with the Afghan president.

About 10,000 US troops are due to leave Afghanistan this year as part of a gradual drawdown through the end of 2014.

US President Barack Obama announced in June another 23,000 American troops would leave Afghanistan by the end of next summer and leave behind a 65,000-strong force.

Russia has voiced concern over the region’s future security but firmly rejects the idea of getting directly involved in Afghanistan after losing a devastating war there during the Soviet era.

Medvedev stressed Friday that the new Afghan force should be able to “independently provide for the defence capabilities of the state, and combat extremist groups and drug traffickers.”

12:14 02/09/2011ALL NEWS

RF ready to dvlp economic, political coop with Afghanistan-pres

http://www.itar-tass.com/en/c154/216912.html

DUSHANBE, September 2 (Itar-Tass) —— Russia is ready to develop cooperation with Afghanistan both in the economic sphere and the field of politics and security, Russian President Dmitry Medvedev said at a meeting with his Afghan counterpart Hamid Karzai in Dushanbe on Friday.

“We are ready to develop our cooperation with Afghanistan both in the economic sphere and the maintenance of a political dialogue, a dialogue in the sphere of security and a dialogue on humanitarian issues,” Medvedev stressed.

Karzai agreed with his view saying that “Afghanistan is satisfied with the expansion of relations with Russia.” “This is the natural way which we should follow,” the Afghan president said.

Apart from a bilateral meeting, Medvedev and Karzai took part in a quadrilateral summit with their colleagues from Pakistan and Tajikistan in Dushanbe.

Russia, Asian leaders discuss drugs tradehttp://www.monstersandcritics.com/news/europe/news/article_1660524.php/Russia-Asian-leaders-discuss-drugs-trade

Sep 2, 2011, 6:41 GMT

Moscow - How to stop massive volumes of illegal drugs from moving through Central Asia was slated as the top issue at a Friday four-way summit in Dushanbe attended by the leaders of Russia, Afghanistan, Pakistan and Tajikistan.

Russian President Dmitry Medvedev was also planning to use the summit in the Tajik capital to hold bilateral talks with his Afghan counterpart, Hamid Karzai, and Pakistan President Asif Ali Zardari.

The meeting with Karzai would focus on regional conflicts, terrorism and trade, Kremlin officials said.

Kremlin spokesmen in a pre-summit briefing to Moscow reporters predicted Medvedev would ask Karzai for an intensified Afghan government campaign to destroy opium poppy crops.

Kabul has generally avoided such a move in the past because of fears of increasing rural support for the Taliban insurgency.

A planned afternoon meeting between Medvedev and Zardari would be devoted to economic issues, particularly in energy and trade, the officials said.

During the summit, Russia was expected to repeat calls for better policing of Tajikistan's porous southern border, where most heroin and heroin precursors destined for European markets is believed to move north en route to Europe, Russian media reported.

Tajikistan President Emomalii Rahmon has in the past rejected Moscow offers to deploy Russian border troops to his country, saying Dushanbe is capable of securing its frontiers without outside help.

09:08 02/09/2011ALL NEWS

Tajik, Afghan and Pakistani leaders discuss economic coop, security

http://www.itar-tass.com/en/c154/216779.html

DUSHANBE, September 2 (Itar-Tass) — Presidents of Tajikistan, Afghanistan and Pakistan have called for stronger and deeper tripartite cooperation in economy and regional security, the Tajik leader’s press service said on Friday.

Emomali Rakhmon, Hamid Karzai and Asif Ali Zardari met late on Thursday ahead of the summit of the Dushanbe Four, where Russian President Dmitry Medvedev will take part as well.

Speaking about the Tajik-Afghan relations Rakhmon and Karzai paid “special attention to the implementation of agreements concerning unification of energy and transport systems,” the press service said.

The two leaders underlined that over the past five years the bilateral trade increased twenty-fold after several ferry links were opened across the Pyandzh River.

They also stressed the need for the soonest possible completion of the construction of Sangtuda-Kunduz-Puli-Khumri power transmission lines.

Rakhmon and Karzai expressed their common opinion on the need to step up bilateral cooperation in border security, the fight against terrorism and drug trafficking following the announced withdrawal of the international coalition forces from Afghanistan.

This theme also was high on the agenda at the talks of the Tajik and Pakistani leaders.

The three countries’ presidents also focused their intention on the agenda of the upcoming summit of the Dushanbe Four expressing confidence that “it will be a big step towards boosting joint economic cooperation and drafting a concrete plan of actions in ensuring security in the region,” the press service said.

Russian President to meet his Pak counterparthttp://zeenews.india.com/news/world/russian-president-to-meet-his-pak-counterpart_729450.html

Last Updated: Thursday, September 01, 2011, 23:52

Moscow: Russian President Dmitry Medvedev is scheduled to meet his Pakistani counterpart Asif Ali Zardari and Afghan leader Hamid Karzai in Dushanbe tomorrow for bilateral and quadrilateral meetings convened by Tajik President Emomali Rahmon.

The situation in Afghanistan, combat against terrorism, illegal drug trade and economic rebuilding of Afghanistan will be the main issues at the third quadrilateral summit of the leaders of Russia, Afghanistan, Pakistan and Tajikistan, who last time had met on similar in August 2010 in Russia's Black Sea resort of Sochi.

"In this context, the issues of enhancing regional cooperation in stabilising the situation in Afghanistan and Afghan-Pakistan frontier area with the involvement of multilateral organisations like SCO and CSTO (Russia-led post-Soviet Collective Security Treaty Organisation) will be discussed at the quadrilateral summit," the Kremlin said in its statement.

Pakistan along with India is an observer in the Russia-China-led Shanghai Cooperation Organisation (SCO) and Afghanistan is seeking an observer status in the regional organisation.

"Russia highly values efforts of its partners in the 'quartet' in combating terrorist threat and is in favour of involving Pakistan and Afghanistan in the joint efforts on the basis of SCO's anti-narcotics strategy for 2011-2016 and the action plan for its implementation approved at SCO Astana summit on June 14-15," the statement said.

The leaders of Russia, Afghanistan, Pakistan and Tajikistan are also expected to focus on strengthening their trade and economic relations, including the implementation of joint infrastructure and energy projects and industrial modernisation.

President Karzai Meets President Imam Ali Rahmanhttp://bakhtarnews.com.af/en/index.php?news=6384

01 September, 2011 08:19:00

Friday, September 02, 2011 Kabul (BIA) Hamid Karzai president of the Islamic Republic of Afghanistan to participate at the quadripartite meeting of Afghanistan, Tajikistan, Russia and Pakistan has arrived Dushanbe capital of Tajikistan yesterday.

Hamid Karzai president of the Islamic Republic of Afghanistan to participate at the quadripartite meeting of Afghanistan, Tajikistan, Russia and Pakistan has arrived Dushanbe capital of Tajikistan yesterday. While arriving in Dushanbe, president Karzai met with Imam Ali Rahman president of Tajikistan at the Milat (nation) palace yesterday afternoon. The presidential press office told BIA, in this meeting Zolmai Rasoul Afghan foreign minister, Rangen Dadfar Spanta national security advisor, Zerra Ahmad Moqbel minister of anti-narcotic and Abdul Ghafor Arez Afghanistan ambassador in Tajikistan were president. In this meeting the sides talked and discussed on bilateral relations between the two countries and development of Afghanistan. In this meeting the Tajikistan president said, the construction work of the fifth bridge between Afghanistan and Tajikistan will start soon. President Rahman said, with construction of this bridge economic developments improve, transportation of Afghan students to Tajikistan will get easier and in fact it connects the two nations. President Karzai appreciated the cooperation of friendly country Tajikistan to Afghanistan, called it positive in improvement of economics relations between the two countries. President Karzai said, the projects which have been implement by Tajikistan provided facilities in economic and cultural fields between the two brother nations. Translated By: Ahmad Rateb Nabizada

CIS SUMMIT DUSHANBE

September 02, 2011 11:52

Yanukovych plans to discuss gas price issue with Medvedev in Dushanbe – Azarovhttp://www.interfax.com/newsinf.asp?id=270182

KYIV. Sept 2 (Interfax) - Ukrainian President Viktor Yanukovych plans to discuss the gas price issue with Russian President Dmitry Medvedev at a meeting in Dushanbe, Ukrainian Prime Minister Mykola Azarov said.

"The president of Ukraine departed for Dushanbe for a CIS summit today. He will meet with the Russian president, and this theme will be brought up once again," Azarov told journalists in Kyiv on Friday.

Ukraine would like to hold negotiations with Russia to adjust the volume of gas it will need in 2012 and terms and conditions of gas transfer across Ukraine, he said.

The Ukrainian government has sent a letter to the Russian government to set out its reasons for holding negotiations on gas, Azarov said.

"We have every reason to invite Russia to hold negotiations in line with the [2004] intergovernmental agreement to adjust the volume of gas supply for 2012 and terms and conditions of gas supply and transfer," he said.

va

(Our editorial staff can be reached at eng.editors@interfax.ru)

September 02, 2011 12:16

Naftogaz restructuring will call for revision of deals with Gazprom - Ukrainian PM Azarovhttp://www.interfax.com/newsinf.asp?id=270194

KYIV. Sept 2 (Interfax) - The restructuring of the Ukrainian state energy provider Naftogaz Ukrainy will call for revising its agreements with Russia's Gazprom, Ukrainian Prime Minister Mykola Azarov said.

"Naftogaz Ukrainy as a business entity will cease to exist, there will be a liquidation period, and some time after all the necessary formalities are observed, absolutely different new companies will start operating on the market," Azarov told journalists in Kyiv on Friday.

"Therefore, all agreements existing now will be revised," Azarov added.

va eb

(Our editorial staff can be reached at eng.editors@interfax.ru)

Ukraine offers to clarify gas export volumes with Russia – Azarovhttp://www.interfax.com.ua/eng/main/78212/

10:33

Ukraine has proposed holding talks with Russia to clarify volumes of natural gas exports and gas transit terms for 2012, Ukrainian Prime Minister Mykola Azarov told journalists in Kyiv on Friday.

A letter outlining Kyiv's arguments in favor of such talks has already been forwarded to the Russian government, Azarov said.

"We have all grounds to propose holding negotiations in Russia in accordance with the interstate agreement [dated 2004] to clarify gas delivery volumes for 2012, as well as the terms for gas exports and gas transit," the Ukrainian premier said.

02.09.2011

Russia, Tajikistan to discuss petrol duties, military presencehttp://en.trend.az/regions/casia/tajikistan/1925572.html

[02.09.2011 12:37]

Visiting Russian President Dmitry Medvedev will hold summit talks with his Tajik counterpart Emomali Rakhmon on Friday to resolve the most complicated issues in bilateral economic and military cooperation, Itar-Tass reported.

A high-ranking source in the Tajik foreign ministry told Tass Russia considerably increased export duties on light petroleum products this year which triggered a 44 percent rise in petrol prices since May. "It is specifically painful for Tajikistan" as the country imports close to 90 percent of petrol and lubricants from Russia, the source said.

He also said Rakhmon believes Russian business is poorly investing into major energy and mining projects in Tajikistan and delays the construction of two hydropower plants in the east of the country. Still Russia remains the number 1 trade partner of Tajikistan and

considerably overtakes China, Kazakhstan, and Turkey.

The source said Tajikistan is grateful to Russia for the construction of the Sangtudin hydro power plant and welcomed the growing role of Gazprom which will develop four promising gas fields.The Kremlin said trade turnover upped 12.7 percent in 2010 to 886.2 million dollars and by 1.7 percent in the first six months of 2011.

As for military cooperation, Tajikistan wants to sign a new agreement on border issues with Russia. The source said it has to fix the status of Russian border guards deployed in Tajikistan and "also to confirm Russian conviction that Tajikistan is capable of protecting its borders by itself."

The previous agreement expired in April and talks on a new one "have been going difficulty, but constructively, without emotions and haste,"according to Foreign Minister Khamrakhon Zarifi. He said "neither party has officially raised the issue of the return of Russian border guards.The number of advisers, their functions and military-technical cooperationwere discussed."

Both presidents will also discuss the terms of the deployment of the Russian military base which Rakhmon has numerously described as "a reliable security guarantee for Tajikistan and the whole region."Russia wants to use the reconstructed Aini military airfield near Dushanbe where aircraft of any type can land now. Kremlin chief-of-staff

Sergei Naryshkin said in June "the issue of the joint use of the Tajik airfield will be discussed in the framework of September visit by Dmitry Medvedev."

September 02, 2011 11:26

Lukashenko will not attend CIS summit in Dushanbehttp://www.interfax.com/newsinf.asp?id=270171

MINSK. Sept 2 (Interfax) - The Belarusian delegation at a CIS summit in Dushanbe on September 3 will be led by Prime Minister Mikhail Myasnikovich, presidential spokesman Pavel Lyogky told Interfax.

"The prime minister has all the necessary powers so that the Belarusian delegation can work at the summit properly and efficiently," he said.

va

(Our editorial staff can be reached at eng.editors@interfax.ru)

06:30 02/09/2011ALL NEWS

Lavrov to attend CIS ministerial meeting

http://www.itar-tass.com/en/c154/216730.html

DUSHANBE, September 2 (Itar-Tass) —— Russian Foreign Minister Sergei Lavrov will participate in a CIS ministerial meeting on Friday which will discuss 17 issues.

Foreign ministry spokesman Alexander Lukashevich said “the ministers will discuss vital issues in the development of multilateral cooperation on the CIS space and will exchange opinions on further interaction avenues in the CIS framework, including harmonization of integration processes in the region.”

As for security issues, Lukashevich said the ministers will discuss several documents which “have to give an additional impulse to the development of collective interaction in law enforcement sphere, in promoting security and the fight against terrorism, in migration and demographic policy, humanitarian guideline.”

The ministerial meeting precedes a CIS summit scheduled on Saturday.

On Friday Lavrov will also participate in the opening ceremony of a Russian science and culture center in Dushanbe.

Belated reform of the CIShttp://en.rian.ru/analysis/20110901/166361883.html

22:07 01/09/2011

Innokenty Adyasov for RIA Novosti

On September 1, President Dmitry Medvedev heads to the Tajik capital of Dushanbe for an intensive three-day visit. He will hold official tete-a-tete talks with his Tajik counterpart Emomali Rakhmon, attend a presidential meeting with the heads of Afghanistan, Pakistan and Tajikistan and, finally, join the CIS anniversary summit.

This year, the CIS turns 20, and it's looking shabby for its years. Most people in the CIS do not understand this bureaucratic organization's mission at all. It is more a discussion club than a coordinating body. But at the same time, CIS countries share a number of common problems across the region, including Afghanistan.

Afghan bid to join CIS

Combat action in Afghanistan and the continuing destabilization in Pakistan are creating tensions in Central Asia and Russia. The problem is not simply drug trafficking. Afghan militants could potentially break into the CIS territory. Medvedev will discuss these issues with his Afghan, Pakistani and Tajik colleagues on September 2-3.

Afghanistan is a time-bomb for the region. The withdrawal of the NATO coalition troops is bound to escalate tensions and could make developments unpredictable.

As of 2008, Kabul has expressed an interest in joining the CIS as a full-fledged member. Afghan representatives have already participated in the CIS Inter-Parliamentary Assembly's sessions in St. Petersburg without a right to vote.

Indeed, it is clear what Kabul would gain from joining the CIS as this would automatically lead to transport infrastructure development, CIS investments for the Afghan economy and military and technical cooperation. But does the CIS need more problems given its present instability? Kabul's bid to join the CIS is unlikely to be endorsed in the mid-term. However, the CIS could soon be forced to intensify its cooperation with Afghanistan, above all in military and security areas.

Who won't attend the summit and why

Uzbek President Islam Karimov has already stated that he will not attend the CIS anniversary summit in Dushanbe on Sept. 2-3. Instead, Prime Minister Shavkat Mirziyev will represent Uzbekistan at the summit.

Karimov also refused to take part in the presidential summit of the Collective Security Treaty Organization (CSTO) in Astana several weeks ago.

Generally speaking, the Uzbek president has rarely participated in major CIS events at the interstate and regional level in the past few years. Journalists have traditionally referred to his disappearing act as a "conspicuous absence." By not attending, Karimov demonstrates his disappointment with integration projects initiated by Russia in the post-Soviet space.

In the past few months - given the withdrawal of the NATO troops from Afghanistan - Uzbekistan has considered returning U.S. military bases to the country. Apparently, Karimov links Uzbek security not with the CIS or CSTO, but rather with U.S. military assistance.

Azerbaijani President Ilham Aliyev also will not attend the summit. Baku is openly displeased with the position of the CIS - and primarily Russia's stance - on the Nagorny-Karabakh conflict. The demarche is surprising, as both Russia and the CIS as a whole have repeatedly supported Azerbaijan's territorial integrity. As of 1992, the CIS has

repeatedly acted as a mediator in settling the conflict and its withdrawal from the negotiations will not lead to a compromise.

CIS as commonwealth of nations

Despite all the justified criticism of the CIS, it still remains the only integration association to incorporate most former Soviet Union republics. There is no point renouncing its achievements over the past 20 years, such as visa-free travel. But free movement also has a reverse side in illegal migration. In this context, the summit's participants plan to adopt a program to counter illegal migration in 2012-2014.

On the whole, the future of the CIS will depend on the CIS Executive Committee's ability to offer real projects to CIS countries, whose implementation will increase their living standards and make their economies more competitive.

Ultimately, the CIS may become an analogue of the British Commonwealth, which is formally the largest inter-state association in the world, albeit one without any real power. Its primary emphasis is sports and cultural projects.

Little time remains to re-launch the CIS. CIS countries plan to form the Eurasian Union on the basis of the Customs Union and Common Economic Space of the EurAsEC in 2012. This union will most likely define further post-Soviet integration. In its present form, the CIS is unlikely to be able to compete with a potentially powerful Eurasian Union.

Failed confederation

Few people remember that the heads of Russia, Ukraine and Belarus first spoke about the CIS as a confederation that would preserve a common economic and information space, as well as a common currency.

The Alma Ata declaration of December 21, 1991 made special mention of a common CIS defense policy and control over nuclear weapons.

However, it soon became clear that the CIS was more an instrument for a peaceful divorce of the former Soviet republics than an efficient integration association.

Each CIS country started conducting its own policy in economy, defense, security, international relations and other spheres. Although the CIS adopted numerous programs, concepts and agreements, the preponderant majority of them remained on paper.

As of summer 2010, the EurAsEC integration project - the Customs Union - began to gain momentum in the post-Soviet space. Now, Russia, Belarus and Kazakhstan are members, but it is also open to new participants. Its formation has questioned the need to re-launch a free-trade zone in the CIS, a project which the CIS Executive Committee has worked on over the past few years.

De facto, post-Soviet economic integration issues are increasingly falling within the competence of EurAsEC.

Innokenty Adyasov is a leading consultant on the expert council of the State Duma Committee for CIS Affairs.

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

11:23 02/09/2011ALL NEWS

RME engaged in delivering humanitarian aid to DPRK, Kyrgyzstan

http://www.itar-tass.com/en/c154/216858.html

MOSCOW, September 2 (Itar-Tass) —— The Russian Ministry for Emergencies (RME) delivers humanitarian aid to the DPRK and Kyrgyzstan on the sidelines of international organizations, ITAR-TASS learnt at the RME Information Department on Friday.

“The RME delivers wheat flour to the population of the DPRK on the sidelines of the UN World Food Programme at the expense of dues of the Russian Federation,” the source said.

Besides, within the framework of the implementation of the Memorandum on Mutual Understanding between the RME and the International Civil Defence Organization, supplies of humanitarian cargoes to Kyrgyzstan are carried out. “The question is of building materials - - saw timber, metal and professional flooring,” the source specified.

GNP Chief: Proposed Gas Pipeline Would Require Just 18 Months to Build http://world.kbs.co.kr/english/news/news_In_detail.htm?No=84272&id=In

Write 2011-09-02 15:29:04   Update 2011-09-02 15:52:55

Ruling Grand National Party (GNP) chairman Hong Joon-pyo said the proposed gas pipeline to run from Russia to South Korea through North Korea would take just one year and six months to build.

Hong told reporters Thursday if a deal is struck among the three parties, the pipeline would be completed quickly as construction would proceed simultaneously in sections to

accelerate progress.

Hong said the gas pipes would be underground. He also said that South Korea has prepared responses to address various issues that could be raised by the North after the pipeline is finished.

Russian President Dmitry Medvedev and North Korean leader Kim Jong-il have apparently agreed in principle on building the pipeline. The two Koreas and Russia will hold negotiations on it in November this year.

S.Korea-Russia Summit to Discuss Pipeline Project http://english.chosun.com/site/data/html_dir/2011/09/02/2011090201092.html

The presidents of South Korea and Russia are expected to meet in November to give shape to a massive gas pipeline project from Siberia through North Korea. The project was agreed in principle by North Korean leader Kim Jong-il and Russian President Dmitry Medvedev on Aug. 24.

Russia's state-run gas corporation Gazprom and the Korea Gas Corporation are reportedly in negotiations. In reply to an email from the Chosun Ilbo on Wednesday, a Gazprom spokesman said, "Gazprom and the North Korean government are holding dialogue on cooperation in the energy sector. Gazprom is also discussing with the Korea Gas Corporation ways to transport gas to South Korea from gas terminals in Sakhalin, Khabarovsk and Vladivostok."

Three international events in November offer a chance for the two presidents to meet on the sidelines -- the Asia-Pacific Economic Cooperation summit in Hawaii, the G-20 summit in Cannes, and the East Asia Summit in Bali.

It would then be natural for them to discuss the gas pipeline project. A visit by President Lee Myung-bak to Russia could also give much more weight to bilateral discussions.

A senior government official said. "I understand that during a meeting at Cheong Wa Dae last weekend, President Lee told GNP Chairman Hong Joon-pyo, 'I think there could be a good result for the Russian gas pipeline project in November.'"

A GNP lawmaker on the National Assembly's Foreign Affairs, Trade and Unification Committee quoted Foreign Minister Kim Sung-hwan as saying a Gazprom official will visit Seoul soon to discuss the laying of gas pipelines with KOGAS.

Kim in turn quoted his Russian counterpart Sergey Lavrov as promising at a bilateral

foreign ministers meeting on Aug. 8 to put the deal through.

Separate talks are underway between South Korea and Russia and between North Korea and Russia. The biggest problem is that there is no direct dialogue between the two Koreas.

A government official on Thursday said, "Seoul-Pyongyang talks hold the key to the gas pipeline project."

The North is asking US$150 million per year as a fee to let the pipeline be built, according to government officials here. The question of transit fees has always caused disputes between gas suppliers and the countries through which pipelines run.

Russia caused a gas shortage in Ukraine and Europe by suspending gas supply in 2009 after conflict with Ukraine over the transit fee. At the time, Russia agreed to pay Ukraine $1.70 per 1,000 cubic meters for every 100 km. Based on this formula, the North can demand up to $170 million per year, given that South Korea can import 10 billion cubic meter of Russian gas annually under a protocol on gas industry cooperation between the two sides from 2008 and assuming the pipeline is about 1,000 km long.

But a senior government official said, "Even if the North and Russia start negotiations right now, it'll take a few years for all parties to reach a final agreement,"

englishnews@chosun.com / Sep. 02, 2011 13:07 KST

UPDATE 1-Russia, China to discuss oil debt -Transneft sourcehttp://in.reuters.com/article/2011/09/01/russia-china-oil-idINL5E7K10ZZ20110901

Thu, Sep 1 2011

* Talks to be held on Sept. 12-15

* Total debt stands at around $100 mln

* Russia hopes for huge gas contract with China (Adds details, background)

MOSCOW, Sept 1 (Reuters) - Russia and China are set for new talks over disputed debt for Russian oil as Moscow struggles to secure lucrative gas contracts with the world's top energy user, a source at Russia's Transneft (TRNF_p.MM: Quote, Profile, Research) told Reuters on Thursday.

Russian oil pipeline monopoly Transneft and Russia's top crude producer Rosneft started pumping oil to China in January via the first stage of the East Siberian-Pacific Ocean (ESPO) pipeline after receiving $25 billion in loans from Beijing.

But Russia and China have been mired in a row over the rate of fees for the deliveries although in May Transneft said China National Petroleum Corp (CNPC) had paid some arrears

The source at Transneft said the new talks over the disputed debts will be held on Sept. 12-15 after the Russian oil pipeline monopoly had said it may bring CNPC to court over the debt.

"Talks will be tough but from what we heard the Chinese do not want to bring the issue to court," he said.

The source added that CNPC's current debt to Transneft stands at $40 million, while putting outstanding arrears to producer Rosneft at "one time and a half more".

Russian gas exporting monopoly Gazprom has also been in talks for several years about natural gas supply to China. Both sides have agreed to start shipments to China in 2015 but they stuck over the pricing issues.

Gazprom said this week that it aims to wrap up the gas pricing talks before the year-end, though it had failed to clinch the deal this summer - the previously mooted deadline. (Reporting By Olesya Astakhova; Writing by Vladimir Soldatkin; Editing by Lidia Kelly and Keiron henderson)

Libya buys 50,000 T wheat from Glencore - tracker

http://in.reuters.com/article/2011/09/01/libya-russia-grains-idINL5E7K11QN20110901

Thu, Sep 1 2011

MOSCOW, Sept 1 (Reuters) - Libya has bought 50,000 tonnes of Russian wheat from international trading house Glencore in two shipments, the head of a company which tracks grain movements said on Thursday.

Glencore's Russian unit the International Grain Co declined to comment.

Igor Vasilyev, the head of Moscow-based Zerno-On-Line (ZOL) internet agency, which monitors grain movements in and out Russia, said the Sea Dream bulker was chartered by Glencore and left the Black Sea port of Novorossiisk for Libya on July 27 with a cargo of 25,000 tonnes of wheat supplied by the Russian state grain trader the United Grain Co.

Another vessel chartered by Glencore, the Al Youssef, sailed with a shipment of 25,000 tonnes of wheat for Libya from Novorossiisk on July 19, Vasilyev said.

Earlier on Thursday, the Sea Dream's ship manager told Reuters it was discharging in the eastern port of Benghazi with a 25,000 tonne cargo of maize. (Reporting by Aleksandras Budrys, writing by Jonathan Saul; editing by James Jukwey)

Kazakhstan has purchased military equipment from Russiahttp://www.rusbiznews.com/news/n1112.html

02.09.2011 — News

SVERDLOVSK REGION.

The Uralvagonzavod Research and Production Corporation has supplied a set of military hardware for the armed forces of the Republic of Kazakhstan. The scope of supply is kept in secret, but the republican army is known to have received T-72B tanks and TOS-1 heavy flamethrower systems.

The representatives of the Press Service of the corporation have informed RusBusinessNews that the shipment also included three tank support fighting vehicles (BMPT). The pilot military project passed the government tests; however, it has not been put into service for the Russian Army yet.

The BMPT vehicle is designed to destroy tanks, infantry combat vehicles, helicopters and low-altitude aircraft. The design of the vehicle includes the upgraded chassis of the T-72 tank. It is equipped with two twin-barreled 30-mm automatic guns, Ataka-T guided weapon, automatic grenade launchers and a machine gun.

09:30 02/09/2011ALL NEWS

Swedish Anna yacht detained in Chukchi Sea for RF border violation

http://www.itar-tass.com/en/c154/216796.html

PETROPAVLOVSK-KAMCHATSKY, September 2 (Itar-Tass) — The Swedish small yacht Anna has been detained in the Chukchi Sea for violation of the Russian border

regime. A decision has been made to expel her out of Russian waters, the press centre of the Northeast Coast Guard department of the Russian Federal Security Service (FSB) told Itar-Tass on Friday.

It specified that on August 28 the yacht whose homeport is Varberg was spotted in the RF territorial sea by the Neva border patrol ship. There are two persons on board the yacht - a Swedish man and a Polish woman. The yacht has no permission to enter Russian waters. The crew explained that this situation occurred because of the vessel’s breakage and difficult weather conditions.

The yacht was escorted to the port of Providence and on September 1 handed over for an investigation over the violation to the RF FSB department for the Chukotka Autonomous Area.

It has been already the second violation of the RF state border regime by the Anna yacht within a month. On August 15 the vessel called at Pevek port for replenishment without going through the necessary customs and border procedures. The crew was fined 4,000 roubles for an administrative offence, and the yacht was expelled from the Russian territorial sea.

At present, after troubleshooting, the violator vessel has left the port of Providence and escorted by the Neva border guard ship has set the course outside the Russian territory.

Russia holds Swedish yacht over Arctic Ocean border violationhttp://www.monstersandcritics.com/news/europe/news/article_1660532.php/Russia-holds-Swedish-yacht-over-Arctic-Ocean-border-violation

Sep 2, 2011, 7:56 GMT

Moscow - Russian naval units detained a Swedish yacht - twice - for sailing into the country's Arctic Ocean territorial waters without informing authorities, according to reports Friday.

The incidents took place in the vicinity of the Bering Strait, where Russia's Far Eastern province Chukhotia faces the US state Alaska.

Russian officials first learned of the vessel's presence in the tightly-controlled border region when the sailboat Anna entered Pevek, a remote fishing town of some 5,000 on Russia's northern coast.

The two-member crew of one Swedish and one Polish national had sailed from the Canadian Arctic Ocean port town of Inuvik along Alaska's entire northern coast and through some of the world's most hostile waters to reach Pevek, said Andrei Orlov, a Russian border troops spokesman.

The pleasure craft appeared in Pervek on August 15 without informing shore authorities, Orlov told the Interfax news agency.

The sailboat's captain was fined the equivalent of 142 dollars and a Russian coastal cutter escorted the sailboat and crew to international waters on August 18.

But a Russian naval patrol intercepted the sailboat again on August 28, as the yacht drifted through Russian-controlled waters in the Bering Sea, in the extreme North Pacific.

The vessel's captain blamed a mechanical failure for the sailboat's second illegal crossing of Russia's sea border.

Repairs by Russian navy sailors put the sailboat into working order and it was escorted to the Bering Sea port of Provideniya, where the Swedish captain received a second citation, Orlov said.

The Russian border troops cutter Neva escorted the sailboat back into international waters on Friday.

The yacht and its crew were exepected to return to Alaska, Orlov said.

Russia Asked Guarantees for Future Claim against Bulgartabachttp://www.novinite.com/view_news.php?id=131731

Industry | September 2, 2011, Friday

The Russian Federation has submitted a request for a guarantee for a future claim against the Bulgarian State-owned cigarette maker Bulgartabac Holding, but the Sofia City Court had not examined it.

The news was reported by the Bulgarian Dnevnik daily, citing their own check of the Court's records, which had further shown the decision had been made on Wednesday.

The Court had not provided information what were the grounds of Russia's claim against the Bulgarian monopoly and if the Federation wanted the freezing of its assets as guarantee.

The rule and the law require that the requests for guarantees for future claims are being kept secret, because the goal is to not let know the other side about the pending trial and that its property could be blocked in order to avoid its concealment.

The Court electronic records do not contain any information why the request of the Russian Federation had not been examined, but the fact the magistrates declined ruling on the request would not stop Russia to ask again for imposing a freeze on properties and shares of Bulgartabac.

In the beginning of August, Russian media informed that thanks to Moscow the procedures to sell Bulgartabac have failed on two occasions and precisely the Russian claims for 50% of the assets of the cigarette monopoly have halted its privatization so far.

It also remains unknown when exactly Russia had submitted the request with the Sofia City Court to freeze Bulgartabac's assets.

Meanwhile Moscow officially confirmed the interest of the government-owned VTB bank in purchasing the Bulgarian company.

On Tuesday, after one day of examining documentation, the Bulgarian Privatization and Post- Privatization Control Agency approved the sale of the State-owned tobacco monopoly Bulgartabac Holding to BT Invest , a firm registered in Austria by VTB bank , property of the Russian government.

The price offered by BT Invest, the sole bidder standing, after several major players withdrew, is EUR 100.1 M with investments of BGN 7 M in the next two years and the commitment to purchase 5 000 metric tons of Bulgarian tobacco a year (about 14% of the crop). The draft contract also includes a clause banning a resell in the next 5 years.

The move triggered strong criticism particularly from functionaries from the opposition Bulgarian Socialist Party, BSP.

Rumen Ovcharov , former Economy Minister in the Stanishev Cabinet, claimed that powerful economic circles in Bulgaria featuring the participation of Prime Minister Boyko Borisov were behind the privatization of cigarette maker Bulgartabac . He and former CEO of Bulgartabac , Socialist MP Korneliya Ninova , stated that the Russian bank VTB was being used only as a cover by the "circles" in Bulgaria , and rejected the allegations that the Russian government was behind the purchase.

The criticism prompted the head of Bulgaria 's Privatization Agency, Emil Karanikolov, to go on defense and back in Parliament the decision made by his institution to approve the deal.

Bulgaria 's Economy and Energy Minister , Traicho Traikov , says he has reservations about the deal and would prefer more market criteria than social commitments while Deputy Prime Minister and Finance Minister , Simeon Djankov , labeled it "succesfull."

Bulgaria 's tobacco industry syndicates have already announced a protest against the sale of Bulgartabac to VTB, scheduled to take place on Friday. Tobacco growers, however, said they will not join the strike since what was most important for them was to have a buyer for their crops.

This is the fifth attempt to sell Bulgartabac Holding in the last 10 years.

Azerbaijani, Dagestani officials hold telephone talkhttp://www.news.az/articles/politics/43541

Fri 02 September 2011 06:15 GMT | 8:15 Local Time

President of Dagestan Magomedsalam Magomedov and first deputy premier of Azerbaijan Yagub Eyyubov have had a telephone conversation lately.

1news.az reports citing Russian mass media, during the talks the sides discussed the problematic issue, related to the migration of the residents of Hrah-Uba and Uryan-Uba villages of the Khachmaz region of Azerbaijan to Russia.

The result of the conversation between the Dagestani president and the first vice premier of Azerbaijan have become the agreement that the residents of Hrah-Uba and Uryan Uba will not be deported up to the moment of adoption of the federal target program of their settlement to Dagestan.

As is known, during the recent meeting with Russian President Dmitriy Medvedev, the Dagestani president appealed with the request to adopt this program on the settlement of residents of Hrah-Uba and Uryan-Uba villages to Dagestan. The appeal of the head of state was fully supported by the Russian president and due instructions were given.

In the years of Soviet power, Dagestan SSR and Azerbaijan SSR carried out mutual transfer of small lands to temporary usage for agricultural purposes. Dagestan has received from Azerbaijan lands for wintering of cattle.

This caused the formation of permanent pasturing stops and dwellings appeared. This caused the appearance of residential points Hrah-Uba and Uryan-Uba. The term of the USSR decision of 1954 about exchange of lands expired completely in 2004.

1news.az

02 September 2011, 12:29

Keys from Nice cathedral not likely to be transferred to Russian Church soon

http://www.interfax-religion.com/?act=news&div=8697

Paris, September 2, Interfax - The Constantinople Patriarchate delays the process of factual transfer of St. Nicholas Cathedral in Nice to the Russian Orthodox Church as this church has been handed over for indefinite rent-free tenure.

As was reported, the French court confirmed Russia's ownership rights for the cathedral on May 19. The Russian state decided to hand the church over to the Moscow Patriarchate which has recently appointed the first two clerics with the instructions to obtain the keys and documents and to put an end to the collection of pay for visits to the cathedral.

The Korsun Diocese to which French parishes of the Moscow Patriarchate are subordinated said in its statement this week that the Nice Orthodox religious association (ACOR) that judicially disputed Russia's claim to the cathedral "can in no way be equated with the parish of St. Nicholas' Cathedral and the Orthodox community of the region."

Meanwhile, head of Russian Parishes Exarchate in Western Europe (subordinate to Constantinople - IF) Archbishop Gabriel at his Wednesday meeting with Bishop Nestor of Korsun gave to understand that the Moscow Patriarchate will have to solve the questions of obtaining keys and abolishing entrance fee directly with ACOR.

"Archbishop Gabriel said he was incompetent in settling the questions. According to him, the Exarchate consists of self-governed associations and thus the decision should be taken at the level of Nice Orthodox religious association (ACOR)," the Korsun Diocese says in its statement handed over to <i<interfax-religion< i="">.

The meeting has not had any results in settling canonical questions as Archbishop Gabriel is expecting a letter from the Constantinople Patriarchate and until he receives it he does not believe it possible to take any actions.

Archbishop Gabriel also wished that the new meeting took place in extended composition among representatives of the Exarchate Council and the Korsun Diocese.

"The Korsun Diocese regrets that the meeting initially planned on August 23 was postponed for a week without any explanations, but did not bring any results and negations are delayed again," the statement says. </i<interfax-religion<>

FSB opens coastal ports for fishermenhttp://www.barentsobserver.com/fsb-opens-coastal-ports-for-fishermen.4954807-116321.html

2011-09-02 Fishermen in the Murmansk region can now deliver their catch directly to ports in Teriberka and Liinakhamari without going to Murmansk for border and customs control.

The Federal Security Service’s Border Guard Direction in Murmansk Oblast has sent out a decree stating that all fishing vessels operating in Russian Economic Zone are allowed to go directly to the coastal settlements of Teriberka and Liinakhamari with their catch, Fishonline.ru reports.

This is especially beneficial for Teriberka, where a small fish processing factory is the cornerstone company, employing nearly half the population.

In a meeting with First Deputy Prime Minister Viktor Zubkov in January, Murmansk Oblast Governor Dmitry Dmitriyenko raised the question about opening border check-points for fishing vessels in Teriberka and Liinakhamari, as BarentsObserver reported. Zubkov agreed that this would be an important measure for supporting the local fishery sector. 

Russian air carrier denies guilt in fur seals' deathhttp://en.rian.ru/russia/20110902/166370567.html

10:45 02/09/2011

VLADIVOSTOK, September 2 (RIA Novosti)

Russian airlines Vladivostok Avia said it was not guilty in the death of 12 out of 20 fur seals during a flight to a dolphinarium in Russia's Far Eastern city of Vladivostok, the company's press service said on Friday.

Transportation prosecutors began a probe into the death of 12 fur seals on board a Vladivostok-bound plane. The animals died during transit on Monday.

According to the preliminary information, the seals, which were being transported from Sakhalin Island, were affected by high temperatures in the plane's cargo bay.

"The air carrier officially announces that the actual cause of the fur seals' deaths remains to be substantiated," the carrier said in a statement.

The temperature in the cargo bay was about 15-20 degrees Celsius (59-68 degrees Fahrenheit). In line with these circumstances it is too early to make a conclusion about the cause of the seals' death, the carrier said.

Veterinarians have ruled out any diseases the seals may have had.

An expert from the Oceanological Institute however said the seals could have suffocated each other as the cargo bay was too small for the 20 adult mammals.

Aerogruz, the company responsible for carrying the animals, cited stress as the main reason for the seals' deaths.

08:45 02/09/2011ALL NEWS

Collapse at Vladivostok suburb building site kills 1, injures 4

http://www.itar-tass.com/en/c154/216759.html

VLADIVOSTOK, September 2 (Itar-Tass) — One person was killed and four injured in a collapse at a water pumping station under construction in a Vladivostok suburb. The press service of the Russian Investigative Committee’s investigation department for the Primorsky Territory told Itar-Tass that the incident occurred on Friday morning at about 05:00 a.m. (22:00 MSK) on September 1.

A ceiling collapsed during concreting works at the station. As a result, four people were injured and hospitalised, and one man was found under the rubble with no signs of life.

Law enforcement agencies have begun pre-investigation checks. Investigators have been working at the scene examining the incident site, questioning witnesses; the construction site’s technical documentation has been confiscated.

Defense Ministry Cancels $1Bln Worth of Arms Contracts 02 September 2011By Nikolaus von Twickel

The Defense Ministry is canceling arms contracts worth $1 billion with producers who failed to fulfill their obligations, Defense Minister Anatoly Serdyukov said Thursday.

"We are restructuring toward other needs — mainly high-precision arms, aviation and anti-aircraft weapons — because some of the suppliers for certain reasons cannot provide their products," Serdyukov told Itar-Tass, adding that the cancellations amount to 30 billion rubles.

But he was adamant that the ministry has fulfilled all procurement orders save one with United Shipbuilding Company, thus meeting a deadline set by Prime Minister Vladimir Putin.

"All the agreed components have gone through. The signings happened yesterday and the day before yesterday," Serdyukov said.

Putin demanded during an Aug. 26 meeting with Deputy Prime Minister Igor Sechin that all outstanding defense contracts be met by Aug. 31.

Serdyukov's comments came as Kommersant reported that the Defense Ministry had missed Putin's deadline.

As of Wednesday, key contracts with United Aircraft Company, United Shipbuilding Company and the Moscow Institute of Thermal Technology remained unsigned, the newspaper reported Thursday, quoting unidentified ministry and industry officials.

The ministry has accused the domestic defense industry of providing overpriced and poor-quality arms. The complaints even led President Dmitry Medvedev to publicly urge the ministry to buy more weapons abroad.

Industry officials have countered the criticism by accusing the ministry of mishandling its weapons procurement plan.

Serdyukov spoke Thursday as Medvedev appointed Alexander Sukhorukov as new first deputy defense minister overseeing procurement.

Sukhorukov, who had headed the Federal Arms Procurement Agency, replaces Vladimir Popovkin, who was appointed head of the Federal Space Agency in May.

Analysts say the lack of a successor for Popovkin resulted in delays in signing defense contracts.

The government has set aside more than 1.5 trillion rubles ($53 billion) for national defense in its 2011 budget.

Chief Military Prosecutor Sergei Fridinsky said this spring that a fifth of state defense spending is stolen every year by corrupt officials, dishonest generals and crooked contractors.

Read more: http://www.themoscowtimes.com/news/article/defense-ministry-cancels-1bln-worth-of-arms-contracts/443088.html#ixzz1WmAZt6QD The Moscow Times

September 02, 2011 10:50

Moscow press review for September 2, 2011http://www.interfax.com/newsinf.asp?id=270158

MOSCOW. Sept 2 (Interfax) - The following is a digest of Moscow newspapers published on September 2. Interfax does not accept liability for information in these stories.

VEDOMOSTI

RusHydro (RTS: HYDR) wants major consumers to pay more for power reserves. The real payments for power reserves in Russia are much higher than abroad, and consumers are paying too much for stable supplies, a UC Rusal spokesperson says. Moreover, major power enterprises having steady consumption patterns actually make the system more reliable and should be rewarded for this, while RusHydro's proposal would increase the burden exactly on this category, he said. ('Reserve To Grow In Price')

Gazprom's subsidiaries lost an equivalent of 28 billion rubles in 2009, which is nearly 4% of the company's investment program. This sum includes "unlawful expenditures and losses of money and material values," which the gas company's internal auditing service has uncovered in its subsidiaries. The auditors did not specify how this could have happened and what subsidiaries are to blame. The document says that Gazprom (RTS: GAZP) has not left the irregularities unnoticed: "a number of employees have been held materially and disciplinarily liable." Measures have been taken to eliminate irregularities and prevent them in the future, get back assets and recover "overpaid sums," and "work involving claims and lawsuits has been intensified," the report says. ('How To Waste Billions')

The Ukrainian state-owned energy provider Naftogaz will be reorganized. The Ukrainian government plans to separate a gas producing company from it, which will offer its shares on a stock exchange and draw investments, Prime Minister Mykola Azarov said on Thursday. The premier did not specify when this is going to happen and what stake

investors could acquire, saying only that the state will retain a controlling stake in the company. Azarov suggested also that an IPO could help the company raise from $5 billion to $10 billion, which would enable Ukraine "to shift expenditures from the budget onto investors." Analysts are of the view that Gazprom does not need this asset for such money, but politicians may have a different opinion. ('Sale By Installments')

The separation of the business between Andrei Melnichenko and Sergei Popov is nearing completion. Melnichenko has bought part of SUEK from his partner, thus becoming a major owner of the coal company. The deal took place on August 31, a SUEK spokesperson told Vedomosti. Before this, Melnichenko and Popov held equal shares in the company; now Melnichenko has gained control of Russia's major coal producer, while Popov is currently holding a non-blocking stake. The SUEK representative did not specify the stake's size and the deal's worth. A source close to SUEK said Melnichenko bought Donalink shares from Popov, and now his share in this company is over 70%. ('Melnichenko Gathers Coal', see also Kommersant, page 8, 'Andrei Melnichenko Takes Coal Under Control')

WhoTrades Inc. a U.S. division of the Russian retail broker Finam, has become a full member of NASDAQ, Finam President Vladislav Kochetkov said. In addition to providing Russian clients with direct access to U.S. securities, the company will also start working with U.S. clients, whom Finam plans to attract by its low tariffs. ('Finam Crack Opens America')

Fiat will start distributing and servicing all its cars in Russia instead of the Sollers Group (RTS: SVAV) on January 1, 2012 under an agreement signed between the two companies, Sollers said in a statement. Not only will Fiat be selling its cars in Russia, but it will also supply spare parts and provide guarantee services to Fiat cars to be sold by Sollers before the end of 2011. ('Fiat Takes Up Wheel')

Boris Titov, a businessman and the chairman of the NGO Business Russia, has become the sole owner of the Abrau Durso winery. The businessman's organizations have bought 42% in the company from a territorial state unitary enterprise with the same name for 500 million rubles. ('Titov Buys More Of Abrau Durso')

KOMMERSANT

Rosneft (RTS: ROSN) may acquire access to financial flows of all Russian energy companies. Rosneft's subsidiary bank, the All-Russia Bank of Regional Development (VBRR), whose President Grigory Kurtser recently became board chairman of the Inter RAO UES (RTS: IRAO) instead of Deputy Primer Minister Igor Sechin, plans to become the sole payment center for the Russian energy sector. The matter so far implies primarily payments on the wholesale electricity market, whose annual turnover averages 1 trillion rubles. Until lately, this money has passed through Alfa Bank (RTS: ALFB). (Page 1, 'Rosneft Takes Energy Sector Into Account')

Gazprom Neft (RTS: SIBN) has started consolidating its business in the Orenburg region by acquiring another asset there, the High Technology Center, the holder of a license to develop the Tsarichanskoye mineral field, whose oil deposits have been estimated at 25 million tonnes. While this project cannot be considered large in itself, the company is to acquire the license to develop the Orenburg gas condensate field containing nearly 100 million tonnes of oil from Gazprom in mid-September. (Page 9, 'Gazprom Neft Will Overflow in Orenburg Region')

Russian Press at a Glance, Friday, September 2, 2011http://en.rian.ru/papers/20110902/166368763.html

08:51 02/09/2011

POLITICS

About 69% of Russians support the idea of reinstating elections of lawmakers to the upper chamber of the Russian parliament, the Federation Council. (Kommersant)

The political instability in Russia caused by secrecy surrounding the choice of candidates from the United Russia party (Medvedev or Putin) for the upcoming presidential run creates serious problems for Russian economy. (Vedomosti) 

The future lower house of the Russian parliament will be shared by three major parties and two tiny factions. The leading United Russia expects nationalists to support its plan to dominate the State Duma after elections in December. (Vedomosti)

ECONOMY & BUSINESS

Russia’s energy giant Gazprom lost or illegally spent 28 billion rubles (about $1 billion) in 2009, the Audit Chamber said. (Vedomosti)

As the death toll rises in Syria's Arab Spring and President Bashar Assad's regime becomes increasingly isolated on the world stage, Russian companies in Syria are losing out financially. (The Moscow Times)

The VBRR bank controlled by Rosneft oil company may become the billing center for all Russian energy companies taking over a 1-trillion ruble business from Alfa-bank. (Kommersant)

Investigators have finished searching BP's Moscow office following a claim from TNK-BP's minority shareholders who cited a $3 billion loss from a failed Rosneft-BP share

swap deal. (Kommersant)

Italian Fiat automaker announced plans to take control of sales of its cars in Russia. Experts doubt the success of this move. (Vedomosti)

WORLD

Russian President Dmitry Medvedev will discuss the strengthening of Russia’s military presence in Central Asia and the Afghan peace process at the four-nation summit in Tajikistan. (Vedomosti)

Russia recognized the Libyan National Transitional Council (NTC) as the only legitimate power in the country a few hours prior to the opening of an international conference of "friends of Libya" in the hope to safeguard multi-billion contracts concluded under the Gaddafi regime. (Moscow News)

The world community will regret helping the Libyan rebels to oust Muammar Gaddafi because many rebel leaders have strong ties with al Qaeda . (Rossiiskaya Gazeta)

The West still considers Russia as a potential threat despite the announced “reset” of relations, a new set of U.S. diplomatic documents revealed by WikiLeaks indicates. (Kommersant)

DEFENSE

Despite the recent reassurances by Defense Minister Anatoly Serdyukov, the ministry failed to conclude $1-billion worth of contracts with defense industry firms under the state defense order in 2011 by the deadline set by the Russian leadership. (Kommersant)   

Encouraged by the recent success in testing of the previously ill-fated Bulava ballistic missile, Russian Defense Minister Anatoly Serdyukov said the sea-based missile could not only be commissioned but also put on combat duty aboard the Yury Dolgoruky (Borey class) strategic submarine. (Rossiiskaya Gazeta)

SOCIETY

Russia marked on Thursday the seventh anniversary of the start of the Beslan school siege, the second deadliest terrorist attack outside of the Middle East in modern times. How well the three-day siege was remembered, which ended when special forces stormed the building, claiming the lives of 334 people, more than half of them children. (Moscow News, Rossiiskaya Gazeta)

Moscow authorities will spend a record 220 million rubles ($7.6 mln) on festivities dedicated to the City Day. The celebrations will be held for the first time on Red Square. (Kommersant)

Russian tourists have spent over $5.8 billion during foreign vacations in 2010 by paying with Visa credit card alone. This is 36% more than last year. (Izvestia)

00:40 02/09/2011ALL NEWS

Moscow Mayor says ready to top United Russia electoral list

http://www.itar-tass.com/en/c154/216635.html

MOSCOW, September 2 (Itar-Tass) – Moscow mayor Sergei Sobyanin said Thursday is he prepared to top the Moscow City electoral list of the United Russia Party at the December 4 election to the State Duma, the lower house of Russia’s federal parliament.

“If the voting in the election proves favorable for United Russia, I’ll consider it then as people’s support for me personally and for our plans to develop this city,” Sobyanin told Rossiya’24 news channel.

In August, he got 6,678 votes and became the leader of people’s primary voting for Moscow-nominated candidates to United Russia’s federal list.

Russia's Milner one of most influentialhttp://english.ruvr.ru/2011/09/02/55534952.html

Sep 2, 2011 03:15 Moscow Time

Russian businessman Yuri Milner joined the list of most influential people in the world in the annual ranking published by the influential magazine "Vanity Fair," the co-owner of the company Mail.ru and Digital Sky Technologies came in the 23rd place.

The leader of the list has been recognized as the founder of the social network "Facebook" Mark Zuckerberg.

He is the youngest of those who has ever led the list.

The first ten places in the rankings are occupied mostly by representatives of the technology industry and the Internet.

Disagreement Stymies State Purchasing Reform 02 September 2011Vedomosti

State purchasing reform is being delayed again because of interagency conflict. Now the government will try to make a proposal by Nov. 1, but the reform is unlikely to be implemented before the presidential election.

The government was supposed to present to President Dmitry Medvedev on Thursday a proposal for reforming the state purchasing system, including the creation of the Federal Contracts System.

But, according to two officials who spoke to Vedomosti, the Economic Development Ministry asked for a deadline extension until Nov. 1. A government source said the Kremlin agreed to extend the due date because of the seriousness of the disagreement.

Medvedev initiated the reform last autumn, making proposals due by April 1 for the Federal Contracts System, meant to combine planning, implementing and supervising state purchases. Only the implementation of state orders is subject to legislative control now.

The government was unable to agree on a proposal by the first deadline. The Economic Development Ministry wanted to replace current legislation with a new law on the Federal Contracts System, while the Federal Anti-Monopoly Service and Finance Ministry wanted to revise the current law and draft a new law on the contracts system. Control over the contracts system was also a hot issue. State purchasing is now under the control of the Finance Ministry, but the Economic Development Ministry created a state order department in April.

There are also differences of opinion about how to place the state order. The economy ministry wants to free officials' hands by reinstituting pre-qualification and adding a two-stage closed competition and even competitive negotiations. Those changes are proposed only for the largest orders, such as for construction and medicines. The anti-monopoly service is willing only to relax requirements for scientific orders.

Experts are as divided as politicians over the issue, said Ilya Sokolov, co-chairman of the Federal Contracts System group in the Strategy 2020 project. The main issue is how much freedom to allow officials, he said noting that Russia has a very high rate of competitive purchasing (55 percent) compared with developed countries and a bureaucracy of a different quality.

Read more: http://www.themoscowtimes.com/business/article/disagreement-stymies-

state-purchasing-reform/443057.html#ixzz1WmBV40fh The Moscow Times

Russia | 02.09.2011

Moscow's 'brick revolution' hits the skids http://www.dw-world.de/dw/article/0,,15359354,00.html

Muscovites have been stumbling over piles of bricks for months as the Russian capital's asphalt sidewalks are replaced. But Mayor Sergey Sobyanin's pet project is taking too long and some suspect corruption is involved. 

Many Russians breathe a sigh of relief when August has come and gone, as it hasn't usually been the best month for the country.

In 1991, the month saw a coup attempt against then President Boris Yeltsin. In 1998, August saw the default of the ruble, and in 2000 the Kursk submarine sank, claiming the lives of 118 sailors. And last year, a heat wave in August sparked fires in peat bogs and forests, devastating vast swaths of land and choking the capital with smoke.

This year, Muscovites have another reason to be relieved that September has arrived. With the start of the new school year, sidewalk reconstruction in Moscow has been halted, with only a third of the work completed. Since May, the asphalt-clad pavements had been torn up and replaced with brick, around the clock.

It was the big summer project of Moscow Mayor Sergey Sobyanin, who said he wanted to give the capital a more European face.

Running out of time

Until now, most sidewalks in Russian cities were covered in asphalt. In his first year in office, Sobyanin wants to leave his mark on Moscow by following the tradition of his predecessor Yuri Luzhkov, who adorned the city with buildings and statues in his favorite architectural style - a kind of neo-Soviet gingerbread.

Last autumn, Luzhkov was ousted after 18 years as mayor in an obscure power struggle and Sobyanin, who is known to be close to Vladimir Putin, was put in charge of the Russian capital.

Like his predecessor, who was famous for his autocratic rule, Sobyanin made the decision to spend 100 million euros ($143 million) on the sidewalk facelift without consulting the city's parliament or any of the committees.

Mixed feelings

The result is getting a mixed reception from Muscovites.

"Of course it costs a lot of money, but at least there will be a bit less money laundering then when asphalt is used," says Anastasia, a tax adviser, who is walking along one of the new brick pavements close to the Kremlin.

"That was the only reason it was replaced every year. But walking in high heels on these bricks is very difficult - you get stuck, they break. However, on the other hand I heard that the bricks will be robust," she adds.

The Association of the Disabled in Russia has also slammed the bricks. They say Moscow, which is already a very difficult city for people in wheelchairs, will be even less accessible with the new sidewalks.

Sobyanin, however, points out that bricks don't just look better and more European. He insists they're also healthier and release fewer harmful emissions in the heat than tarmac.

But, according to Alexei Mukhin, an analyst at the Center for Political Information in Moscow, many people in Moscow think Sobyanin loves bricks for another reason altogether.

"There is the persistent rumor that Sobyanin's wife is affiliated with the main contractor responsible for the paving. But no one can prove it. So far all we can say is that Sobyanin and his wife have to examine their conscience," said Mukhin.

"It's no secret that when Sobyanin was governor of Tyumen, he [also] changed all the asphalt to bricks," he added.

However, that rumor could just be the result of a political campaign launched against Sobyanin by opponents in Tyumen, an important industrial hub in Siberia. That, at least, is according to the opposition newspaper Novaya Gazeta, a paper not generally known to be overly gentle in its treatment of those in power.

Most Muscovites don't believe Sobyanin's claims that his wife is just a kindergarten teacher. She reminds them of Luzkhov's wife, who owned a construction firm that was given numerous contracts by the city's administration.

Sobyanin has reason to fear that his summer project has failed, as supply problems and the slow and inefficient work of those paving the roads meant only one third of the planned 4 million square meters (1.54 million square miles) has been completed.

But Sobyanin's "brick revolution" is scheduled to continue in spring, if he doesn't have a change of heart after all the trouble the bricks have already caused him.

Author: Mareike Aden, Moscow / ng Editor: Martin Kuebler

They do what we allow them to dohttp://rt.com/politics/press/rossijskaya-gazeta/chinese-money-local-migration/en/

Published: 2 September, 2011, 05:40Edited: 2 September, 2011, 05:40

Russian officials are unable to refuse a 150,000-ruble bribe to give a Chinese citizen legal status Vyacheslav Postavnin, president of the 21st Century Migration Foundation

Chinese migration is a unique phenomenon against the background of immigration from the countries of the CIS. How do they differ? The difference is that the Chinese don’t simply come here; they come here with colossal sums of money and goods. And, our local authorities are unable to refuse these enormous amounts of money.   

Today, in order to obtain a legal status in Russia, an immigrant from the CIS needs about 15,000-18,000 rubles, while a Chinese immigrant gives a bribe of 150,000. Feel the difference? I’m not trying to say that the Chinese are some sort of an enemy, or monsters. No. They have an amazing ability to take into account all of our special qualities. They play by the rules that exist here. And they play well. They know who should be bribed and how much money should be offered. And they make offers, even higher than others. They do what we allow them to do. They come to a place that interests them, establish contacts with law enforcement agencies, and always with the local authorities. They buy the necessary production and storage facilities, prepare the infrastructure, and then come the workers. They went through the entire country with these methods, and are already in Ukraine, where they are doing the same thing.    

What is immigration in the Far East? They use their phones there, and all have driver’s licenses. They live quite autonomously. And we are outraged: they’re logging. But we are allowing them to! They operate exactly how we allow them to. They’re not taking things by force.   

The second issue – Russia’s Far East could hardly make it without Chinese migration. We, for example have tried laying the ESPO pipeline by our ourselves, but quickly realized that it will be complicated and expensive. And the Chinese – are a highly-productive and a well-organized force. This becomes especially evident in construction of technically complex projects.   

The third aspect is the agricultural sector – horticulture. That’s also something we cannot compare. At one time, I had served as the co-chairman of the Russian-Chinese Immigration Commission, and we were holding negotiations about organizational recruitment. They are ready to send immigrants here in a structured manner, but that is simply a matter of doing it. Issues concerning organized migration and control are up to our migration, local, and regional authorities.     In fact, I would say that the Chinese form a great work force. All of the roads in the US were once built by the Chinese. However, 40,000 Chinese had lost their lives to this hard labor. This option is, of course, also not suitable for us. But the US has benefited from this, while inhumanely using these hard workers and the unpretentiousness of the Chinese labor force. I am not urging to act the same, but I do want to say that it is a good resource. It simply needs to be applied where necessary – not to the detriment of the national labor market, but only positively, for the development of local infrastructure.    

The law permits us to restrict access for the Chinese altogether. A zero quota could be introduced for the Chinese in the Far East. The law permits all. It is a question of mechanics. If the Chinese are paying 150,000 rubles, then there is someone out there who is accepting them. To read about how the Chinese work in the Russian regions, go to page 12.

Electronic Corruptionhttp://russiaprofile.org/business/44437.html

Corruption Scuppers Another Government Project Aimed at Modernizing Russia

By Tai Adelaja Russia Profile 09/01/2011

To understand why the Kremlin’s E-government efforts failed to gain traction, one needs to look no further than the saga of corruption and embezzlement plaguing one of Russia's revered companies. Some 300 million rubles ($10 million) have been misappropriated from a Communications and Press Ministry contract, the Prosecutor General's Office said Tuesday. The money was funneled off via overpriced soft and hardware purchases as part of a contract with the Rostelecom long-distance monopoly, prosecutors said in a statement.

Prosecutors said they first suspected fraud after reviewing a contractual agreement worth over two billion rubles ($64 million) concluded between the Ministry of Communications

and state-owned telecoms giant Rostelecom, the main contractor for the Electronic Russia project. The prosecutors want the Interior Ministry to decide whether or not to open a case in what they called “large-scale fraud,” Vedomosti reported. The two-billion ruble contract is part of Electronic Russia, a multi-billion ruble federal target program to boost E-government services.

Launched in 2002 under then-President Vladimir Putin, Electronic Russia was touted as a way to move public services online, overcome the digital divide between the regions and improve the computer skills of government officials. Russian President Dmitry Medvedev has since redoubled efforts on the project, promising last year that the Russian government must go digital by 2015. His initiatives have ranged from introducing a new electronic signature and the planned introduction of universal electronic ID cards to issuing guidelines on the conduct of electronic judicial proceedings.

But in what seems like an admission of defeat, president Medvedev told a meeting of regional governors last year that efforts to transition to digitized services in 2010 and 2011 have gotten off to a slow start. “Only three ministries have introduced systems of electronic document exchange: the Ministry of Economic Development, the Ministry of Agriculture and the Ministry of Telecommunications. This is much too slow. We need to move faster on this one,” Medvedev said.

The cases now being pushed by prosecutors illustrate the depth of the president’s problems. The Russian government recently allotted two billion rubles ($64 million) to create an infrastructure for the E-government program through the end of 2010. But the cost of hardware and software acquired by the Ministry of Communications through Rostelecom, the lead contractor, was inflated by nearly 270 million rubles ($9 million) through a wide array of middlemen firms, prosecutors alleged. “The Ministry of Communications paid 653 million rubles ($21 million) for equipment that cost no more than 383 million rubles ($12 million),” the Prosecutor General's Office said in a statement.

Prosecutors also found that "one of the main suppliers of equipment" made "questionable transactions” by transferring 150 million rubles ($5.1 million) to offshore accounts of unspecified companies. In addition, prosecutors said they found evidence of a conflict of interest between people working in Rostelecom and an unnamed commercial entity, which procured equipment for the Electronic Russia program, Vedomosti reported. Prosecutors also alleged that the ten million rubles ($345,000), sent by the Ministry of Communications to Rostelecom for the conduct of pilot research into the creation of techno-parks, were stolen. The company concerned did not even pretend to start work on the project, prosecutors said.

A spokesperson for Rostelecom, who claimed anonymity in line with the company’s rules, said that the company would clear the air after carefully studying the allegations. He maintained, however, that the Electronic Russia program is on track, and previous checks by Interior Ministry officials have confirmed that the company violated no rules.

In line with a directive signed by Prime Minister Vladimir Putin in August of 2009, the state-controlled telecoms giant Rostelecom was selected as the only telecommunications company permitted to create an infrastructure for the country's electronic government service. In an indication of the importance the government attaches to the program, a special department – the Department of Information Technology and Communications – was created in the White House, with Konstantin Noskov as its head. State telecoms operator Rostelecom also created the post of director of the Electronic Government project and plucked Valery Zubakha, the former deputy head of information management at City Hall, to head it. Both Noskov and Zubakha were dismissed in March of this year without a plausible explanation, but experts cited by Vedomosti saw a link between their dismissal and the failure of the federal target program.

In February of this year, Russia's Audit Chamber said it analyzed how the unified state policy in the sphere of information technology was being implemented. The auditors said they did not like what they saw. Of the 180 billion rubles ($6.2 billion) allocated for the program between 2005 and 2010, the auditors said 1.4 billion rubles ($48.2 million) “were inefficiently used” – a Russian euphemism for misappropriation or embezzlement. A closer inspection of the activities of various organizations involved in the project shows that “development and implementation of software solutions for government agencies within the framework of Electronic Russia are few and far between,” the Chamber's Auditor Alexander Piskunov said. The auditors also found that communications protocols and message formats were not standardized in the software procured and implemented for public use under the program. This, the auditors said, has led to incompatibility of software and hardware solutions and made communications between different government systems impossible.

Billions of Dollars of Russian Business Suffers Along With Syria 02 September 2011By Howard Amos

As the death toll rises in Syria's Arab Spring and the regime of President Bashar Assad becomes increasingly isolated on the world stage, Russian companies in Syria are losing out financially.

As well as lucrative arms contracts, Russian firms have a substantial presence in the Syrian infrastructure, energy and tourism industries. And with exports to Syria worth $1.1 billion in 2010 and investment in the country valued at $19.4 billion in 2009, there is a lot at stake.

"All our deliveries to Syria have come to a standstill," said Anton Kudratyev, director of sales with Uralmash's Drilling Equipment Holding, a company that has exported to Syria for 14 years.

"One has to be physically present in this market and be able to talk to people — and because of the current security situation we have been deprived of this possibility."

According to United Nations estimates, more than 2,200 demonstrators have been killed in the protest movement that has swelled against Assad since March. The Syrian government, which does not allow journalists into the country, has reportedly used snipers, tanks and heavy artillery against protesters.

Sergei Makarov,  director of Stroitransgaz — a gas facility construction business that has the largest Russian operation in Syria — told The Moscow Times that despite the violence their work was proceeding without significant interruptions.

But he added that the company had experienced problems with European suppliers who failed to deliver the equipment they were obligated to provide, transport companies who raised their tariffs and breakdowns in the banking sector.

Engaged in projects worth $1.1 billion, Stroitransgaz has 80 Russian staff on the ground in Syria. It is building a natural gas processing plant 200 kilometers east of Homs in the Al-Raqqa region and is involved in technical support for the Arab Gas Pipeline and another natural gas processing plant in the center of the country.

Makarov added that the company had taken extra security measures for the safety of its employees, saying, "If Russia announces an evacuation of its citizens, we are ready."

Other Russian businesses, however, said that the protests sweeping Syria had little effect on their work. Nikolai Grishenko, director of Sovintervod, a water engineering company, said he was in daily contact with his 20-man team in Aleppo, which has experienced no disruption.

Sovintervod has been working in Syria for more than 50 years. Grishenko added that Assad was a "decent man" and compared today's protests to the 1980s civil unrest in Syria, which was successfully crushed by the government at the cost of up to 25,000 dead and wounded civilians.

Tatarstan-based oil producer Tatneft is the most significant Russian energy firm in Syria. The company began pumping Syrian oil in April 2010 through a joint venture with Syria's national oil company and said in January that it would spend $12.8 million drilling exploratory wells near the Iraqi border. Tatneft representatives did not respond to requests for comment.

While Russian companies already on the ground in Syria have been suffering to varying degrees, firms with expansion plans in the region have been put off by the recent upheaval.

In February, state-run utility giant Inter RAO announced a $500 million plan to expand in countries across the Middle East, including Syria. But a spokesman for the company told The Moscow Times Tuesday that Inter RAO currently had no links with Syria and no intention of working there.

The current inconveniences to Russian businesses pale in comparison to the chaos that would result if the Assad government was forced violently from power.

According to data from the Moscow Defense Brief, the capital has more than $4 billion in active arms contracts with Syria, including MiG-29 fighters, Pantsir surface-to-air missiles, artillery systems and anti-tank weaponry. Syria also hosts Russia's only naval base in the Mediterranean, at Tartus.

Kremlin diplomats are determined to avoid a replay of the Libyan scenario in which a NATO-led force facilitated the toppling of Moammar Gadhafi. It will be up to the new government in Libya to decide whether it honors the estimated $10 billion worth of business contracts Russia had with Gadhafi's regime.

Though it has condemned the violence against demonstrators in Syria, Russia is also resisting international calls for new economic sanctions by the UN.

But efforts to ratchet up the external pressure on the Assad government are likely to continue regardless. A European Union ban on an annual $3 billion of Syrian oil exports to Europe, from which Assad's government derives about one-third of its revenue, is expected to be in place by this weekend. The United States already has an oil embargo and investment ban in place.

Meanwhile, protests are continuing on the Syrian streets. Reports of violence with at least seven fatalities in Damascus, Deraa and Al-Harra accompanied the festival of Eid al-Fitr Tuesday.

"The main question at the moment is whether the current leadership will hold out or not," said Uralmash's Kudryatev.

"If they don't … it could lead to the collapse of the country accompanied by all sorts of lawlessness."

Read more: http://www.themoscowtimes.com/business/article/billions-of-dollars-of-russian-business-suffers-along-with-syria/443078.html#ixzz1WmAhukUx The Moscow Times

Last Updated: Fri Sep 02, 2011 06:55 am (KSA) 03:55 am (GMT)

Hassan Haidar: Moscow concerned … about the armyhttp://english.alarabiya.net/views/2011/09/02/165049.html

Friday, 02 September 2011

By Hassan Haidar

The visit of Russian Envoy Bogdanov to Damascus to convey Medvedev’s urgent request to see Bashar al-Assad immediately pulling out the military units from the Syrian cities, leading them back to the barracks, discontinuing the violence against the demonstrators and setting a timetable for the reforms, coincided with the escalation of the divisions within the ranks of the Syrian army, although this defection is still limited and rarely includes high-ranking officers. Still, they are enough to concern the Russian ally, whose military experts deployed on the Syrian soil are conveying a pessimistic image of the situation and warning against the expansion of the disgruntlement and the military rebellion which could quickly turn into a civil confrontation.

The Russian message did not mark a change in Moscow’s quasi-absolute support of al-Assad. But in addition to it being an attempt to eliminate the weak points affecting its defense of the Syrian president ─ especially in international forums ─ and lift the embarrassment whenever it refuses to condemn the killings and arrests he is undertaking, it relays Russia’s increasing concerns toward the excessive use of the armed forces, knowing that the continuation of the Russians’ presence and influence in this country are linked to these forces’ unity, stability and armament.

In reality, the mobile military campaign carried out by the Syrian army to deter the opposition’s actions in the main cities and in the countryside, is revealing its weak points and exposing it to several possibilities. At this level, many cases of defection were registered during the past week in Deir ez-Zor, Idlib, the Rif, Homs and on the outskirts of Damascus, at a time when the nucleus of the “free officers” organization started surfacing for the first time ever. Other cases of defection had been registered at the beginning of the uprising but were immediately nipped in the bud. Those behind them were liquidated and the “armed men” were said to have been responsible for this liquidation, just as it happened in Daraa.

Although the regime has so far chosen to rely on selected units whose loyalty is guaranteed to carry out the major military operations, it cannot continue deploying them and moving them between the regions once it becomes clear that the orders issued to them to shoot the unarmed demonstrators are threatening their unity and increasing the possibility of the elements’ refusal to move forward when they figure out they are not fighting “armed gangs.”

As for the use of the Syrian army to carry out internal repression, it is a double-edged

sword. This is firstly due to the fact that this army’s permanent deployment – when there are no demonstrations ─ means a daily contact with the people, i.e. their families, which will alleviate the impact of ideological mobilization and the one based on sloganeering to which they are constantly subjected when in the barracks. This is especially true when it turns out that the “orders” issued to them to deter “the terrorists” do not rely on accurate information, thus pushing toward additional defections and rebellions. It is secondly due to the fact that while the overreliance on the army to protect the regime and prevent its collapse has been fruitful, it will mean that the political institution might later on find itself in a weak position vis-à-vis the armed forces after it used to lead them. In other words, if the army saves the regime from the people now, who will save the regime from the army later on? This features the possibility of seeing Syria return to the times of consecutive military coups that were witnessed in the fifties and sixties.

And while the Syrian regime is wagering on time to muzzle the opposition and stop the protests, the opposition is also wagering on that same factor to induce change at the level of the military institution’s behavior, thus leading to its neutralization, or at the very least to the retreat of its involvement in the defense of the regime, and give it options other than the blind upholding of the one-party theory.

(The writer is a columnist for Dar Al Hayat newspaper where this article was first printed on Sept. 1, 2011.)

For Russia, New Mideast Will Be a Tough Arms Market

http://www.themedialine.org/news/news_detail.asp?NewsID=33136

Written by David RosenbergPublished Thursday, September 01, 2011

Moscow makes first-ever to sale to Bahrain, but West likely to retain biggest customers

For the first time ever, Russia is selling weapons to Bahrain, whose government has been given the cold shoulder by the West for a violent crackdown on anti-government protests, as part of an effort by Moscow to capitalize on the Arab Spring to increase arms sales in the lucrative Middle East market.

An unnamed official in Russia’s Defense Ministry told Bloomberg News this week that Rosoboronexport, Russia’s state-owned arms dealer, that Bahrain is buying tens of millions of dollars of AK103 Kalashnikov rifles, together with grenade launchers and ammunition. It quoted a Bahraini government spokesman as saying the two countries’ relations are “getting stronger.”

But analysts say it is unlikely Moscow – or Beijing, another potential weapons supplier to the region – will make much headway even as serial human rights violations by

governments resisting mass protests and rebellions have forced the West to hold back on many weapons sales to the Middle East.

“Yes, Bahrain is a country that Western countries are less likely to supply, but Bahrain is only a very small recipient of arms in the region. And, when it comes to major weapons, even Bahrain is likely to remain a significant client for the U.S.,” said Pieter Wezeman, a senior researcher at the Stockholm International Peace Research Institute (SIPRI).

“The major customers [in the Gulf] are the UAE [United Arab Emirates] and Saudi Arabia, and I don’t see any reason that there will be major change there,” he told The Media Line.

Lethal crackdowns across the Middle East by governments like Bahrain’s have created a conundrum for the U.S. and other Western governments: On the one hand, they want to ensure political stability; on the other, they don’t want to be seen helping regimes engaged in wholesale killings and arrests. Russia has fewer qualms about selling weapons to violators, such as Syria’s Bashar Al-Assad and Muamar Al-Qaddafi’s Libya.

“Russia has much thicker skin over the perceived violations of human rights. They conduct a realpolitik arms sales policy. Russia is also very anxious to expand its market share in the Middle East because, like bank robbers say: ‘That’s where the money is’,” Ariel Cohen, a Senior Research Fellow, at the Washington-based Heritage Foundation.

Bahrain is a U.S. ally and home to its Navy’s Fifth Fleet, but in June Washington put the island kingdom on its list of human rights violators after it put down a rebellion earlier this year at the cost of 30 or more lives and mass arrests.

No one knows the value of the Middle East arms market, because many sales are never reported and ones that are publicized may never go through. But SIPRI estimates that Gulf states, like Bahrain, alone have agree to buy some $123 billion in arms over the next decade.

Four United Nations arms embargoes are currently in force in the Middle East and North Africa, targeting Libya and Iran as well as non-government forces in Lebanon and Iraq. A European Union embargo is also in place against Syria. Since January 2011, more than 160 export licenses for Middle East countries have been revoked by Britain, mainly for Libya and Bahrain.

But Rosoboronexport said on August 17 it would maintain arms sales to Syria even after six months of unrest have led to some 2,200 deaths at the hands of security forces. Russia defended its decision on the grounds that the UN had not formally imposed sanctions on the regime. Days earlier, U.S. Secretary of State Hillary Clinton challenged Moscow to "get on the right side of history" and stop the sales.

Bahrain aside, however, analysts said Russia or China would find it difficult to capture new markets. Wezeman said the one small opening for them might be for anti-riot gear,

which the West would be the most hesitant to sell regimes as long as there is widespread domestic unrest in the region.

The U.S. and Europe have the most important markets – Saudi Arabia and Egypt – sewn up through long-standing alliances and aid programs, while traditional customers for Russian arms like Syria and Libya may switch suppliers in the wake of region change.

Russia and China have sold Egypt “second line equipment,” such as trainer aircraft from China and surface-to-air missiles from Russia, but Cairo receives some $1.3 billion in U.S. military aid annually and won’t be changing its main supplier so quickly, analysts said.

Saudi Arabia, meanwhile, is closely tied with the West and its weapons systems are entirely based on Western technology. Riyadh depends on U.S. backing to maintain a strategic balance with Iran, its foe across the Gulf. The U.S. has contracts to sell Saudi Arabia advanced weaponry worth some $67 billion over the next decade, making it the biggest arms deal in U.S. history.

Germany agreed in July to sell Saudi Arabia 200 Leopard 2A7+ main battle tanks for $2.85 billion.

Although the West began selling some arms to the regime of Al-Qaddafi after an embargo was lifted in 2004, sales were relatively small. By contrast, Russia's Interfax news agency quoted military sources as saying that Russia had as much as $3.8 billion in confirmed or possible orders to Al-Qaddafi before civil war broke out in February.

With a new rebel-led government in power, the tables may turn in Libya. The country’s transitional leaders made clear shortly after they toppled Al-Qaddafi that they would favor the NATO countries that played a decisive role in the civil war on the opposition’s side. Their remarks related to future oil contracts, but analysts said they could just as easily apply to arms. Russia is estimated to have lost some $4 billion over the cancellation of contracts with Libya

“The EU and U.S. have taken a strong stand in support of rebels,” said Wezeman. “If the country stabilizes they will be in need of new weaponry and its looks as if European countries and the U.S. would be first in line.”

Cohen of the Heritage Foundation said Russia’s insistence of continuing to sell arms to the Al-Assad regime in Syria could cost it another major customer. The Russians have signed contracts to sell weaponry, but they could argue the force majeure of a months’ long rebellion to back out, he said.

“The Syrian regime is past the point of no return and is on its way to slow bloody and painful collapse,” Cohen told The Media Line. “They have a gravy train there in place that encourages people to grab the money and deliver the weapons.”

‘Turkey risks dependency on Moscow’http://www.hurriyetdailynews.com/n.php?n=8216turkey-risks-dependency-on-moscow8217-2011-09-01

Thursday, September 1, 2011ISTANBUL - Hürriyet Daily News

A deal for Turkey’s first nuclear plant to be built by Russia’s Atomstroyexport will make the country more dependent on Russia, a US diplomat says in a leaked cable

Turkey’s deal with Russia to build the country’s first nuclear power plant in the southern province of Mersin will deepen its dependency on the latter, a United States diplomat has said, according to a cable released Aug. 26 on Wikileaks’ website.

“Practically all of Turkey’s natural gas comes from Russia and this arrangement would deepen Turkey’s dependency on the Russian energy sector, which some in Turkey oppose,” said John Beyrle, ambassador of the United States to Moscow, according to the leaked document created April 3, 2009.

Russia proposed a build-own-operate arrangement for four more reactors in Turkey, following Turkish President Abdullah Gül’s visit to Russia between Feb. 12 and 15, 2009, which would be the first such deal ever in the world, the cable said. The leaked document cited Leonid Yanko, Atomstroyexport’s External Affairs Division, saying on Feb. 17, 2009, that Russia would thus retain ownership for the lifetime of the reactor through such a deal. The initial agreement would specify the price per kilowatt for the first 15 years, with the follow-on period pricing negotiated on a market price basis, Yanko was cited as saying.

“If Russia owns the plant and runs it for the entire lifetime, Turkey would have little negotiating leverage to use in price negotiations after the 15 year point,” the U.S. ambassador said.

The diplomat also cited Bulat Nigmatulin, Russia’s former deputy minister for atomic energy, saying on March 3, 2009, that a build-own-operate, or BOO, agreement could hardly be profitable with the 15-year price per kilowatt. The U.S. ambassador noted that Nigmatulin “saw this as a showstopper.”

“Nigmatulin told us that the tender could be canceled for one of several reasons; the most likely being the high cost per kilowatt that Russia would charge for the electricity generated by the plant and the uneconomically sound 15-year pricing scheme,” the U.S. ambassador to Moscow wrote in the leaked document prepared in 2009.

However, Turkey and Russia signed a memorandum on Jan. 13, 2010, both committing to cooperate in building Turkey’s first nuclear power plant in the eastern Mediterranean town of Akkuyu in Mersin province. Atomstroyexport, a leading engineering company of Russia’s State Nuclear Energy Corporation, or Rosatom, which deals with the construction of nuclear power facilities abroad, is the company expected to build the Akkuyu plant.

Company in difficulty

Atomstoryexport cannot fulfill existing international nuclear energy contracts while it is seeking to conclude new ones, the U.S. diplomat wrote in the cable.

The company might face serious financial difficulties and fail to provide sufficient machine-building infrastructure and trained specialists, the cable read.

“Rosatom is diligently pursuing construction contracts for 11 new nuclear reactors in India, Iran, Bulgaria and Ukraine and it is in active discussions on another six reactors; two in China and a build-own-operate plant with four reactors in Turkey,” said the U.S.’s leaked document. “The insufficient machine-building infrastructure and a paucity of trained specialists make it unlikely that the company will be able to realize all of these plans soon.”

National Economic Trends

September 02, 2011 10:13

Russia had zero inflation in August – Ulyukayevhttp://www.interfax.com/newsinf.asp?id=270148

SOCHI. Sept 2 (Interfax) - Russia had zero inflation in August, Central Bank First Deputy Chairman Alexei Ulyukayev said.

"I think it will be nil," he told journalists on the sidelines of the International Banking Forum in Sochi.

Asked whether Russia might have had net deflation in August, Ulyukayev said: "More likely 'no' than 'yes.'"

jh

(Our editorial staff can be reached at eng.editors@interfax.ru)

Russia won't adjust policy on mkt volatility-cbankhttp://www.reuters.com/article/2011/09/02/russia-cbank-idUSL5E7K204R20110902

2:17am EDT

SOCHI, Russia, Sept 2 (Reuters) - Volatility on global financial markets will not lead Russian policy makers to undertake any significant changes in their stance, Alexei Ulyukayev, first deputy chairman of the central bank, said on Friday.

"We are an open economy, global events are affecting us now and will affect us until the end of the year," Ulyukayev told reporters on the fringes of a banking conference in Sochi.

"This effect is marginal at the moment; we must consider it, but it will not lead to any significant changes in policy." (Reporting by Oksana Kobzeva, Douglas Busvine)

Bank of Russia's net FX purchases at $500m in August

http://www.rbcnews.com/free/20110902111113.shtml

      RBC, 02.09.2011, Sochi 11:11:13.Central Bank of Russia's (CBR) net foreign exchange (FX) purchases amounted to USD 500m in August, CBR First Deputy Chairman Alexey Ulyukayev said today.

      "We bought and sold only a little, and the balance totaled USD 500m," he said. According to earlier reports, CBR bought USD 3.71bn and EUR 1bn in July in the process of foreign exchange market interventions.

Gaidar Institute's polls suggest industrial supply is outperforming demand in August

http://www.bne.eu/dispatch_text16480

Alfa BankSeptember 2, 2011

According to polls of 1,150 Russian enterprises conducted by the Gaidar Institute, demand for their production is being outperformed by supply. This implies a strong role of inventories in economic growth and signals the risk of a potential slowdown.

The results of the poll raise questions of Russia's ability to deliver strong 2H11 results. According to the institute, 28% of enterprises see their production exceeding demand versus 22% in June-July. Weak demand for industrial products creates concern regarding industrial output growth, which already slowed down from 5.3% y/y in 1H11 to 5.2% in July. Moreover, such a trend suggests that inventories growth continues to play a major role in economic growth, unchanged from 1Q11 when stockbuilding accounted for almost 100% of GDP growth. Given the strong base effect from 3Q10, we believe that our 4.5% GDP growth forecast in 3Q11 is not under threat; however, the slow demand growth may hit manufacturing closer to 4Q11 and provide the risk of much slower growth at the end of the year. Our conservative 3% y/y GDP growth estimate for 4Q11 thus looks appropriate.

Natalia Orlova

Moscow markets not immune to the global panic bughttp://rbth.ru/articles/2011/09/01/moscow_markets_not_immune_to_the_global_panic_bug_13332.html

September 1, 2011Vladimir Ruvinsky

The Russian equities market lost everything it had gained over a year this month as investors sought security in cash and bonds. Alongside world stock exchanges, the Russian stock market has lost, on average, one-sixth of its capitalisation since the beginning of August. By August 25, the RTS dollar index had dropped by 18pc, and the Micex index, denominated in roubles, by 15pc.

“The Russian market has now stabilised,” according to Evgeny Osin, chief economist with the Finam managing company. He expects it to rebound late in the third quarter or

perhaps the fourth quarter of 2011.

The slump on the Russian stock market was triggered by Standard & Poor’s downgrading the US credit rating. Micex and RTS beat the 2008 record daily falls by 5.33pc and 7.56pc respectively. The market bounced back 6pc between August 10 and 17, before plunging again.

“Everything was plunging: it was Gazprom one day, Sberbank the next and Uralkali the day after”, says Andrey Kukk, Uralsib’s chief trader. The main reason was that investors were shedding assets marked as risky in their portfolios – shares, that is – and moving them into the dollar and bonds with lower, but presumably guaranteed, yields.

Simultaneously, the markets have moved into a period of greater instability, with daily Micex fluctuations reaching 8pc. This has prompted experts to compare these leaps to the volatility of the market in 2008. Mr Kukk attributes the wild fluctuations to speculative investors. “Every spike has been initiated by short positions on any good piece of news from any country,” he says.

Institutional investors risk less, trying not to lose anything. This will continue, he thinks, “until market players make up their minds about whether they are included in the current share prices”.

According to Mr Kukk, four main factors influence investors on the Russian stock market: “Fear of sliding into a second wave of global recession; fear of a worsening debt crisis in Europe; instability on the currency and commodity markets, and geopolitical instability.”

Mr Osin points to one more factor: media reports with “a deliberately negative macro-economic and financial character that were reflected in the business climate indicators and investor mood on the market.”

Mr Kukk says investors should rethink risk assessment: “What we see is a debt crisis, while investors move from shares to bonds, which is a paradox.” Some market players think the stock market is on the way to a slow recovery. Big investment banks have accumulated lots of money in their accounts, notes Pavel Dorodnikov, head of trading with Rye, Man & Gor Securities – but are not doing anything with it.

The policy of the US and European regulators remains committed to supporting economic demand recovery, which implies rising share prices, including in Russia, Mr Osin points out.

“The recovery may be rapid, considering that the EU and US have managed to resolve the situation, although it may have involved market shocks,” he says.

Analysts with the Alfa-Capital investment company think current Russian share prices are attractive for long-term positions. Mr Osin agrees: “Today, against the background of

a stabilising market, we see a certain very gradual increase in the number of those wishing to open a long position.”

So far, investors have no pointers in this country or abroad and many volatile days may lie ahead. Alexey Dolgikh, vice-president of Troika Dialog, says: “There is still a lot of uncertainty. Big investors are confused and are sitting on cash. So, there will be a lot of volatility; the market is emotional, but we do not expect a slump.”

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Last updated: September 1, 2011 10:43 pm

Russia halts grain deliveries due to backlog

By Isabel Gorst in Moscow

Russian Railways halted grain deliveries to the Black Sea port of Novorossiysk this week, throwing a wrench into Russia’s return to global wheat markets after it ended an export ban.

The railway said a “massive” backlog of grain wagons was clogging lines linking farmland to the port. Stormy weather had slowed vessels leaving Novorossiysk, adding to the back-up.

Russian farmers have raced to move grain to the port since July, when the government lifted a ban on exports imposed after a heatwave and drought last year. Russia is expected to harvest 87m to 88m tonnes of grain this year, compared with just over 60m in 2010.

SovEcon, the Moscow-based agricultural consultancy, forecasts that Russia will export 20m tonnes of grain in the 2011-12 crop year, including 18m tonnes of wheat. Grain exports reached a near record 3m tonnes in August and are expected to continue at this level in September. “Grain exports might slow down temporarily, but this is nothing extraordinary,” said Andrei Sizov Jnr, SovEcon managing director.

The return of Russia and Ukraine to global grain markets has eased tight supply. With analysts cutting estimates for US corn, wheat from the Black Sea region is expected to take up some of the slack.

European wheat prices, which fell after the Russian export ban was lifted, have been edging up again. Milling wheat for November delivery was trading at €208.50 per tonne in Paris, down 1.3 per cent on the day, after hitting a six-week high of €215.25 on Monday. In Chicago, CBOT December wheat was $7.84 a bushel, down 1 per cent.

The disruption in Novorossiysk could boost wheat shipments from the US, which reported a relatively slow 369,200 tonnes of net export sales last week.

Russia rose to be the world’s third-biggest wheat supplier after the government launched agricultural reforms after 2000. However, it has struggled to develop transport and storage infrastructure.

Russian grain exports remain vulnerable to the domestic market and transport bottlenecks. While Dmitry Medvedev, the Russian president, said this week that fresh restrictions would probably not be necessary this year, several senior officials have warned exports might be curbed if domestic prices rose.

Additional reporting by Gregory Meyer in New York

MOSCOW BLOG: Investment into Russia triples - is the tide turning? http://www.bne.eu/storyf2878/MOSCOW_BLOG_Investment_into_Russia_triples__is_the_tide_turning

bne September 2, 2011

As one of the few fully functioning economies left in Europe, Russia appears to be attracting foreign investors in their droves. In July, Russia took in $87.7bn of fresh investments – triple the amount from a year earlier, according to Rosstat. Is the tide turning?

It is good headline, but the numbers are actually a bit deceptive, as much of this money is profits reinvested by existing foreign investors, which is counted by Rosstat as foreign investment. Likewise, more of this number is due to foreign loans made to pay for M&A deals and the re-registering of Russian business to foreign domiciles. Still, the result is indicative of a general rising by foreign investors – especially retailers – in the Russian market.

Out the total, foreign direct investment (FDI) jumped by 29.8% to $7bn, says Rosstat, with the "other" category making up almost all of the rest. This is a much more modest figure, but still encouraging. The Central Bank of Russia is even more upbeat and estimates total FDI into Russia at $26bn over same period – nearly twice the result it

reported for the first half of 2010. So although the wave of "real investment" into Russia is clearly rising, it is not quite as dramatic as the headline figures suggest. Nevertheless, even the "non-real" investment arriving in Russia will have a positive impact on the economy.

Capital flight and back again

About half of the general investment was actually short-term credits (180 days or less), accounting for $46.5bn of the total. Broken down by sector, short-term borrowing by Russian banks also accounted for about half of the borrowing, or $44bn of the "investment," with $42bn coming from Switzerland alone. But this number is also confusing as much (all?) of this last number is probably rich Russian lending to their own companies as a way of getting money into the country to support their companies, but leaving the door open to get the cash back out again when things improve.

This trend also testifies to improving sentiment amongst Russia's rich, as starting in the last quarter of 2010 Russia experienced a sharp outflow as capital flight reappeared for the first time in a decade. A total of $31bn flowed out of the country over the first half of this year and altogether some $50bn is thought to have left for sunnier shores ahead of the dual parliamentary and presidential elections in December and March respectively. However, the capital outflow came to an end in July as money began to flow back into the country again in July.

What appears to be going on is that those oligarchs whose businesses are dependent on politics were salting away a little something just in case the elections spring a surprise. This doesn't mean a change at the top, which no one expects, but just as damaging are changes further down the chain of command. As politically tainted business relies heavily on relations with bureaucrats, this sort of change can lead to an oligarch losing control of their business entirely. Indeed, Russian President Dmitry Medvedev has specifically started a campaign to remove state officials from the boards of state-owned companies and more of the same can be expected in the new year.

At the same time, asset prices are getting cheaper with the price/earnings ratio on stocks falling to a ridiculously low 4x during the worst of the recent sell-off in the last week of August. However, the economy continues to grow at around 4% and the state's forward-looking forecasts for oil remain at about the $100-per-barrel mark. At the same time, lending by banks was up by over a quarter in the first seven months of this year. All this suggests that the economy will bounce back, as has been widely expected, albeit at a slightly slower pace than anticipated due to the sovereign debt problem in the rest of the world.

For those businessmen doing "real" business, the investment climate is improving. The boldest are going back to investing in their businesses, as in the long term the main goal of most businessmen remains to capture as much market share as they can while it is still up for grabs. This is what happened in 1999 when Roman Abramovich led the turnabout

by buying the PAZ busmaker on the open market because it was a good company but the stock was at a rock-bottom valuation.

Russia markets fall, await US payrollshttp://af.reuters.com/article/commoditiesNews/idAFL5E7K20QN20110902

Fri Sep 2, 2011 8:01am GMT* Stocks down ahead of U.S. payrolls data * Rouble eases across board, strong oil prevents deeper fall

By Nastassia Astrasheuskaya MOSCOW, Sept 1 (Reuters) - Russian stocks and the rouble weakened on Friday,tracking falls on major stock markets ahead of key U.S. employment data later onFriday. The local market followed a negative opening in Asian indexes and fed offthe U.S. market drop in the previous session, and was expected to trade in arange for most of the day until the U.S. data is published at 1230 GMT.

By 0635 GMT, the dollar-based RTS index and the rouble traded MICEX had lost more than 1 percent each, underperforming the broader emergingmarkets index , which was down 0.6 percent. "Investors are likely to stay focused on US non-farm payroll data as thecentral news event of the week, with subdued activity before the numbers arereleased in the afternoon," analysts at Uralsib said in a note. A morning gap down in excess of 1 percent in the Russian market is naturalas commodities and futures had taken a further hit, they added. Oil prices remained strong , with Brent crude trading around $114 perbarrel, curbing losses in the commodity-influenced rouble, which fell 0.2percent versus the dollar and the euro to 29.06 and 41.36 roubles respectively. Versus the euro-dollar basket, the rouble lost 0.2 percent to 34.59 , hovering in the range of 34.15-35.15, where the central bank isbelieved not to be intervening. "Today, the market is likely to keep calm, as opening positions ahead of theU.S. data is scary. Much will depend on foreign currency flows, but our marketwill probably stay around 34.60 against the basket," said Roman Pakhomenko,dealer at Lanta bank. Russia's central bank bought a relatively-modest half a billion dollars inforeign currency interventions last month, First Deputy Chairman Alexei

Ulyukayev said on Friday. The small size of the dollar buying was furtherevidence that the bank has shifted towards greater exchange-rate flexibility. Ulyukayev also said last month's market turmoil would not lead to a policyshift in Russia; adding to signs that the central bank will hold rates at itsnext monthly policy meeting after Brazil surprisingly cut rates this week. The spread on Russia's dollar bonds over comparable U.S. securities,expanded to 250 basis points from below 240 in the previous session ,following a fall in Russia's 30-year benchmark Eurobond's yield to 4.1 percent,a notch away from the 2011 low of 4.04 seen a month ago. Russian Markets Latest Net % Change Change Change on year Stocks MICEX 1538.54 -13.04 -0.84 -8.85 RTS 1685.55 -18.31 -1.07 -6.45 London ADRs 942.38 -9.12 -0.96 -4.60 Emrg Mkt Indx 1032.36 -5.64 -0.54 -10.34 MSCI Russia 308.41 -0.62 -0.20 -6.72 Sberbank 84.06 -1.03 -1.21 -19.31 VTB 0.08 -0.00 -1.74 -25.74 Gazprom 175.60 -1.75 -0.99 -9.25 LUKOIL 1726.90 -11.10 -0.64 -0.87 Rostelecom 179.19 -3.84 -2.10 15.05 Dollar/Rouble 29.05 0.05 0.17 -4.97 Euro/Rouble 41.37 0.10 0.23 1.63 Rouble basket 34.59 0.07 0.20 -1.53 Debt Bid Ask %Rtn Coupon Russia 10-yr bond 7.96 7.85 -0.32 7.60 Money market Bid Ask Close Overnight rate 3.55 3.85 3.85 All data taken from Reuters at 0657 GMT.

(Reporting By Nastassia Astrasheuskaya, additional reporting by VladimirAbramov)

Business, Energy or Environmental regulations or discussions

Rosneft Bank Unit to Handle Utilities Payments, Kommersant Sayshttp://www.bloomberg.com/news/2011-09-02/rosneft-bank-unit-to-handle-utilities-payments-kommersant-says.html

Q

By Yuliya Fedorinova - Sep 2, 2011 6:07 AM GMT+0200

OAO Rosneft’s bank unit plans to become the sole payment center for Russia’s utilities, replacing OAO Alfa Bank, Kommersant reported today, citing unidentified people familiar with the plan.

The Russian Regional Development Bank, as the Rosneft unit is called, may get access to a market with 1 trillion rubles ($34.5 billion) in annual turnover, the newspaper said.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Polymetal Climbs 4th Day This Week as Gold and Silver Advancehttp://www.bloomberg.com/news/2011-09-02/polymetal-climbs-4th-day-this-week-as-gold-and-silver-advance.html

QBy Jason Corcoran - Sep 2, 2011 9:15 AM GMT+0200

OAO Polymetal, a Russian gold and silver producer, advanced for the fourth day this week as the price of both metals increased.

The stock jumped as much as 2.7 percent at the start of trading and was 0.5 percent stronger at 619.8 rubles by 11:01 a.m. in Moscow.

Immediate-delivery gold gained 0.6 percent to $1,836.93 an ounce. Spot silver rose 0.4 percent to $41.77 an ounce.

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

TMK's first half net profit soars 285 pct to $258 mlnhttp://en.rian.ru/business/20110902/166371917.html

11:56 02/09/2011

MOSCOW, September 2 (RIA Novosti)

TMK, Russia's largest producer of steel pipes for the energy sector, saw its first half 2011 net profit skyrocket 285 percent year-on-year to $258 million to IFRS, the company said in a statement on Friday.

Revenue stood at $3.547 billion, a 38 percent year-on-year increase, due to a price growth and an improvement of product quality. EBITDA grew to $625 million from $415 million, while EBITDA margin widened to 18 percent from 16 percent.

Net debt slightly decreased to $3.843 billion as of June 30, 2011 against $3.853 billion as of March 31 this year.

Gross margin rose 39 percent to $814 million. Pre-tax profit skyrocketed by 253 percent in January-June 2011 to $360 million, the company said.

TMK increased sales by 16 percent to 2,179 tons of pipes in the first six months this year.

"The company expects to see robust demand for oil and gas pipes through 2011 year-end as oil and gas companies maintain their drilling programs with little sensitivity to short-term volatility in energy prices. TMK confirms the previously given guidance on sales volumes growth and does not expect a significant deterioration of financial performance over the second half of 2011," TMK said.

Alrosa to split shares

http://www.rbcnews.com/free/20110902114221.shtml

      RBC, 02.09.2011, Moscow 11:42:21.Alrosa plans to commence on September 8 a share offering worth RUB 3.68bn (approx. USD 127m) at par value for the purpose of a share split, the state-owned uncut diamond monopoly said today.

      The issue includes 7.36bn shares with a par value of RUB 0.5 (approx. USD 0.02) each. The company intends to swap one share with a par value of RUB 13,502.5 (approx. USD 467) for 27,005 shares with a par value of RUB 0.5 (approx. USD 0.02) each. The company's current share capital consists of 272,726 ordinary shares.

Sollers transfers right to sell and service Fiat cars to Fiat

http://www.bne.eu/dispatch_text16480

Renaissance CapitalSeptember 2, 2011

Event: Yesterday (1 September) Sollers announced an agreement to transfer to Fiat the right to sell and service Fiat cars in Russia from 1 January 2012. Moreover, under the agreement Fiat will undertake guarantee obligations on all Fiat cars sold by Sollers through its official dealer network since 2006, as well as all issues around the supply of spare parts and servicing. The conditions of the deal were not provided.

Action: Neutral for Sollers, in our view.

Rationale: Sollers' move was expected, as the company has rejected the plan of creating a JV with Fiat and will now concentrate on the operations of its JV with Ford, signed in June 2011 and due to begin operations later this year. However, Sollers has not completely dismissed the idea of continued co-operation with Fiat: in June, CEO Vadim Shvetsov said that Sollers was ready to continue providing assembly capacity for Fiat models for three more years. According to Kommersant today (2 September), Sollers is also confident that the transfer of the right to sell Fiats will not affect Sollers' relationship with dealers who sell other brands of the company's (such as SsangYong SUVs).

Alexandra Serova

Mitsubishi to bring electric vehicles to Russiahttp://www.thegreencarwebsite.co.uk/blog/index.php/2011/09/02/mitsubishi-to-bring-electric-vehicles-to-russia/

The Russian electric vehicle market will soon receive a lift after the Government of the Kaluga Region signed a memorandum of understanding with ROLF Import, Mitsubishi’s exclusive distributer in the market.

The parties are expected to collaborate on improving the natural environment of the Kaluga region. It will include information sharing among the groups regarding the promotion of electric vehicles and electric vehicle infrastructure. They will also work together on reducing CO2 emissions and increasing energy efficiency in the region.

Negotiations have also been conducted regarding the organisation of a joint collaboration to improve environmental conditions in the region where Mitsubishi’s joint production facility with Peugeot-Citroen is located.

Antitrust Laws May Be Eased for Retail Chains 02 September 2011By Anatoly Medetsky

The Federal Anti-Monopoly Service proposed legislative changes that would allow big retailers to expand a little more, a senior executive at the agency said Thursday.

Timofei Nizhegorodtsev, chief of the agency's department for social services and trade, also touted its courtroom victories over the last few weeks — involving Denmark's Novo Nordisk and France's Auchan — as setting new standards for the pharmaceutical and retail industries, respectively.

The amendments to the retail trade law, which are now at the Cabinet for consideration, would push back the ban on a chain of stores capturing more than 25 percent of the market in a region, provided that it grows "organically," Nizhegorodtsev said. Under the proposal, a company would have the chance to build more stores, even if that resulted in its share expanding to more than 25 percent, he said. But after a chain exceeds the 25 percent threshold, further growth would still be ruled out.

Mergers and acquisitions would remain banned as a way of surpassing the threshold, as would rentals, Nizhegorodtsev said.

"They suppress another spot of entrepreneurial activity," he said at a news conference. "Organic growth doesn't have that danger."

Nizhegorodtsev played up the lawsuit at the Moscow Arbitration Court, where the agency successfully defended its case against Auchan. The court ruled against the retailer last month after the company sought to overturn orders by the Federal Anti-Monopoly Service to observe the retail law in its dealings with several bakeries in and around Moscow. The bakeries had to sell their bread more expensively to meet Auchan's supplier terms, an investigation by the agency had found.

"A climactic moment has come," he said. "Courtroom practice is beginning to shape up. … Large retailers had lived as if the retail law would never affect them."

This ruling and one against a smaller Yekaterinburg-based chain in a recent unrelated case would define the future of the sector, he said. The government enacted the retail law in 2009 in a bid to give suppliers a prop in dealing with retail chains.

Nizhegorodtsev's department now spends 70 percent of its time on efforts to bring greater transparency to the pharmaceutical and medical equipment markets, he said. In a landmark development, the agency concluded a settlement with Novo Nordisk in July, after a legal battle, to allow more dealers to bid for the company's medicines.

"This brought about a tectonic change on the market," he said.

Pharmaceutical companies often preferred to sign exclusive agreements with select distributors, shutting out others — a practice that inflated prices, he said.

Novo Nordisk admitted to antitrust law violations and adopted a new policy in hiring distributors. It also paid a fine of 53.5 million rubles ($1.85 million), an amount less than what the Federal Anti-Monopoly Service had initially sought.

Read more: http://www.themoscowtimes.com/business/article/antitrust-laws-may-be-eased-for-retail-chains/443075.html#ixzz1WmB1qTJJ The Moscow Times

Russian poultry volume increases year on yearhttp://www.worldpoultry.net/news/russian-poultry-volume-increases-year-on-year-9305.html

//02 Sep 2011 The volume of industrial poultry production in Russian agricultural organisations in July 2011 amounted to 224.1 thousand tonnes in carcass weight (304.9 thousand tonnes in live weight), which is 3.6% less than in June 2011, but 12.2% more than in July of the last year.

In total in the first seven months of 2011 production volume increased over the same period of last year by 11.9% to 1586 tonnes in carcass weight.

The volume of imports of poultry meat to Russia in the first half of 2011 has grown over the same period of 2010 to 28.1% and amounted to 172.1 thousand tonnes. Such an increase in import numbers is attributed to the fact that during the first half of 2010, poultry imports from the United States were only carried out in January and February. Compared with the same figures of the first half of 2009, in 2011 was the fall of imports by 53.2%.

In the period of January-June 2011, USA remains the largest supplier of poultry to Russia. The US in the first half of 2011 had a share of 54.3% of total imports in the Russian Federation (in January-June 2010 – it was 17.7%, and in January-June of 2009 - 75.1%). Second largest import supplier to Russia is Brazil with a share of 25.1% of total shipments. In third place is Germany with 8.8%, the fourth place belongs to France - 5.9%.

Activity in the Oil and Gas sector (including regulatory)

UPDATE 1-Russia Aug oil output hits post-Soviet recordhttp://uk.reuters.com/article/2011/09/02/russia-oil-idUKL5E7K205E20110902

7:34am BST

* Aug oil output rises to 10.28 mln bpd

* Gas production falls 6.1 pct

* "Worst August for Gazprom" - analyst (Adds details, analyst comment)

By Vladimir Soldatkin

MOSCOW, Sept 2 (Reuters) - Oil output in Russia, the world's top crude producer, hit a new post-Soviet high of 10.28 million barrels per day (bpd) in August compared with 10.26 million bpd in July, Energy Ministry said on Friday.

Russia retained its position as the world's top oil producer ahead of Saudi Arabia, which continued ramping up oil production last month when it extracted 9.9 million bpd, raising output by a further 50,000 bpd.

Russian companies pumped more oil in anticipation of tax benefits mooted by the government, which aim to cut crude export duty and stimulate production of high-grade oil products.

"WORST AUGUST FOR GAZPROM"

The country's natural gas production plunged 6.1 percent to 45.42 billion cubic metres (bcm) in August from 48.40 bcm in July following seasonal cuts in demand.

Gas output at Russia's top gas producer, Gazprom , declined 8.2 percent last month to 32.83 bcm.

"This is the worst August in the history of Gazprom. Gazprom produces as much gas as it can sell. Low production reflects problems with sales," said Mikhail Korchemkin of East European Gas Analysis.

"Export sales are lower because Russian gas is the most expensive on the European market," he added, also saying that domestic sales are affected by Russia's slow economic recovery and steady growth in regulated price of gas.

Analysts expect Russia's gas production to fall further as consumers in Europe, Russia's key market, had stockpiled volumes in the spring in anticipation of price rises. (Reporting by Vladimir Soldatkin; Editing by Maria Kiselyova and Douglas Busvine)

Bashneft, Tatneft May Get Extraction Tax Break, Interfax Sayshttp://www.bloomberg.com/news/2011-09-02/bashneft-tatneft-may-get-extraction-tax-break-interfax-says.html

QBy Stephen Bierman - Sep 2, 2011 8:21 AM GMT+0200

OAO Tatneft (TATN) and OAO Bashneft, the oil producer owned by Russian billionaire Vladimir Yevtushenkov’s AFK Sistema, may get exemptions from the extraction tax on high viscosity oil, Interfax said, citing Energy Minister Sergei Shmatko yesterday.

The state is considering how to compensate the companies, which stand to lose when Russia raises the export tax on heavy refined products such as fuel oil in October, Interfax said citing Shmatko.

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

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.

Med Crude-Urals strengthens, spot tenders awardedhttp://af.reuters.com/article/commoditiesNews/idAFL5E7K12HZ20110901

Thu Sep 1, 2011 5:16pm GMTLONDON, Sept 1 (Reuters) - Russian Urals crude strengthened in the Baltic on Thursday after producers Rosneft and Surgut awarded spot tenders with traders saying the next strengthening was likely if Shell won a large term tender by Rosneft. "The market believes Shell will pick up the big Rosneft tender again. So far Shell has had a few great months in Urals and has not felt any pain from their large Urals positions," said a trader with a rival major. Rosneft last week issued a semi-annual crude tender, offering 3.0-7.2 million tonnes of Urals crude for loading in Primorsk from October to March and results of the tender are due later this week or next week. Rosneft also issued a spot tender for 8 Urals cargoes for September and the first details emerged on Thursday.

Traders said Shell won four cargoes from the Baltic, BP won two and Total won one cargo with price levels pegged at around BFOE minus 25-50 cents. In the Mediterranean, Rosneft awarded a 140,000-tonne cargo to Vitol but prices could not be discovered. Surgut also awarded 3 cargoes from the Baltic at around BFOE minus 30-45 cents with the first one going to Repsol and the two others to Statoil, traders said. In the Platts window on Thursday, BP bid for Urals in the Baltic at BFOE minus 15 cents, some 35 cents stronger than a deal on Wednesday, traders said. In the Mediterranean, Vitol offered a 80,000-tonne cargo at BFOE minus 10 cents. It was not clear whether Shell would lift a cargo of Syrian crude from the port of Banias. Satellite tracking on Wednesday showed Shell had booked the Neverland Star tanker to berth at Banias over the weekend, but on Thursday the cargo was still near the Egyptian coast and Shell would not comment on whether the loading was still splanned.

(Reporting by Dmitry Zhdannikov; editing by William Hardy)

TNK-BP Said to Sell East Siberian Oil for October to BP, Unipechttp://www.bloomberg.com/news/2011-09-02/tnk-bp-said-to-sell-east-siberian-oil-for-october-to-bp-unipec.html

QBy Christian Schmollinger - Sep 2, 2011 7:02 AM GMT+0200

TNK-BP sold 200,000 metric tons of East Siberian Pacific Ocean pipeline crude, known as ESPO, for loading in October to BP Plc (BP/) and China International United Petroleum & Chemical Corp., said three traders who declined to be identified because the information is confidential.

Details of the sale are as follows:

------------------------------------------------------------Crude: East Siberian Pipeline Oil, RussiaQuantity: 100,000 tons, or 730,000 barrels x 2 cargoesBuyer: BP, UnipecLoading: OctoberPort: Kozmino Bay Terminal, Russia’s Far EastPrices: Premium of about $5.10 a barrel to Dubai price published by Platts.--------------------------------------------------------------

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

09:43 02/09/2011ALL NEWS

Irkutsk region announces auction for exploring two deposits

http://www.itar-tass.com/en/c154/216801.html

IRKUTSK, September 2 (Itar-Tass) — Russia’s Irkutsk region has announced an auction for exploration of two hydrocarbon deposits with the estimated reserves of 221.3 million tonnes of oil equivalent.

The action is scheduled for October 27. The deadline for applications is September 30. The start-up amount of the one-time payment per license is 36.5 and 22.5 million roubles.

Both fields put on auction are located in the Katangsky district not far from the Eastern Siberia-Pacific Ocean oil pipeline, the territorial department on subsoil use told Itar-Tass on Friday.

The prospected reserves of the Altybsky deposit are 84.1 million tonnes of oil and 53.5 billion cubic meters of gas and of the Nemchuysky deposit – 51.7 million tonnes of oil and 31 billion cubic meters of gas.

This is already the third action announced by the Irkutsk region this year.

At present, there are ten hydrocarbon fields at different stages of exploration are located on the territory of the Baikal region. Around 50 new deposits have already been distributed.

The biggest activity of subsoil users was registered in 2006-2008. Among license owners are 40 companies, including Rosneft, TNK-BP, Surgutneftegaz and the Irkutsk Oil Company.

10:52 02/09/2011ALL NEWS

Mass sale of filling stations begins in Altai

http://www.itar-tass.com/en/c154/216842.html

BARNAUL, September 2 (Itar-Tass) — Practically all fuel market operators that are not part of vertically integrated oil companies have put their filling stations up for sale sell because of their unprofitability, head of the Altai Fuel Union Yuri Matveiko told reporters on Friday.

“We have the worst situation among all the federal districts. All networks have been put up for sale – about 500 filling stations,” Matveiko said. “Fuel business has ceased to be profitable.”

One litre of the popular AI-92 petrol at filling stations of major oil companies costs about 23 roubles. Independent market operators sell it for 25 roubles.

The Altai Territory was one of the first Russian regions to be swept by the so-called petrol crisis this spring. The first fuel crisis signs appeared in the region on April 22. On April 25 some filling stations in the territory limited petrol sale, and the others raised the fuel price by almost 5 roubles. The tensions on the fuel market in the region continued for about a week. After the crisis, the structure of petrol consumption in the Altai Territory clearly changed. There are queues of motorists almost around the clock at filling station of the large networks - Rosneft and Gazprom Neft. There are no queues at other stations because the fuel price at them is higher.

The Russian Federal Antimonopoly Service (FAS) department for the Altai Territory in June recognised a number of filling station owners violators of antitrust laws during the petrol crisis that broke out in the region in late April.

Independent owners of filling stations operating in the Rubtsovsk and Zonalny districts of the territory were recognised violators of the legislation. During petrol supply disruption they dramatically increased fuel prices at their filling stations. “It has been decided not to give them improvement notice, as the companies voluntarily reduced the prices. However, they are still held responsible. In particular, the materials on the Rubtsovsk district have already been transferred to the head of the Altai FAS department to initiate administrative proceedings,” said the agency spokeswoman Yelena Pushkareva.

FAS was also considering materials on violations during the petrol crisis by fuel market operators in other districts of the region and by the major market players - Rosneft and Gazprom Neft.

The residents of the Altai Territory who suffered during the petrol crisis in late April are entitled to compensations for moral and material damage, deputy head of the department for prosecutors' participation in civil and arbitration suits under the regional prosecutor’s office Irina Stepanyuk told Itar-Tass earlier. Justice bodies sued 32 petrol station owners soon after the fuel crisis began in the region. The petrol stations in question introduced various restrictions, such as limited amount of fuel that could be purchased, or sold petrol only to club card holders. Courts have already met the prosecutors' demands regarding five companies, finding them guilty of consumer rights violations. “Once the ruling becomes effective, an Altai Territory citizen may file a damages suit against petrol station owners,” Stepanyuk explained.

In her opinion, courts are likely to grant the citizens’ damages suits. “You will have to prove that they have refused to sell petrol to you, by asking an eye-witness to testify at

the hearing. The sum of damage will depend on the negative consequences caused to the citizen in each particular case,” she added.

The regional prosecutor’s office noted that no court rulings had been passed on the largest participants in the petrol crisis: Gazprom Neft and Rosneft. After the rulings come in force, the prosecutors will publish a list of companies against which claims may be filed.

Rosneft - Details From Conference Call On ExxonMobil Agreement

http://www.bne.eu/dispatch_text16480

CitiSeptember 1, 2011

Rosneft hosted a conference call this afternoon to discuss its Strategic Cooperation Agreement with ExxonMobil. The offshore projects are naturally long-dated, but with significant opportunities for reserves and production once they do come online. As we surmised, the Bazhenov shale in West Siberia is being specifically targeted as a tight oil opportunity. Finally, we see a transfer of best practices as the main medium-term boost Rosneft is likely to receive from the agreement.

Long-dated, but highly prospective offshore opportunities: As is common with large, expensive, and risky projects, first production from the offshore JVs is likely a decade off, but the resources in play are very large, and first drilling results should be seen in approximately four years. The first exploration wells in both the Kara Sea (Arctic) and the Black Sea will be drilled in 2015, with final investment decisions to be taken in 2017-20. Estimates of recoverable reserves are speculative, as only seismic has been run yet, but Rosneft thinks c35bn bbl of recoverable oil and up to 11tcm of recoverable gas are available in it East Prinovozemelsky licences in the Kara Sea, while the Tuapse Trough in the Black Sea may hold another c8.8bn bbl of oil.

Bazhenov shale indeed a target: As we surmised in our initial reaction to the deal, the references to West Siberian tight oil indeed point to development of the Bazhenov Shale. Reserves potential is difficult to estimate. The company thinks 2.5bn tonnes (18bn bbl) of oil resources lie in that formation in its existing licences. Assuming a 4% recovery, a typical target in Texas' Eagle Ford shale, would for example give 'only' 700mn bbl of recoverable reserves, but a 15% factor, as is sometimes applied to Bakken estimates, would give 2.7bn bbl of recoverable reserves. In any event, Rosneft is also looking at developing other low-permeability formations in the region in addition to the Bazhenov, particularly in the Priobskoye field.

We see nearer-term upside from best practices transfer: In the medium term, we see Rosneft potentially gaining from its exposure to a high-quality international partner,

allowing it to learn and apply industry best practices to its existing operations. ExxonMobil is considered an industry leader in operational and financial management, and should have much to offer Rosneft in these terms. The presentation noted that not only will there be personnel exchanges going both ways, but that Rosneft can also invite ExxonMobil employees to consult on its own projects.

Tax changes needed: Both offshore and tight oil projects will require adjustments to the Russian oil tax regime. The offshore regime is currently under discussion, and may be moved to a special profit-based system. Given that the first well won't be drilled for 4 years, there is plenty of time to iron out the details between now and then. We think development of the Bazhenov shale and other tight oil formations will also require either a separate regime or, at the least, that strong modifications be made to the current one.

Ron Smith

Gazprom

Construction of Sakhalin – Khabarovsk – Vladivostok GTS nearing completionhttp://finchannel.com/news_flash/Oil_%26_Auto/93935_Construction_of_Sakhalin_%E2%80%93_Khabarovsk_%E2%80%93_Vladivostok_GTS_nearing_completion/

01/09/2011 11:05 (14:57 minutes ago) The FINANCIAL -- Gazprom's group of experts led by Alexander Ananenkov, Deputy Chairman of the Company's Management Committee has finished its business trip to the Far East. Today the Company's employees visited Gazprom's gas transmission facilities under construction in Vladivostok. A meeting dedicated to gas supply and gasification of the Far East and first of all – the Primorsky Krai took place.

It was highlighted at the meeting that construction of the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS), a key element of the Unified Gas Supply System in Eastern Russia was nearing completion. At the moment, trenching and burying of the linepipe within the GTS first startup complex is close to completion.

The linepipe of the gas trunkline with the length exceeding 1,100 kilometers has passed the robustness test. Natural gas is being fed to the gas pipeline sections stretching for more than 800 kilometers (process operation preceding the GTS commissioning).

Startup operations have been successfully performed at the gas distribution station (GDS) in Vladivostok. The inter-settlement gas pipeline connecting the GDS to the Russky Island with a lateral to CHPP-2 in Vladivostok is ready for gas supplies: the gas pipeline is constructed including the first string of the submerged crossing under the Eastern Bosphorus Strait. Construction of the gas pipeline from a gas distribution station to

CHPP-1 with a lateral to the Severnaya boiler house is underway.

Based on the meeting results, the tasks were given to ensure timely delivery of Gazprom's investment projects in the Far East.

Watchdog: Gazprom's unauthorized spending nears $1bn in 2009

http://www.rbcnews.com/free/20110901175443.shtml

      RBC, 01.09.2011, Moscow 17:54:43.Gazprom's unauthorized spending, losses of funds and tangible assets exceeded RUB 28bn (approx. USD 968m) in 2009, the Audit Chamber said in a report today.

      Gazprom has taken measures to rectify violations, return assets and overpaid funds, the parliament's watchdog noted.

      The gas giant's investment program amounted to RUB 745.5bn (approx. USD 25.77bn) in 2009, including RUB 475.6bn (approx. USD 16.44bn) of capital expenditures.

Gazprom 'lost' $1 billion in 2009 - Audit Chamberhttp://en.rian.ru/russia/20110901/166357589.html

18:18 01/09/2011

MOSCOW, September 1 (RIA Novosti)

Gazprom lost or illegally spent 28 billion rubles (about $1 billion) in 2009, the Audit Chamber said on Thursday following a check of the Russian gas giant.

"The monitoring of internal audit services' operations showed that illegal spending and losses of money and valuables worth over 28 billion rubles was revealed in subsidiaries in 2009 alone, a number of employees were held liable for damage and subjected to disciplinary liability (deprived of bonuses, reprimanded, downgraded or relieved of office)," the Chamber said in a report.

It also said that Gazprom was working to remedy the failures and prevent them in future, and had made steps to recover lost assets and return overpaid sums of money.

Gazprom Neft: Small field in Orenburg bought; larger acquisitions expected this month

http://www.bne.eu/dispatch_text16480

UralSibSeptember 2, 2011

Field with 180 mln bbl of reserves added. Gazprom Neft (SIBN RX - Hold) has bought 100% of a company which owns the license to the Tsarichansk field in the Orenburg region. Gazprom Neft estimates the field's recoverable reserves at around 180 mln bbl (25 mln tons), equal to 2% of the company's proven oil & gas reserves. The acquisi- tion price has not been disclosed.

More important acquisition may follow. Production at Tsarichansk alone will probably be limited to 25,000 bpd at best, or 2% of Gaz- prom Neft's current production, and would reach this plateau by 2013-14. However, Gazprom Neft is preparing for a larger acquisi- tion, that of the East Orenburg field, from Gazprom; Gazprom Neft has worked as an operator at the field since 2010. Press reports sug- gest that this deal may be closed in December. East Orenburg could contribute up to 6% to Gazprom Neft's output from 2014, in our view.

Potential trigger. The impact on Gazprom Neft's valuation will depend on the acquisition prices for Tsarichanskoye and East Orenburg, though the latter would signal that the long-awaited transfer of licenses from Gazprom to its oil subsidiary has begun, and serve as a catalyst for Gazprom Neft. We have a Hold recommendation on the stock.

Alexei Kokin

Russia Gazprom Neft buys oilfield with 25 mln T of reserveshttp://af.reuters.com/article/commoditiesNews/idAFL5E7K11PM20110901

Thu Sep 1, 2011 1:23pm GMT

MOSCOW, Sept 1 (Reuters) - Gazprom Neft , the oil arm of Russia's gas exporting monopoly Gazprom , said on Thursday it has acquired the licence holder of an oil field with recoverable reserves of over 25 million tonnes (183 million barrels).

The company said the Tsarichanskoye field is located in Orenburg region at the southern end of the Ural mountains, which Gazprom Neft sees as a new hub of oil production.

It did not say how much it paid for the upstream asset. (Reporting By Vladimir Soldatkin)

09/01/2011 | 01:40 pm

JSC Gazprom Neft : Gazprom Neft acquires a deposit in the Orenburg regionhttp://www.4-traders.com/JSC-GAZPROM-NEFT-6494696/news/JSC-GAZPROM-NEFT-Gazprom-Neft-acquires-a-deposit-in-the-Orenburg-region-13779417/

Gazprom Neft acquires a deposit in the Orenburg region1 September 2011 The Gazprom Neft Group has acquired 100% of ZAO Centre of Science-Intensive Technologies, which holds exploration and production licenses for hydrocarbons in the Tsarichanskoye field – the largest of those discovered in the Orenburg region in recent years. According to Gazprom Neft’s estimates, recoverable hydrocarbon reserves in the field may exceed 25 million tons.

“Gazprom Neft is familiarising itself with a new territory – the Orenburg region, which will become, in the long run, another oil production center for the company. Gazprom Neft is planning to expand its presence in the region, both through the development of the underlying asset – the Eastern part of the Orenburg field, and through engaging other blocks to ensure a synergistic effect”, - said Vadim Yakovlev, the First Deputy General Director of Gazprom Neft.

REFERENCE:

The Tsarichanskoye field is located in an area with a developed infrastructure, relatively close to the Eastern part of the Orenburg oil and gas condensate field. The license for the development of the Tsarichanskoye field was obtained in 2007 and issued for a period of 20 years. Since 2010, a subsidiary of Gazprom Neft – Gazpromneft Angara – has been working in the Eastern part of the Orenburg field under a management contract. Soon to be completed is the anticipated acquisition by Gazprom Neft of the license holder for the Eastern part of the Orenburg field – Gazprom Neft Orenburg.