Russia 110621

Basic Political Developments ITAR-TASS news digest of June 21: 1.

o MOSCOW - - Russia is sending a consignment of humanitarian aid to Cote d’Ivoire, officials at the Ministry for Emergency Situations and Civil Defense /EMERCOM/ told Itar-Tass Monday.

o WASHINGTON - - Executive Board of the International Monetary Fund has approved a three-year $ 106 program of lending to Kyrgyzstan “to support the economic recovery in the short term and place the country on the road to stronger sustained and inclusive growth in the medium term.” The approval of the lending program by the IMF opens the doors to an immediate allocation of the first tranche in the amount of $ 15 million to the government in Bishkek.

o MOSCOW - - Ukraine’s President Viktor Yanukovich will brief members of the Parliamentary Assembly of the Council of Europe on democratic freedoms in his country, a PACE spokesman told Itar-Tass.

o RIO DE JANEIRO - - Citizens of Russia and Peru will need no visas to travel to each other’s country.

o MOSCOW - - Moscow on Tuesday will host the talks in the five plus two format addressing the resumption of the Dniester conflict settlement. The talks will bring together representatives of Moldova, the Dniester region, Russia, the United States, Ukraine, the Organization for Security and Cooperation in Europe and the European Union.

o PARIS - - Prime Minister Vladimir Putin arrived in France on a working visit on Monday evening. He will visit on Tuesday the Russian exposition at Le Bourget International Air Show near Paris, will have talks with French President Nicolas Sarkozy and premier Francois Fillon.

o LE BOURGET - - Helicopters Mi-17V5, which the US army contracted for Afghanistan, will be delivered before the end of 2012. The contract between the Command of the US Ground Troops and the Russian main arms exporting company Rosoboronexport envisages the production and delivery of 21 new military transport helicopters Mi-17V5. The first helicopters will be exported at the end of 2011, the supply of other helicopters will be made during 2012. Rosoboronexport representatives confirmed these deadlines to ARMS-TASS at the 49th Paris Air Show in Le Bourget.

o LE BOURGET - - Following the second stage of restructuring of Russia’s rocket-space industry, it will consist of 3-4 holdings, which will be united depending on their specialisation, Head of the Federal Space Agency /Roskosmos/ Vladimim Popovkin told reporters during the 49th International Paris Air and Space Show on Tuesday.

o LE BOURGET - - Russia will allocate 402 billion roubles for the GLONASS Federal special programme, Head of the Federal Space

Agency /Roskosmos/ Vladimim Popovkin told reporters during the 49th International Paris Air and Space Show on Tuesday.

o LE BOURGET - - Despite certain negative matters, Russia will not correct its plans for the military-technical cooperation for the current year, Head of the Federal Military-Technical Cooperation Service Alexander Fomin told reporters during the 49th International Paris Air and Space Show on Tuesday.

o MOSCOW - - Russia’s President Dmitry Medvedev ordered the government and the Krasnodar Territory administration to provide ecology safety during preparations for the Olympic Games in Sochi and to follow strictly the responsibilities as in the Sochi-2014 application.

o LE BOURGET - - A conversion booster Dnepr with the Ukrainian satellite Sich-2 will be launched from the Yasny launch site in the Orenburg Region, the chief of the Federal Space Agency (Roskosmos) Vladimir Popovkin told reporters at the 49th Paris Air Show here on Tuesday.

o SAMARA - - The 25th meeting of the permanent seminar at the Parliamentary Assembly of the Belarus and Russia Union on issues of building the Union State is opening in Samara on Tuesday. As the press service of the government of the Samara Region reported, the meeting is devoted to problems and priorities of environmental protection, issues of ecological education.

o MOSCOW - - Russian President Dmitry Medvedev has expressed condolences to the relatives of those killed in a Tu-134 crash near the city of Petrozavodsk in North Western Russia, Medvedev’s press secretary Natalia Timakova said on Tuesday.

o MOSCOW - - The seventh annual international conference “Infrastructure of civil aviation” is opening in Moscow on Tuesday.

o MOSCOW - - Russia’s Finance Ministry’s civil council started working on Tuesday.

PUTIN IN FRANCE o Putin arrives in France to visit Le Bourget air show & for talks. o Putin arrives in France, has informal meeting with premier.

49TH PARIS AIR SHOW o RF to supply copters US contracted for Afghanistan before end 2012. o First launch of RF rocket Soyuz-ST from Kourou may be made Oct 20. o Russia to keep military-technical cooperation pace 2011 - view. o Russia’s rocket-space industry to have 3-4 holdings - view. o Russia might launch one or two "Rokot" booster rockets in 2011. o Conversion booster Dnepr to be launched with Ukraine satelliteo Russia, Kazakhstan to develop KazSat-3 satelliteo Russia to allocate 402 billion roubles for GLONASS project to 2020.

Energia not to produce Soyuz spaceship for space tourists. Moscow talks to focus on resumption of Dniester settlement process. - The talks

will bring together representatives of Moldova, the Dniester region, Russia, the

United States, Ukraine, the Organization for Security and Cooperation in Europe and the European Union.

US lures Russia into WTO - Russia’s WTO membership will automatically lead to the Jackson-Vanik amendment being abolished because it would become disadvantageous for American companies, stressed Robert D. Hormats, US under secretary for economic, energy and agricultural affairs, speaking at Carnegie Hall in Washington on Monday.

Azerbaijani, Russian deputy foreign ministers discuss bilateral relations Russia, Peru officially abolish visa regime.

o Visa-free travel agreement between Russia and Peru comes into force TU-134 PLANE CRASH PETROZAVODSK

o Update: Plane crash in northwest Russia kills 44, including 8 foreigners o Medvedev orders investigation of deadly Tu-134 crasho Investigators probing three theories behind Petrozavodsk air crasho Chinese president sends condolences to Russian counterpart over fatal

plane crasho Russian president condoles with air crash victims’ families. o At least 44 killed in Russian plane crasho Six Petrozavodsk plane crash survivors to be flown to Moscow o Hydropress’ three leading experts die in Tu-134 plane crash. o Football referee Pettai killed in Karelia air crasho Eight foreigners killed in plane crash in northwestern Russia o Two Ukrainians Killed In Air Crash In Russiao Armenian killed in wreckage of Russian plane near Petrozavodsko EMERCOM confirms Swedish national killed in N W Russia jet crash. o Runway equipment partially out as misfortunate Tu-134 landed. o Condition of 7 survivors of N W Russia jet crash very heavy. o Russian plane crash raises fresh concerns about ageing fleet - The deadly

plane crash in northern Russia on Monday night that left forty four people dead and eight in a critical condition has raised fresh concerns about the airworthiness of Russia’s ageing civil aircraft fleet.

Russia welcomes Abyei agreement in Sudan Moscow concerned about religious tensions in Lebanon West's tough measures against Belarus counterproductive – ministry RF, Belarus to discuss issues of ecology in Samara. Director for Russian-Polish dialogue centre wanted - President Bronislaw

Komorowski signed a bill paving the way for the enterprise in April this year, in the wake of the first anniversary of the Smolensk Air Disaster.

Medvedev orders government to provide ecology safety in Sochi. o Medvedev demands eco safety during Sochi Olympics preparations

FC speaker confirms June 22 vote on prosecutor general's candidacy. - "The FC, at its plenary session on Wednesday, will certainly consider the candidacy of the prosecutor general," Torshin said in an interview to Itar-Tass.

Russian reporter cleared of libeling head of federal youth agency - As he recovered and left intensive care, Kashin said on his blog that he believes

Yakemenko, the founder of the pro-Kremlin Nashi group, frequently criticized by the reporter, could be linked to the attack. Yakemenko responded by suing Kashin for libel.

Police, militants clash in Dagestan's Kizlyar district. o Five law enforcement officers hospitalized after fight in Dagestan

Attempted murder case opened over Asha metallurgical plant blast. - In the morning on June 20 in the rolled steel shop at the Asha metallurgical plant a homemade radio-controlled explosive device exploded.

FSKN busts drug trafficking ring. - The Federal Service for Drug Control and Psychotropic Substances Circulation (FSKN) jointly with the Federal Security Service stopped the activity of a drug trafficking group, which supplied 1.5 tons of methadone to Russian provinces each year, FSKN chief Viktor Ivanov said at a meeting of the State Antidrug Committee on Tuesday.

Number of websites with child pornography tripled. - The Internet users said that the number of websites with child pornography has tripled, Russian Interior Minister Rashid Nurgaliyev said in reply to the questions about cybercrime by visitors at the Russian Interior Ministry website.

Firefighters put out 8 forest fires in Russia's Far East over past 24 hours Russia prepares to launch Progress M-11M space freighter to ISS IATA celebrates 15 Years in Russia

o Int’l conf on civil aviation infrastructure opens in Moscow. Anti-gay rally threatens Russian Pride events in St. Petersburg Interfax Moscow press review for June 21, 2011 RIA Russian Press at a Glance, Tuesday, June 21, 2011 Hermitage Capital calls for Russian inquiry into $330m 'tax frauds' uncovered by

Sergei Magnitsky The Curse of the Crocodile: Russia's Deadly Designer Drug The cyclical nature of Russian-American relations - By Alexei Fenenko For Russia, no news is good news – by Eugene Ivanov Central Asia in stagnation - Anchor of the Rossiiskaya Gazeta (RG) Discussion

Club Yevgeny Shestakov discusses these questions with Ph.D. Alexei Malashenko, professor of history at the National Research University - Higher School of Economics and member of the Research Council of the Carnegie Moscow Center.

National Economic Trends Corporate debt in Russia down 2.6% in April Incomes in Russia fall 7% in May – Rosstat Unemployment in Russia plummets to 6.4% in May – Rosstat Russia boosts fixed investment 7.4% in May, way above forecast FIXED INVESTMENT IN RUSSIA UP 7.4% IN MAY, CONSIDERABLY ABOVE

FORECAST – ROSSTAT Fixed asset investments rise 2% in M5 Russian population falls 66,100 in 4 mths – Rosstat Housing construction in Russia down 7.7% in May, 7.1% in 5 mths RUB marginally weaker against the basket despite VAT and export selling Finance Ministry’s civil council starts working.

Russian spring sowing near end, crop prospects good - Spring wheat sowing 99 percent over; Final grain sowings area seen slightly lower than targeted; Weather favours crop development until June 20; Sunseeds, sugar beet areas above target

Business, Energy or Environmental regulations or discussions OAO Novatek, VTB Group, OAO Lukoil: Russia Equity Preview InterRAO seeks anti-monopoly approval to renationalise TGK4 Russian Copper is investing USD 627 million in Mikheyevsky GOK Petropavlovsk Five-month Production Up 33%, On Track To Deliver 2011 Target Norilsk Nickel to elect new board at AGM on Tuesday NLMK Assets Abroad Frozen Cash-for-clunkers programme draws to an end: Who will be most affected? INTERVIEW: Sergei Petrov - Russia's billionaire car salesman Transportation, construction and infrastructure - Trends in March-April 2011

Activity in the Oil and Gas sector (including regulatory) Lukoil hopes to restart operations at Odessa Oil Refinery this year Alliance Oil, Spain's Repsol to set up joint oil venture Int’l exhibition “Oil and Gas” opens in Moscow.

Gazprom Gazprom to launch Sakhalin-3 Kirinskoye field in '12 Shtokman Start-Up Might Be Delayed Gazprom Neft Selects Schlumberger to Drill in Iraq Heads of Gazprom and SOCAR meet in Moscow Partnership with Azerbaijan ‘strategically important direction’ – Gazprom Beltransgaz Working Conditions Cause Gazprom Headache Rather than its Price Gazprom is not allowed to “manipulate” - The European Commission has blocked

Gazprom’s entry into the capital of the stock exchange for spot gas trading Aleksey Topalov

Gazprom Chases China Pipe Dream - By LIAM DENNING Gazprom on European and Asian gas - Gazprom held a conference call yesterday

entitled Gas Export and Enhancing Reliability of Gas Supply to Europe led by Alexander Medvedev, Deputy Chairman and DG of Gazprom Export. Medvedev also touched on potential gas sales to Asia.

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Full Text Articles

Basic Political Developments

11:52 21/06/2011ALL NEWS

ITAR-TASS news digest of June 21: 1.

http://www.itar-tass.com/en/c154/169554.html

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MOSCOW - - Russia is sending a consignment of humanitarian aid to Cote d’Ivoire, officials at the Ministry for Emergency Situations and Civil Defense /EMERCOM/ told Itar-Tass Monday.

“Following an instruction by the Russian government, EMERCOM is organizing a delivery of humanitarian aide to Abijan in the Republic of Cote d’Ivoire,” an official said.

WASHINGTON - - Executive Board of the International Monetary Fund has approved a three-year $ 106 program of lending to Kyrgyzstan “to support the economic recovery in the short term and place the country on the road to stronger sustained and inclusive growth in the medium term.”

The approval of the lending program by the IMF opens the doors to an immediate allocation of the first tranche in the amount of $ 15 million to the government in Bishkek.

MOSCOW - - Ukraine’s President Viktor Yanukovich will brief members of the Parliamentary Assembly of the Council of Europe on democratic freedoms in his country, a PACE spokesman told Itar-Tass.

The Ukrainian leader arrived in Strasbourg at a special invitation of PACE President Mevlut Cavusoglu.

Yanukovich will answer questions about a civil society, the course of reforms of the country’s judicial system and election legislation, the spokesman said. It is not ruled out that the discussion will focus on the case of ex-premier Yulia Timoshenko.

RIO DE JANEIRO - - Citizens of Russia and Peru will need no visas to travel to each other’s country.

The visa free regime enter into force on Tuesday under the agreement signed between the two countries’ governments on the sidelines of the Asia-Pacific Economic Cooperation summit in Yokohama last November by foreign ministers Sergei Lavrov and Jose Antonio Garcia Belaunde.

The agreement allows Russian and Peruvian citizens to stay in each other’s country 90 days without visas.

MOSCOW - - Moscow on Tuesday will host the talks in the five plus two format addressing the resumption of the Dniester conflict settlement.

The talks will bring together representatives of Moldova, the Dniester region, Russia, the United States, Ukraine, the Organization for Security and Cooperation in Europe and the European Union.

PARIS - - Prime Minister Vladimir Putin arrived in France on a working visit on Monday evening. He will visit on Tuesday the Russian exposition at Le Bourget International Air Show near Paris, will have talks with French President Nicolas Sarkozy and premier Francois Fillon.

LE BOURGET - - Helicopters Mi-17V5, which the US army contracted for Afghanistan, will be delivered before the end of 2012. The contract between the Command of the US Ground Troops and the Russian main arms exporting company Rosoboronexport envisages the production and delivery of 21 new military transport helicopters Mi-17V5. The first helicopters will be exported at the end of 2011, the supply of other helicopters will be made during 2012. Rosoboronexport representatives confirmed these deadlines to ARMS-TASS at the 49th Paris Air Show in Le Bourget.

LE BOURGET - - Following the second stage of restructuring of Russia’s rocket-space industry, it will consist of 3-4 holdings, which will be united depending on their specialisation, Head of the Federal Space Agency /Roskosmos/ Vladimim Popovkin told reporters during the 49th International Paris Air and Space Show on Tuesday.

LE BOURGET - - Russia will allocate 402 billion roubles for the GLONASS Federal special programme, Head of the Federal Space Agency /Roskosmos/ Vladimim Popovkin told reporters during the 49th International Paris Air and Space Show on Tuesday.

LE BOURGET - - Despite certain negative matters, Russia will not correct its plans for the military-technical cooperation for the current year, Head of the Federal Military-Technical Cooperation Service Alexander Fomin told reporters during the 49th International Paris Air and Space Show on Tuesday.

MOSCOW - - Russia’s President Dmitry Medvedev ordered the government and the Krasnodar Territory administration to provide ecology safety during preparations for the Olympic Games in Sochi and to follow strictly the responsibilities as in the Sochi-2014 application.

LE BOURGET - - A conversion booster Dnepr with the Ukrainian satellite Sich-2 will be launched from the Yasny launch site in the Orenburg Region, the chief of the Federal Space Agency (Roskosmos) Vladimir Popovkin told reporters at the 49th Paris Air Show here on Tuesday.

SAMARA - - The 25th meeting of the permanent seminar at the Parliamentary Assembly of the Belarus and Russia Union on issues of building the Union State is opening in Samara on Tuesday. As the press service of the government of the Samara Region reported, the meeting is devoted to problems and priorities of environmental protection, issues of ecological education.

MOSCOW - - Russian President Dmitry Medvedev has expressed condolences to the relatives of those killed in a Tu-134 crash near the city of Petrozavodsk in North Western Russia, Medvedev’s press secretary Natalia Timakova said on Tuesday.

According to Timakova, the president also ordered to render assistance to the survivors in the air crash.

MOSCOW - - The seventh annual international conference “Infrastructure of civil aviation” is opening in Moscow on Tuesday.

“One of the most important aims of the forum is to discuss and estimate the pace of preparations of the country’s airport infrastructure for world-scale mass events: APEC 2012, the Winter Olympiad 2014 and the 21st World Football Championship,” chairman of the organizing committee Alexei Komorov told ITAR-TASS.

MOSCOW - - Russia’s Finance Ministry’s civil council started working on Tuesday.

“Unlike other discussion bodies, the Civil Council will unite exclusively independent experts, and officials will not be its members,” Finance Minister Alexei Kudrin told the first meeting of the new entity.

The council “should not be exclusively a mere supporter of all civil organisations,” he said. “We expect professional dialogue.”

He named key objectives of the council, highlighting “organisation of public discussions of the Finance Ministry’ s initiatives” and explained that it will prepare suggestions on budget, taxation, customs and tariff policies.

PUTIN IN FRANCE

09:30 21/06/2011ALL NEWS

Putin arrives in France to visit Le Bourget air show & for talks.

http://www.itar-tass.com/en/c154/169409.html

21/6 Tass 1

PARIS, June 21 (Itar-Tass) — Prime Minister Vladimir Putin arrived in France on a working visit on Monday evening. He will visit on Tuesday the Russian exposition at Le Bourget International Air Show near Paris, will have talks with French President Nicolas Sarkozy and premier Francois Fillon.

The cabinet head will start his working day with a meeting with activists of the French-Russian Dialogue association, which includes prominent businessmen, politicians, men of science and culture of the two countries.

Then, Putin along with Fillon will participate in an unveiling ceremony of a monument to Russian officers and men of he Russian Expedition Corps that had fought in France during the First World War.

The Russian premier will visit the air show at midday where he will inspect the Russian exposition, represented, inter alia, by the Sukhoy Superject-100 airliner and amphibian plane Be-200.

The present Le Bourget air show is attended by over 2,000 participants from 44 countries, has on display more than 140 civil and military aircraft, most of which participate in daily demonstration flights, including Russian-made planes.

Special attention will be given this year to the development of infrastructure of airports, servicing of planes, re-equipment of their cabins as well as training of crews.

Russia traditionally takes considerable participation in the French aerospace exhibition. The exposition of our country will be even larger this year than in the past. Its area is 1,700 square metres. Exhibitors include 56 Russian organisations which will put on display 262 titles of military and civil products – planes, helicopters and missile arms.

Later in the day, Putin will award Russian state decorations to French cosmonauts who participated in Russian space programmes in various periods, including at the Mir station.

The programme of the French visit by the Russian premier will be rounded off by a meeting with French President Sarkozy.

04:32 21/06/2011ALL NEWS

Putin arrives in France, has informal meeting with premier.

http://www.itar-tass.com/en/c154/169268.html

21/6 Tass 26

PARIS, June 21 (Itar-Tass) — Russia's Prime Minister Vladimir Putin arrived on a working visit in Paris Monday night.

He was taken to a restaurant where he had a working dinner with French Prime Minister Francois Fillon.

The main part of Putin's business itinerary falls on Tuesday. Among other things, he is expected to meet with representatives of the Franco-Russian dialogue association, visit Le Bourget 2011 Air Show and hold talks with French President Nicolas Sarkozy.

49TH PARIS AIR SHOW

09:37 21/06/2011ALL NEWS

RF to supply copters US contracted for Afghanistan before end 2012.

http://www.itar-tass.com/en/c154/169415.html

21/6 Tass 158

LE BOURGET, June 21 (Itar-Tass) —— Helicopters Mi-17V5, which the US army contracted for Afghanistan, will be delivered before the end of 2012. The contract between the Command of the US Ground Troops and the Russian main arms exporting company Rosoboronexport envisages the production and delivery of 21 new military transport helicopters Mi-17V5. The first helicopters will be exported at the end of 2011, the supply of other helicopters will be made during 2012. Rosoboronexport representatives confirmed these deadlines to ARMS-TASS at the 49th Paris Air Show in Le Bourget.

All contracted helicopters will be equipped for night flights. The Geophysics-NV company will equip the helicopters with night vision systems and will adapt the cockpit for night vision spectacles. Along with aircraft, the contract envisages the supplies of spare parts, ground maintenance equipment and logistic support services.

The Kazan helicopter plant, which executes the contract, began assembling the first helicopter. After the first helicopter is handed over to the contractor the plant will produce the whole batch of contracted helicopters.

After the first contract the US army may contract some more helicopters for Afghanistan, Rosoboronexport Director General Anatoly Isaikin said.

10:02 21/06/2011ALL NEWS

First launch of RF rocket Soyuz-ST from Kourou may be made Oct 20.

http://www.itar-tass.com/en/c154/169434.html

21/6 Tass 163

LE BOURGET, June 21 (Itar-Tass) —— The first launch of a Russian booster Soyuz-ST from the Kourou spaceport in French Guiana may be made on October 20, the chief of the Federal Space Agency (Roskosmos) Vladimir Popovkin told reporters at the 49th Paris Air Show here on Tuesday.

“We have no problems with the booster. We are ready to launch it,” Popovkin noted. “The European Space Agency is planning that the booster will carry two Galileo navigation satellites as a payload. They are not ready. Therefore, the ESA set the date of their launch on October 20,” he noted.

The Roskosmos chief noted that he met with the head of the French Space Agency CNES Yannick d’Escatha on Monday. “We discussed the synchronization of our work. We are forming a launch team and are taking additional tests at the Kourou spaceport so far,” Popovkin underlined.

10:30 21/06/2011ALL NEWS

Russia to keep military-technical cooperation pace 2011 - view.

http://www.itar-tass.com/en/c154/169463.html

21/6 Tass 172

LE BOURGET, June 21 (Itar-Tass) —— Despite certain negative matters, Russia will not correct its plans for the military-technical cooperation for the current year, Head of the Federal Military-Technical Cooperation Service Alexander Fomin told reporters during the 49th International Paris Air and Space Show on Tuesday.

“According to our plans, the results of the current year should be higher than those of the past year,” he said. “At the same time, we are facing consequences of the global economic crisis, well-known events in several Arab countries, and still the plans are not to be changed.”

Among Russia’s major partners in the military and technical cooperation, Fomin named India, Vietnam, Algeria, Venezuela, and China.

“Event in certain Arab countries cannot live unaffected our cooperation with them,” he said. “But there are abandoned markets, for example in Africa, to where we should return.”

Russia should use more actively the potential of Latin America. Over past few years, we opened for example markets of Uruguay and Argentina, he added.

10:07 21/06/2011ALL NEWS

Russia’s rocket-space industry to have 3-4 holdings - view.

http://www.itar-tass.com/en/c154/169437.html

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LE BOURGET, June 21 (Itar-Tass) —— Following the second stage of restructuring of Russia’s rocket-space industry, it will consist of 3-4 holdings, which will be united depending on their specialisation, Head of the Federal Space Agency /Roskosmos/ Vladimim Popovkin told reporters during the 49th International Paris Air and Space Show on Tuesday.

Reporters asked if the restructuring programme for Russia’s rocket-space industry will be corrected. Earlier, the restructuring organised 14 holdings. Popovkin said that during the first stage, which structured the holdings, quite often major enterprises acquired others.

“At the second stage we shall unite them depending on what they produce, which means that one holding will unite those producing rockets, another one – those producing satellites, and so on,” he said. “Managing companies will run such holdings, which will make 3-4.”

10:07 21/06/2011ALL NEWS

Russia might launch one or two "Rokot" booster rockets in 2011.

http://www.itar-tass.com/en/c154/169436.html

21/6 Tass 167

LE BOURGET, June 21 (Itar-Tass) — Head of Russia's Roskosmos Federal Space Agency Vladimir Popovkin said one or two launches of the "Rokot" booster rocket were possible this year. He was speaking to reporters at the 49th Paris Air Show.

Russia suspended the launches of this type of rocket from the Plesetsk cosmodrome after a faulty accelerator unit placed the GEO-IK 2 satellite into off-design orbit in the beginning of 2011. "Problems with the "Rokot" occurred outside of radio visibility from the Russian territory," Popovkin reminded journalists, "so we cannot name a definite cause of the irregular operation of the accelerator unit."

Before resuming the launches of "Rokots," it is necessary to run a range of checks. "By the end of this year we'll launch one, possibly two rockets of this type," Popovkin said.

Roskosmos and space agencies of a number of countries have set up a working group to determine the immediate goals of space exploration. "Space exploration should have the high goal to which we should strive. It should be both ambitious and feasible through international cooperation."

The recent meetings with space agency chiefs were devoted to "determining this objective."

"We set up a working group including experts from Roskosmos, the USA's NASA, Europe's ESA and the space agencies of France and Germany whose task is to formulate this objective and determining the key stages in attaining it.

"Certain elements related to reaching this objective, should become part of the Russian space program. This concerns the delivery vehicles intended for the Vostochny cosmodrome, to avoid the situation where these booster rockets will not be needed," the Roskosmos chief said.

According to Popovkin, the new Russian Soyuz-1 light class booster rocket will be launched from the Plesetsk cosmodrome in the first half of 2012. He named two reasons behind the postponement of the fist launch of the Soyuz-1, initially planned for 2011.

"Firstly, it is necessary to carry out firing trials of the rocket. Secondly, the payload, i.e. the "Lomonosov" satellite of the Moscow State University, is not ready yet. It should be ready in April 2012.

"As for the Angara advance light class booster, its first trial launch is scheduled for 2013. Prior to that, we plan one launch of the South Korean KSLV-I booster, equipped with the first stage of the Angara.

"The Defense Ministry settled all the issues of funding the construction of the Angara launch complex at the Plesetsk cosmodrome," Popovkin said.

Russia might use the Briz-M accelerator unit to launch a Proton-M booster with three GLONASS satellites from the Baikonur cosmodrome later this year. The accelerator unit will replace the DM-03 model. In December 2010, Russia lost three GLONASS satellites because of DM-03 refueling.

"This year, there is possibility to launch a Proton from Baikonur with three GLONASS units. A decision has been made that the Proton will be equipped with a Briz-M unit. This decision is now being coordinated at the Defense Ministry.

"As for the DM-03 unit, it is undergoing scheduled procedures, which will take some time," the Roskosmos director said.

10:51 21/06/2011ALL NEWS

Conversion booster Dnepr to be launched with Ukraine satellite

http://www.itar-tass.com/en/c154/169484.html

21/6 Tass 171

LE BOURGET, June 21 (Itar-Tass) —— A conversion booster Dnepr with the Ukrainian satellite Sich-2 will be launched from the Yasny launch site in the Orenburg Region, the chief of the Federal Space Agency (Roskosmos) Vladimir Popovkin told reporters at the 49th Paris Air Show here on Tuesday.

In reply to a question about the prospects of the Dnepr launch project, under which heavy intercontinental ballistic missiles RS-20 (Satan in Western qualification) are launched with the payload put into space for scrapping, Popovkin noted that “we together with the Ukrainian National Space Agency decided to troubleshoot the missiles involving Ukrainian specialists.”

“This work is being done and a decision will be taken upon its results. With due account of Ukrainian insistent requests the Dnepr booster was decided to launch with the Ukrainian satellite Sich-2,” Popovkin underlined.

Russia, Kazakhstan to develop KazSat-3 satellitehttp://www.brahmand.com/news/Russia-Kazakhstan-to-develop-KazSat-3-satellite/7334/3/13.html

Posted On: Jun 21, 2011PARIS (BNS): Russia and Kazakhstan have signed a contract on Monday to develop third Kazakh satellite KazSat-3 for Kazakhstan.

The contract was signed between Russian Reshetnev Information Satellite Systems Company and Kazakhstan's National Center of Space Communications (RTSKS) at Paris Air Show, Le Bourget, Paris.

The signing of the contract was witnessed by Roscosmos Head V.Popovkin, Kazcosmos Chairman T.Musabaev, TAS Head R. Seznec.

The contract confirms strategic partnership between Russia and Kazakhstan under space exploration programmes, he said.

In addition, ISS and Thales Alenia Space have signed a subcontract to produce KazSat payload items.

10:23 21/06/2011ALL NEWS

Russia to allocate 402 billion roubles for GLONASS project to 2020.

http://www.itar-tass.com/en/c154/169454.html

21/6 Tass 173

LE BOURGET, June 21 (Itar-Tass) —— Russia will allocate 402 billion roubles for the GLONASS Federal special programme, Head of the Federal Space Agency /Roskosmos/ Vladimim Popovkin told reporters during the 49th International Paris Air and Space Show on Tuesday.

“All applications we filed are satisfied,” he said. However, “it is not clear when the money will be allocated.”

“In some cases we may borrow money,” he added.

Russia’s government has allocated means for the Federal space programme for 2012 and two following years, Popovkin explained. As for the GLONASS project to 2020, it “would require 402 billion roubles.

The money will be spent on “support of the orbit group, design of necessary navigation maps, and for additional equipment.”

As for the latter, the industry may attract private investments, he added.

10:23 21/06/2011ALL NEWS

Energia not to produce Soyuz spaceship for space tourists.

http://www.itar-tass.com/en/c154/169455.html

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LE BOURGET, June 21 (Itar-Tass) —— The Energia aerospace corporation will not produce another piloted spaceship Soyuz-TMA for space tourists, the chief of the Federal

Space Agency (Roskosmos) Vladimir Popovkin told reporters the 49th Paris Air Show here on Tuesday.

“New space tourists cannot be put into space onboard the Soyuz spaceship in the near future. The Energia aerospace corporation has a very intensive schedule of piloted flights. We do not see any opportunity to produce more spaceships,” Popovkin said.

Speaking on a probable development of a manned spaceship for space tourists by private companies, Popovkin did not rule out this opportunity. “The space tourism is business. It requires some investments. As for Roskosmos, the agency is not going to develop a spaceship for space tourists,” he noted.

Some media reported earlier about the designing of another Soyuz spaceship in Energia with a qualified spaceman – the spaceship commander and two space tourists.

Energia launches four manned spaceships Soyuz and 4-5 freighters Progress annually over an ISS crew increased to six crewmembers.

09:10 21/06/2011ALL NEWS

Moscow talks to focus on resumption of Dniester settlement process.

http://www.itar-tass.com/en/c154/169393.html

21/6 Tass 7

MOSCOW, June 21 (Itar-Tass) — Moscow on Tuesday will host the talks in the five plus two format addressing the resumption of the Dniester conflict settlement.

The talks will bring together representatives of Moldova, the Dniester region, Russia, the United States, Ukraine, the Organization for Security and Cooperation in Europe and the European Union.

Russia’s Foreign Ministry expressed the hope that the upcoming consultations “will allow to reach agreement on the resumption of official negotiations between the countries.” Moscow calls for resolving the problem within the framework of Moldova’s territorial integrity and a special political status of the Dniester region.

Russian Foreign Minister Sergei Lavrov noted earlier that over the past five years the talks in the five plus two format did not focus on political issues and resolved only daily problems.

“We are determined to resume the process of political settlement,” Lavrov said. “It will take much efforts for rapprochement of Chisinau and Tiraspol’s positions.”

Moldovan Foreign Minister Iurie Leanca noted that “the talks on the Dniester conflict settlement should begin without any preliminary conditions.” Chisinau is conducting the talks on the Dniester conflict settlement with partners from East and West.

“We share common views with Russia on some moments of the Dniester conflict,” Leanca said.

The leader of the Dniester region, Igor Smirnov, underlined that “at the upcoming meeting in Moscow we will insist on concluding an agreement on the normalization of relations, on the non-use of force and full economic independence from Moldova.”

RT News line, June 21

US lures Russia into WTOhttp://rt.com/news/line/2011-06-21/#id12651

05:31

Russia’s WTO membership will automatically lead to the Jackson-Vanik amendment being abolished because it would become disadvantageous for American companies, stressed Robert D. Hormats, US under secretary for economic, energy and agricultural affairs, speaking at Carnegie Hall in Washington on Monday. This could be done after US Congress had granted the American president the authority to prolong normal trading relations with Russia, which could not be done while the Jackson-Vanik amendment is in effect.

Azerbaijani, Russian deputy foreign ministers discuss bilateral relationshttp://en.trend.az/news/politics/1894271.html

21.06.2011 10:33

Azerbaijan, Baku, June 21 / Trend, E. Tariverdiyeva /

The State Secretary - Russian Deputy Foreign Minister Grigory Karasin and Azerbaijani Deputy Foreign Minister Khalaf Khalafov held a telephone conversation on the Russian side’s initiative on Monday, June 20, the Russian Foreign Ministry’s website reported.

The sides discussed a number of topical issues of the Russian-Azerbaijani relations and mapped out joint measures to promote bilateral cooperation.

Do you have any feedback? Contact our journalist at trend@trend.az

08:53 21/06/2011ALL NEWS

Russia, Peru officially abolish visa regime.

http://www.itar-tass.com/en/c154/169374.html

21/6 Tass 5

RIO DE JANEIRO, June 21 (Itar-Tass) — Citizens of Russia and Peru will need no visas to travel to each other’ s country.

The visa free regime enter into force on Tuesday under the agreement signed between the two countries’ governments on the sidelines of the Asia-Pacific Economic Cooperation summit in Yokohama last November by foreign ministers Sergei Lavrov and Jose Antonio Garcia Belaunde.

The agreement allows Russian and Peruvian citizens to stay in each other’s country 90 days without visas.

It is worth noting that earlier Russian tourists were able de facto visit Peru without visas. However, this fact was not legally fixed in the two countries’ relations.

“The intergovernmental agreement with Peru confirms our foreign political course for transparency and development of humanitarian contacts,” Russian ambassador to Peru, Nikolai Sofinsky, told Itar-Tass.

The diplomat recalled that “Russia has been introducing such visa-free regimes with many countries, conducting relevant talks with the European Union and studying opportunities for the abolition of visas with the United States.”

“Stronger cultural and humanitarian contacts mean expanded opportunities for business and communication among business circles,” the ambassador said.

“The official abolition of visas should exert a positive effect on tourist exchanges,” the more so Peru is known for its historical, cultural and natural sites.

“By the way, this year the 100th anniversary of rediscovery of famous archaeological site Machu Picchu that is considered one of the most important tourist attractions around the world is widely celebrated,” Sofinsky said.

Russian citizens can also travel without visas to such countries of South America as Argentina, Brazil, Venezuela and Ecuador.

Visa-free travel agreement between Russia and Peru comes into forcehttp://en.rian.ru/world/20110621/164735644.html

03:33 21/06/2011

MOSCOW, June 21 (RIA Novosti)

A 2010 agreement between Russia and Peru on visa-free short-term travel comes into effect on Tuesday.

The agreement between the two governments was signed on November 13, 2010 in Japan's Yokohama.

Under the agreement, Russian and Peruvian tourists are not required visas for entry, exit, transit or stay on the territory of another state for up to 90 days within each 180-day period from the first entry.

Many states in Latin America scraped visa requirements for Russian citizens, including Venezuela, Colombia, Cuba, Nicaragua, Ecuador, the Dominican Republic, Argentina, Guatemala and Brazil.

TU-134 PLANE CRASH PETROZAVODSK

Update: Plane crash in northwest Russia kills 44, including 8 foreignershttp://en.rian.ru/russia/20110621/164740565.html

11:33 21/06/2011

MOSCOW, June 21 (RIA Novosti)

Forty-four people, including eight foreigners, were killed when a Tu-134 passenger aircraft crashed in Russia's northwestern republic of Karelia, an Emergency Situations Ministry spokesman said on Tuesday.

The RusAir plane was en route from Moscow to Petrozavodsk when it crash landed on a highway one kilometer (0.6 miles) away from Petrozavodsk's airport, which was shrouded in fog. The aircraft broke up and burst into flames on impact.

Eight of the 52 people on board survived and were taken to local hospitals. A Health

Ministry official said six were well enough to be transferred to hospitals in Moscow.

"Health Ministry doctors have completed their examination of the victims. According to preliminary information, six people will be transported to Moscow for further treatment," said Sofia Malyavina, assistant to the health and social development minister.

She added that two patients - a man and a 10-year-old child - were in serious condition, so the decision on moving them to Moscow had not yet been made.

Sergei Goncharov, the head of the Health Ministry's National Center for Disaster Medicine, said earlier that a child had undergone vascular surgery at the Children's Hospital of the Republic of Karelia.

The rest of the survivors have also received medical treatment, the official said.

One crew member, female flight attendant Yulia Skvortsova, survived, a RusAir spokesperson said.

Russia's Emergencies Ministry said that that among those killed in the crash were four foreigners - one Swedish and one Dutch citizen and two Ukrainians - and a family of four with dual Russian-U.S. citizenship.

Police and air crash investigators are at the scene. Russian Investigative Committee spokesman Vladimir Markin said various possible causes for the accident are being studied, including human error. He added that a criminal case into the crash has been launched.

Media have reported that the plane may have hit high-voltage power lines, but a local emergencies official said there were no such electricity lines in the vicinity of the crash site.

"Investigators are working at the site, but as far as I know, there are no high-power electric lines in the area that could have been destroyed by the plane," the source said.

The plane took off from Moscow at 22:30 local time (18:30 GMT) on Monday and was due to arrive in Petrozavodsk at 00:04 on Tuesday (20:04 GMT Monday).

According to russianplanes.net, it entered service in 1980 and had 40,000 hours of flying time. It was mothballed in 2009 but was brought back into use by RusAir in March 2011.

RT News line, June 21

Medvedev orders investigation of deadly Tu-134 crashhttp://rt.com/politics/news-line/2011-06-21/#id12657

10:29

President Medvedev has expressed condolences to the families and friends of people killed in a Tu-134 crash in Karelia, northwestern Russia, and ordered an investigation into the accident. Late on Monday, the aircraft flying from Moscow crashed as it attempted to land near the airport of Petrozavodsk. Forty-four of the 52 people aboard were killed. On Dmitry Medvedev’s commission, Russia’s Transportation Minister Igor Levitin is on the way to start investigating what caused the crash.

Investigators probing three theories behind Petrozavodsk air crashhttp://www.kyivpost.com/news/russia/detail/107154/

Today at 09:57 | Interfax-Ukraine Moscow, June 21 (Interfax) - The Russian Investigative Committee is probing several theories as part of a criminal inquiry into the Tu-134 plane crash near Petrozavodsk.

"Investigators are looking at several theories behind the crash: a human factor, that is an error of the pilot or the airport ground services, a technical failure in the aircraft or in airport's equipment and so on," IC spokesman Vladimir Markin told Interfax.

As a result of a crash landing by the Tu-134 airliner near Petrozavodsk in the early hours of Tuesday 44 people were killed and eight sustained various injuries.

Read more: http://www.kyivpost.com/news/russia/detail/107154/#ixzz1PtQd2oEc

Chinese president sends condolences to Russian counterpart over fatal plane crashhttp://news.xinhuanet.com/english2010/china/2011-06/21/c_13941624.htm

2011-06-21 13:59:41

BEIJING, June 21 (Xinhua) -- Chinese President Hu Jintao on Tuesday extended condolences to his Russian counterpart Dmitry Medvedev over a fatal plane accident which occurred Monday in northwestern Russia.

Hu, on behalf of the Chinese government and people, mourned those killed in the accident, offered sincere condolences to the families of the victims, and wished the injured an early recovery.

Chinese Premier Wen Jiabao, on the same day, sent condolences to his Russian counterpart Vladimir Putin over the accident.

Latest reports said a total of 44 people were killed and another eight severely injured, when a Russian Tu-134 passenger plane crash-landed near Petrozavodsk, capital of Russia's Republic of Karelie.

11:30 21/06/2011ALL NEWS

Russian president condoles with air crash victims’ families.

http://www.itar-tass.com/en/c154/169528.html

21/6 Tass 197

MOSCOW, June 21 (Itar-Tass) — Russian President Dmitry Medvedev has expressed condolences to the relatives of those killed in a Tu-134 crash near the city of Petrozavodsk in North Western Russia, Medvedev’s press secretary Natalia Timakova said on Tuesday.

According to Timakova, the president also ordered to render assistance to the survivors in the air crash.

“Minister of Transport Igor Levitin informed the president over the phone about the situation at the scene of the crash,” she said. “The minister is leaving for Karelia to join investigation into the accident.”

“Emergencies Minister Sergey Shoigu told the president about measures taken to help those who have survived the crash,” she went on. According to the press secretary, Medvedev wished the survivors the soonest recovery.

The president instructed the Ministry of Health and Social Development to offer assistance to the families of those killed in the crash.

In the mean time, the head of the republic of Karelia, Andrei Nelidov, promised to pay one-million-rouble allowances to the families of those killed in the air crash, and 500,000 roubles to the families of each of the survivors.

A Tu-134 airplane of the Rusair air carries made a cash landing on a highway near the airport in the city of Petrozavodsk at about midnight on Monday. The plane, which was performing a flight from Moscow, had 52 people onboard, 44 of them were killed, and eight were injured. Medics say seven out of these eight are in grave condition.

The plane landed only one kilometre off the runway. It furrowed 150 meters of forest edge and stopped some 20 meters off cottages in a holiday village.

At least 44 killed in Russian plane crashhttp://in.reuters.com/article/2011/06/21/idINIndia-57811720110621

7:47am IST

BESOVETS, Russia (Reuters) - At least 44 people were killed when a passenger plane broke up and caught fire on coming into land in heavy fog in north-western Russia, an Emergency Ministry spokeswoman said on Tuesday.

The Tupolev-134 plane, carrying 52 people including nine crew, crashed near a road about 1 km (0.6 miles) from the runway at the Besovets airport outside the northern city of Petrozavodsk at about 11.40 p.m. local time (1940 GMT) on Monday.

"The preliminary information is that 44 people were killed," spokeswoman Irina Andriyanova said by telephone. "Eight people were injured and seven of them are in a very grave condition."

The www.lifenews.ru Internet news website, which posted a full list of the passengers, said a 10-year-old boy named Anton had survived the crash but gave no details about his condition.

"We took a child to the local hospital -- the child was in a very grave condition," a medical worker told a local television crew at the scene. She said a total of five people were taken to hospital.

A video made by a witness on her mobile phone, and filmed by the television crew, showed flames soaring from the wreckage into the night sky near where the plane crashed, in the region of Kareliya about 700 km (430 miles) north-west of Moscow.

"Everything was on fire," a witness who declined to give his name told the television crew. A photographer at the scene saw charred wreckage from the plane and dozens of emergency workers and firemen.

The crash comes on the eve of the Paris Air Show which Russian Prime Minister Vladimir Putin is due to attend.

Russian President Dmitry Medvedev, who has swapped his Tupolev for a French-made executive jet, in April criticised flaws in domestically-built planes and the nation's poor safety record.

One of the most high-profile Tupolev air disasters in recent times occurred in April 2010 when Polish President Lech Kaczynski's official Tupolev Tu-154 plane crashed near Smolensk airport in western Russia, killing 96 people including Kaczynski, his wife and a large number of senior officials.

The Tu-134 plane that crashed on Monday was operated by the private company RusAir and was travelling from Moscow's Domodedovo airport. RusAir, which specialises in charter flights, declined immediate comment.

Most of the passengers were Russian but a Swedish national was also on the aircraft, Interfax news agency said.

The Tuploev-134 is a Soviet aircraft whose maiden flight was in 1967. It was unclear when the plane which crashed was made.

The aircraft's black boxes have been recovered.

(Writing by Guy Faulconbridge, Editing by Elizabeth Fullerton)

Six Petrozavodsk plane crash survivors to be flown to Moscowhttp://en.rian.ru/russia/20110621/164737983.html

09:56 21/06/2011

MOSCOW, June 21 (RIA Novosti)

Six of the survivors of the plane crash outside Petrozavodsk in northwestern Russia will be flown to Moscow for further hospital treatment, a Health Ministry official said on Tuesday.

The RusAir Tu-134 crash landed on a highway about a kilometer away from Petrozavodsk's airport. Forty-four of the 52 people on board the plane died. The survivors were taken to hospitals in Petrozavodsk, the capital of the republic of Karelia.

"Health Ministry doctors have completed their examination of the victims. According to preliminary information, six people will be transported to Moscow for further treatment," said Sofia Malyavina, assistant to the health and social development minister.She added that two patients - a man and a 10-year-old child - were in serious condition, so the decision on moving them to Moscow had not yet been made.

Rossiya 24 news channel reported that the survivors include one child, identified only as Anton. Sergei Goncharov, the head of the Health Ministry's National Center for Disaster Medicine, said the boy was still in an operating theater at the Children's Hospital of the Republic of Karelia, where he had undegone vascular surgery.

The rest of the survivors have also received medical treatment, the official said.

An Emergencies Ministry Il-76 arrived in Petrozavodsk at 06:39 [02:39 GMT] with a group of Centrospas doctors and ministry psychologists. The plane has three mobile units for transporting seriously ill patients.

The RusAir flight left Moscow for Petrozavodsk at 22:30 on Monday. Contact was lost with the plane at 23:40.

Various crash versions are being studied at the moment including a human factor, said Russian Investigative Committee spokesman Vladimir Markin, adding that a criminal case into the crash has been launched.

Rescuers working at the crash site have already discovered both flight recorders from the aircraft.

Tu-134 aircraft entered service in 1967 to become the most widely used airliner in the Soviet Union. It is capable of carrying 76 passengers.

12:19 21/06/2011ALL NEWS

Hydropress’ three leading experts die in Tu-134 plane crash.

http://www.itar-tass.com/en/c154/169597.html

21/6 Tass 232

MOSCOW, June 21 (Itar-Tass) —— The crush of the Tu-134 plane near the city of Petrozavodsk killed three leading experts who worked at the Hydropress design bureau, part of the Rosatom Concern, a spokesman of Hydropress said on Tuesday.

Among the passengers who left Moscow for Petrozavodsk the night earlier, there were director general and designer general, Sergei Ryzhov, chief designer, Gennady Banyuk, and chief designer and a department head, Nikolai Trunov.

“They went for a business trip, and we learned from EMERCOM that they were on board of that plane,” the source said. “Two our representatives will fly to Petrozavodsk today.”

Rusair’s Tu-134 crushed late night on Monday. The accident killed 44, and eight are in hospitals, where seven are in poor conditions.

June 21, 2011 09:37

Football referee Pettai killed in Karelia air crashhttp://www.interfax.com/newsinf.asp?id=253291

MOSCOW/PETROZAVODSK. June 21 (Interfax) - Russian Football Premier League referee Vladimir Pettai has been killed in a crash of a Tupolev Tu-134 plane near Petrozavodsk, the Emergency Situations Ministry told Interfax.

"Famous football referee Pettai is on the list of those killed," an official said.

The list of killed passengers also includes Swedish national Jacob Vettrut who was flying for a conference of the Barents region countries, he said.

kk

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

Eight foreigners killed in plane crash in northwestern Russiahttp://en.rian.ru/russia/20110621/164739471.html

10:22 21/06/2011

MOSCOW, June 21 (RIA Novosti)

Four foreigners and a family of four with dual Russian-U.S. citizenship were among the 44 people killed in the plane crash outside Petrozavodsk in northwestern Russia, the Emergencies Ministry said on Tuesday.

The RusAir Tu-134 flight left Moscow for Petrozavodsk at 22:30 on Monday and crashed about an hour and 10 minutes later on a highway a kilometer away from Petrozavodsk's airport. Eight of the 52 people on board the plane survived and were taken to hospitals in Petrozavodsk, the capital of the republic of Karelia.

The Emergency Situations Ministry statement said the dead foreigners were a Swedish and a Dutch citizen and two Ukrainians, as well as the Russian-American family.

Two Ukrainians Killed In Air Crash In Russia

http://un.ua/eng/article/335176.html

(08:59, Tuesday, June 21, 2011)

Two Ukrainian citizens were killed in air crash in Russia on June 20, press service of the Civil Defense Minister of Russia said.

A Tuesday-134 plane with 43 passengers and nine crewmembers aboard departed from the Moscow airport of Domodedovo at 10:30 p.m., Moscow time, and conducted tough landing two kilometers from the airport of Petrozavodsk.

Fire occurred aboard of the plane.

At 12:30 a.m., Moscow time, the fire was extinguished.

Eight people were hospitalized at 12:50 a.m.

A total of 44 people were killed.

Armenian killed in wreckage of Russian plane near Petrozavodsk

http://news.am/eng/news/64015.html

June 21, 2011 | 12:25

YEREVAN. - Armenian by origin was killed in wreckage of a Russian plane Tu-134.

He is a citizen of Ukraine Vahram Simonyan, Spokesperson for Armenian Foreign Ministry informed Armenian News-NEWS.am.

The jet with 52 passengers took off Monday night from Moscow for Petrozavodsk. The plane crashed onto a highway near Petrozavodsk airport in Karelia. The plane tried to land on a motorway, but crashed and caught fire. Forty-four passengers, including crew members died, whereas eight survivors were hospitalized.

07:42 21/06/2011ALL NEWS

EMERCOM confirms Swedish national killed in N W Russia jet crash.

http://www.itar-tass.com/en/c154/169333.html

21/6 Tass 115

PETROZAVODSK, June 21 (Itar-Tass) -- A Swedish national is among the 44 people who died late night Monday when a Tupolev-134 jet crash-landed near the northwest Russian city of Petrozavodsk, the chief of the Northwest Territorial Center of the Ministry for Emergency Situations and Civil Defense /EMERCOM/, Shamsutdin Dagirov, told reporters.

“Early data indicates there was one foreigner aboard the jet,” he said. “The man was a national of Sweden and he died.”

The list of passengers that EMERCOM headquarters published on its official website early morning Tuesday features a person Jacob Wettrup by name. Earlier reports indicated that he was traveling to Petrozavodsk to attend a seminar on the activity of rescue workers.

Dagirov indicated that forensic identification of the bodies has not begun yet.

“The bodies of only four victims of this tragedy have been taken to the morgue by now, and five more bodies are ready for evacuation there,” he said.

Arrival of the dead passengers’ relatives is expected later Tuesday and the identification procedures will begin after that, Dagirov said.

Also, a special commission formed by the CIS Interstate Aviation Committee is due to arrive.

Dagirov confirmed that the misfortunate jet’s flight recorders had been found but they were still kept at the site of the accident.

He revealed that the first reports about the crash-landing of the jet had come from eyewitnesses.

07:05 21/06/2011ALL NEWS

Runway equipment partially out as misfortunate Tu-134 landed.

http://www.itar-tass.com/en/c154/169326.html

21/6 Tass 112

MOSCOW, June 21 (Itar-Tass) – High intensity lights were out of operation at the runway of the airport at Russia’s northwest city of Petrozavodsk when the misfortunate Tupolev-134 jet, which eventually crash-landed on an automobile road close to the airport, was about to land late Monday night.

Itar-Tass heard this from Alexei Morozov, a deputy chairman of the CIS Interstate Aviation Committee.

“The high intensity lights that should have been switched on in the conditions of poor visibility /the weather was bad in the airport area at the time of landing – Itar-Tass/ were out of operation,” he said without specifying why a situation like that one had taken shape.

“The causes of this will be cleared out by a special commission,” Morozov said.

Earlier, he told Itar-Tass that “the ground systems ensuring the safe landing of jets had not been functioning properly for one or another reason.

The crash-landing of the Tupolev-134 killed 44 people aboard and left only eight survivors, seven of them in a very heavy condition, medical reports said.

The jet took off from Moscow’s Domodedovo airport at 22:30 Monday. Slightly less than an hour and a half later it hit the surface of the Petrozavodsk-Suojarvi road, splitting into parts and catching fire.

05:46 21/06/2011ALL NEWS

Condition of 7 survivors of N W Russia jet crash very heavy.

http://www.itar-tass.com/en/c154/169294.html

21/6 Tass 92

MOSCOW, June 21 (Itar-Tass) – Condition of seven out of the eight people who survived an airliner crash near the northwest Russian city of Petrozavodsk late Monday night is very heavy, a source at the federal Ministry for Emergency Situations and Civil Defense /EMERCOM/ said.

The Tupolev-134 jet belonging to the Rusair airline took off from Moscow’s Domodedovo airport at 22:30 Monday. Slightly less than an hour and half later it crash-landed on an automobile road some 2 kilometers away from the Petrozavodsk airport compound.

Upon hitting the ground, the jet broke apart and caught fire

It had 55 people aboard, including a nine-strong crew. The accident carried away 44 lives as a minimum.

Only one member of the crew, flight attended Yulia Skvortsova, survived. At the time of reporting, physicians in Petrozavodsk were making drastic efforts to save her life.

The rest of the cabin and cockpits crews have died.

The list of the passengers who boarded in Moscow features the names of the Russian soccer football referee Vladimir Pettai and the Swedish expert on rescue operations, Jacob Wettrup, who was going to Petrozavodsk to take part in a seminar.

The jet’s flight recorders have been found and the experts are examining their technical condition.

Aviation industry sources point to poor weather conditions in the Petrozavodsk as to the most probable cause of the accident, although investigators are probing into all the possible causes.

Along with this, an outage of ground systems ensuring the safe landing of jets at the airport might have added to the problems during the landing, said Alexei Morozov, a deputy chairman of the CIS Interstate Aviation Committee and the man in charge of investigating air accidents.

“An outage of ground control systems occurred,” he said, adding that a commission for investigating the crash near Petrozavodsk was to leave Moscow about 06:00 hours Tuesday.

Russian plane crash raises fresh concerns about ageing fleethttp://www.telegraph.co.uk/news/worldnews/europe/russia/8588524/Russian-plane-crash-raises-fresh-concerns-about-ageing-fleet.html

The deadly plane crash in northern Russia on Monday night that left forty four people dead and eight in a critical condition has raised fresh concerns about the airworthiness of Russia’s ageing civil aircraft fleet.

By Andrew Osborn, Moscow

8:41AM BST 21 Jun 2011

Although investigators have warned it is too early to say precisely what caused the disaster, they said mechanical failure (along with human error and bad weather) was one of the lead theories.

State media told viewers that the plane involved in the crash, a Tupolev-134 passenger jet, was generally reliable, but conceded it was in the process of being phased out due to its old age.

Although Russian airlines flying international routes typically use more modern Boeings and Airbus planes, many domestic carriers continue to use ageing Soviet-era aircraft that are on their last legs.

The Soviet-era jet involved in the crash was thirty one years old, and Russia’s transport minister Igor Levitin warned in 2007 that such planes were getting too old for commercial use and should be withdrawn from service within five years.

Around 150 such planes are estimated to remain in service inside Russia however, along with a similar number of ageing Tupolev-154 passenger liners which are also reaching the end of their service life.

The engines on the plane that crashed were so old and noisy that it was banned from flying in many parts of Europe due to noise regulations.

But with Russia’s own aircraft makers struggling to come up with new designs and Western-made planes too costly for some, many smaller cash-strapped Russian carriers continue to operate old planes in the twilight of their natural lives.

Some sixty nine Tupolev-134 planes have been destroyed in accidents and wars over the years, while experts say it has been involved in at least twenty fatal crashes.

Although Russian aviation experts fiercely defend the mechanical reliability of such planes, cases of mechanical failure do appear to be on the rise. In September last year for example, a Tupolev-154 passenger jet made a miraculous emergency landing on a derelict airstrip in a remote region after its electrical systems failed mid-flight.

A deadly crash in April that same year of another Tupolev-154 killed all 96 people onboard including Polish President Lech Kaczynski. In that case, investigators blamed a mixture of fog and human error rather than mechanical failure however.

Russia welcomes Abyei agreement in Sudan http://english.ruvr.ru/2011/06/21/52163274.html

Jun 21, 2011 10:11 Moscow Time

Russia has welcomed an agreement between the authorities of Northern and Southern Sudan to demilitarize the Abyei border region and deploy Ethiopian peacekeepers there.

This came in a statement at the UN Security Council on Monday by the Russian Ambassador to the United Nations Vitaly Churkin. Russia urges both parties to abstain from violence and bend every effort to improve the humanitarian situation, Churkin said.

Following the January referendum Southern Sudan will become an independent state on July 9th.

21 June 2011, 10:01

Moscow concerned about religious tensions in Lebanon http://www.interfax-religion.com/?act=news&div=8533

Moscow, June 21, Interfax - Reports about clashes in northern Lebanon have aroused deep anxiety in Moscow.

"Moscow has been alarmed by an escalation of inter-confessional tensions in the north of Lebanon in conditions when the newly-formed government led by Najib Mikati has finally began working after protracted consultations," the Russian Foreign Ministry's official spokesman Alexander Lukashevich said in a statement posted on the ministry's web site.

Clashes between supporters of the Sunni and Alawit branches of Islam in the northern Lebanese town of Tripoli grew into armed confrontation, in which seven people, including one serviceman, were killed and dozens of others were wounded, prompting the government to move troops and hardware into the town to stop the bloodshed and prevent new violence.

"We hope that the rival Lebanese factions will take the necessary steps to avoid the repetition of similar events and to restore the atmosphere of cooperation between all Lebanese irrespective of their confessional belonging," the statement says.

This is the only way to ensure peace, calm and the national unity of Lebanon, it says.

June 21, 2011 11:48

West's tough measures against Belarus counterproductive – ministryhttp://www.interfax.com/newsinf.asp?id=253335

MOSCOW. June 21 (Interfax) - The European Union sanctions against Belarus are counterproductive, said Konstantin Dolgov, the Russian Foreign Ministry's Commissioner for Human Rights, Democracy and Rule of Law.

"Some of our Western partners are trying to help resolve the human rights problems in Belarus. They focus on tough measures, sanctions, restrictive or similar steps. We believe that such a policy is counterproductive however difficult the dialogue on human rights is," he said at a briefing in Moscow on Tuesday.

kk jv

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

10:55 21/06/2011ALL NEWS

RF, Belarus to discuss issues of ecology in Samara.

http://www.itar-tass.com/en/c154/169491.html

21/6 Tass 22

SAMARA, June 21 (Itar-Tass) —— The 25th meeting of the permanent seminar at the Parliamentary Assembly of the Belarus and Russia Union on issues of building the Union State is opening in Samara on Tuesday. As the press service of the government of the Samara Region reported, the meeting is devoted to problems and priorities of environmental protection, issues of ecological education.

Deputies of the Parliamentary Assembly, representatives of the ministries of natural resources of Belarus and Russia, the Federal Service for Hydrometeorology and Environmental Monitoring, the Belarussian and Russian ministries for emergencies and a number of departments and organizations will take part in the seminar.

During three days, the meeting participants are to discuss joint activities of Russia and Belarus in the sphere of ecology, innovation projects in the programmes of modernization of water supply, development of ecological education.

Besides, they will discuss the results of monitoring of environmental pollution on the territory of the Middle Volga Region, restoration of the ecological state and quality of water of major reservoirs of the Volga and other issues of ecology of the Volga Region.

Director for Russian-Polish dialogue centre wantedhttp://www.thenews.pl/1/10/Artykul/46600,Director-for-RussianPolish-dialogue-centre-wanted

21.06.2011

President Bronislaw Komorowski signed a bill paving the way for the enterprise in April this year, in the wake of the first anniversary of the Smolensk Air Disaster.

The Polish wing of the centre will be located in the western city of Wroclaw, whilst the Russian one will be in Moscow.

Both branches of the centre will have a similar annual budget, approximately 4 million zloty (1 million euros).

The enterprise will be officially inaugurated in Wroclaw later this week during the 1st Polish-Russian Media Congress, although there remains considerable work ahead.

“Amongst other reasons, the aim of this congress is to let journalists from Poland and Russia get to know people that are themselves directly involved in the realisation of the centre,” said Dr Slawomir Debski from the Ministry of Culture, himself a former director of the Polish Institute for International Affairs.

The deadline for applications for the post of director is 5 July. (nh)

10:35 21/06/2011ALL NEWS

Medvedev orders government to provide ecology safety in Sochi.

http://www.itar-tass.com/en/c154/169471.html

21/6 Tass 199

MOSCOW, June 21 (Itar-Tass) —— Russia’s President Dmitry Medvedev ordered the government and the Krasnodar Territory administration to provide ecology safety during preparations for the Olympic Games in Sochi and to follow strictly the responsibilities as in the Sochi-2014 application.

Medvedev signed a list of orders following the June 9 meeting of the State Council, which was devoted to ecology issues, the Kremlin’s press service reported on Tuesday.

Among other orders he urged “stopping in the territory of the Sochi national park of illegal production of limestone and disposal of soil.” Another task is to expand the territory according to suggestions from Russia’s Natural Resources Ministry, and the

territory of the Western Caucasus object by including into it of the Sochi national park and wildlife preserve.

The Western Caucasus is part of the UNESCO heritage programme.

Another order is “to consult ecology organisations and to organise public discussions to evaluate ecology risks in construction of terminals in Novorossiisk, and in Tuapse, and to finalise those projects according to results of the consultations and discussions.”

June 21, 2011 11:07

Medvedev demands eco safety during Sochi Olympics preparationshttp://www.interfax.com/newsinf.asp?id=253314

MOSCOW. June 21 (Interfax) - Russian President Dmitry Medvedev has instructed the Russian government along with the administration of the Krasnodar Territory to take measures to strictly comply with the obligations assumed in the Sochi-2014 bid book.

At a meeting with representatives from environmental, non-governmental organizations (NGOs), the president formulated a list of instructions, and in particular, demanded that measures be taken to ensure ecological safety during preparations for the Sochi Olympics.

The president also instructed to consider a possibility of discontinuing unsanctioned limestone production and discharge of extracted ground in the Sochi National Park. He also instructed to contemplate the possibility of building a plant for processing silt deposit for its subsequent use instead of building a silt burning plant.

The president also instructed to work out an expansion of the Sochi National Park and the territory of the Western Caucasus, a UNESCO Heritage Site, by including it into the national reserve zone of the Sochi National Park and the Sochi reserve.

kk jv

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

11:36 21/06/2011ALL NEWS

FC speaker confirms June 22 vote on prosecutor general's candidacy.

http://www.itar-tass.com/en/c154/169537.html

21/6 Tass 189

MOSCOW, June 21 (Itar-Tass) — First deputy speaker of the Federation Council upper house of the Russian parliament Alexander Torshin confirmed that the house would vote on the prosecutor general's candidacy on Wednesday, June 22.

"The FC, at its plenary session on Wednesday, will certainly consider the candidacy of the prosecutor general," Torshin said in an interview to Itar-Tass.

"We've completed all the procedures; the president's letter came on Monday, we've made copies of it and distributed it among the house committees and commissions. A joint meeting of two committees - for legal and judicial issues and defense and security -- will take place on Tuesday. They will review the candidacy of Yuri Chaika, proposed by the president, and issue their recommendations," he said.

It will be an open conference, and any FC member might attend it or ask questions.

Assuming that there will be many visitors, Torshin, who is acting FC speaker, ordered the conference to be held in a large hall.

"I'm sure, we'll have a substantive talk," he added, "Chaika will be present at the conference and answer questions, giving his vision of various issues, regardless of who asks questions or how these questions are asked."

Taking part in the conference will be presidential and government representatives at the upper house.

Answering the question about Chaika's chances to keep the post of prosecutor general, Torshin said he "saw no reason not to approve his candidacy.'

"Firstly, it is the president who proposed him, which means he trusts him. We, the senators, have no reasons to mistrust Chika. If the house had serious complaints about his work, they would have already materialized in appropriate decisions.

"Secondly, the FC developed constructive cooperation with the Prosecutor General's Office. Chika is very attentive to lawmaking; he provides serious assistance in preparing the annual report on law-making, and is most attentive to senators' recommendations. The prosecutor general's annual reports at the house on the state of law in the Russian Federation leave no questions unanswered or problems unsettled," the acting FC speaker said.

"Although there are many people who feel hurt by prosecutors, there have been almost no complaints against Chaika. But I'm not speaking for all the senators; it's my viewpoint, so let the house decide.

There many lawyers and persons well versed in prosecutor's work thanks to personal experience, not textbooks or newspaper articles. We have three top-level prosecutors in the house: they are former military prosecutor Alexander Savenkov, former first deputy prosecutor general Yuri Biryukov and former prosecutor general Nikolai Shaklein. Many FC members have working experience n this field," Torshin said.

RT News line, June 2

Russian reporter cleared of libeling head of federal youth agencyhttp://rt.com/politics/news-line/2011-06-21/#id12663

11:54

The Khamovniki Court of Moscow has ruled against Vasily Yakemenko, head of the Federal Agency for Youth Affairs, who filed suit against journalist Oleg Kashin for libel.  In November 2010, Kashin, an outspoken journalist for Kommersant daily, was brutally beaten near his home in Moscow. As he recovered and left intensive care, Kashin said on his blog that he believes Yakemenko, the founder of the pro-Kremlin Nashi group, frequently criticized by the reporter, could be linked to the attack. Yakemenko responded by suing Kashin for libel.

10:11 21/06/2011ALL NEWS

Police, militants clash in Dagestan's Kizlyar district.

http://www.itar-tass.com/en/c154/169439.html

21/6 Tass 193

MAKHACHKALA, June 21 (Itar-Tass) — Law-enforcement agents clashed with a group of gunmen near the village of Kuznetsovo in Dagestan's Kizlyar district, a source at the republic's Interior Ministry.

"As of now, there is no information about casualties on either side. The fighting continues," the Interior Ministry officer told Itar-Tass.

June 21, 2011 11:16

Five law enforcement officers hospitalized after fight in Dagestanhttp://www.interfax.com/newsinf.asp?id=253324

MAKHACHKALA. June 21 (Interfax) - Five law enforcement officers wounded in the fight near the village of Kuznetsovka in Kizlyar district of Dagestan have been taken to the Kizlyar district hospital, the hospital told Interfax.

One of the officers is currently being operated on, two are in stable condition, and two have been treated as outpatients, the source said.

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

11:34 21/06/2011ALL NEWS

Attempted murder case opened over Asha metallurgical plant blast.

http://www.itar-tass.com/en/c154/169530.html

21/6 Tass 210

YEKATERINBURG, June 21 (Itar-Tass) —— A criminal case was opened over an attempted murder and the illegal circulation of ammunition over the blast at the Asha metallurgical plant in the Chelyabinsk Region, the press service of the Chelyabinsk regional branch of the Investigation Committee told Itar-Tass on Tuesday.

“The blast theory of a technological oxygen cylinder was not proved. A criminal case was opened under the articles of the Criminal Code for an attempted murder and the illegal circulation of ammunition,” the press service reported. “A team of detectives is working at the plant. The detectives are taking urgent investigation actions and search measures to find people, who committed a heinous crime and investigate all the details of the crime,” the press service said.

In the morning on June 20 in the rolled steel shop at the Asha metallurgical plant a homemade radio-controlled explosive device exploded. An employee of the plant was injured in the blast and underwent a surgery in the evening on June 20. The doctors believe that he is in grave condition. The injured worker is staying at an intensive therapy ward of the local city hospital.

11:53 21/06/2011ALL NEWS

FSKN busts drug trafficking ring.

http://www.itar-tass.com/en/c154/169555.html

21/6 Tass 227

MOSCOW, June 21 (Itar-Tass) — The Federal Service for Drug Control and Psychotropic Substances Circulation (FSKN) jointly with the Federal Security Service stopped the activity of a drug trafficking group, which supplied 1.5 tons of methadone to Russian provinces each year, FSKN chief Viktor Ivanov said at a meeting of the State Antidrug Committee on Tuesday.

The criminal group included chemists and one Ph.D, technology," Ivanov said.

"The FSKN, and the FSB, in a joint operation, intercepted the activity of an organized criminal group , eliminated a high-tech, nearly commercial production of methadone with annual capacity of 1.5 tons. The drug was mostly sold in the Moscow and Leningrad regions," Ivanov said.

12:20 21/06/2011ALL NEWS

Number of websites with child pornography tripled.

http://www.itar-tass.com/en/c154/169601.html

21/6 Tass 238

MOSCOW, June 21 (Itar-Tass) —— The Internet users said that the number of websites with child pornography has tripled, Russian Interior Minister Rashid Nurgaliyev said in reply to the questions about cybercrime by visitors at the Russian Interior Ministry website.

“People are becoming more attentive over probable offences in the Internet. They find such criminal facts more and more frequently and address in the law enforcement agencies for the protection of their rights and the rights of other people,” the minister noted.

Thanks to the cooperation between people and public organizations the number of criminal cases against the distributors of child pornography in the Internet went up from 242 cases in 2009 to 429 criminal cases in the previous year.

“The Friendly Internet Foundation helps greatly our employees. Some 22,161 calls came on its special hotline in 2010 (9,693 calls in 2009). After these calls 11,535 resources

(3,653 resources in 2009), which contain child pornography, were found,” Nurgaliyev noted. Through the assistance of the foundation the similar content was removed from 9,248 resources (3,258 resources in 2009), including 491 resources hosted outside Russia.

Only after the calls on the hotline of the foundation 24 criminal cases were opened for the making and distribution of the materials or objects with pornographic images of children.

Meanwhile, thanks to the assistance of people telephone fraud cases are curbed efficiently, the minister pointed out. “The onslaught of crimes with the use of short mobile phone numbers was cracked down. The operative situation was improved, because at the initiative of the Directorate K (on the struggle with crimes in high technologies – Itar-Tass) the mobile operators introduced the services to inform the phone users about the source of the short mobile phone number and the real price of an sms message on this number. This service is currently available to the mobile phone users of all mobile operators at their official websites and to the stationary phone users by their mobile phones,” the minister underlined.

Firefighters put out 8 forest fires in Russia's Far East over past 24 hourshttp://en.rian.ru/russia/20110621/164737335.html

07:34 21/06/2011

VLADIVOSTOK, June 21 (RIA Novosti)

Firefighters and rescuers in Russia's Far East extinguished eight forest fires over the past 24 hours and continue battling 10 more forest fires, a spokesman for the regional emergencies ministry said on Tuesday.

"A total of 18 forest fires were registered in the past 24 hours; eight of them were extinguished and four more localized," the spokesman said.

The remaining forest fires had spread over the total area of about 5.49 hectares, the ministry added.

Wildfires in forested regions of Russia are common during the dry and hot summer season. Most of the time, the fires start because of the careless behavior of local residents in the woods.

Forest fires devastated a number of regions in central Russia last summer, killing 62 people and leaving thousands homeless.

Russia prepares to launch Progress M-11M space freighter to ISShttp://en.rian.ru/science/20110621/164736706.html

05:57 21/06/2011

MOSCOW, June 21 (RIA Novosti)

A Russian cargo spacecraft will be sent to the International Space Station (ISS) on Tuesday at 18:38 Moscow time (14:38 GMT), a spokesman for the Russian Mission Control said.

The Progress M-11M will lift off atop a Soyuz-U carrier rocket from the Baikonur space center in Kazakhstan.

It is to deliver 2.5 tons of expendables, fuel, water and foodstuffs, including green apples, lemons, oranges, onions and garlic to the ISS.

The freighter is scheduled to dock with the ISS on June 23 at 20:39 Moscow time (16:39 GMT).

Progress-family freighters have been the backbone of the Russian space cargo fleet for decades. In addition to their main mission as cargo spacecraft, they are used to adjust the ISS's orbit and conduct scientific experiments.

IATA celebrates 15 Years in Russiahttp://www.indiainfoline.com/Markets/News/IATA-celebrates-15-Years-in-Russia/5181651783

India Infoline News Service / 12:50 , Jun 21, 2011

Giovanni Bisignani, IATA’s Director General and CEO made the calls in a visit to Russian Transport Minister Levitin on the occasion of the 15th year of IATA’s operations in Russia.The International Air Transport Association (IATA) praised the Government of Russia for progress made in aviation and encouraged the Russian Minister of Transport, Igor Levitin, to take further action on three critical issues: (1) ensuring that the Russian fleet complies with standards set by the International Civil Aviation Organization (ICAO), (2) becoming more vocal in opposing Europe’s plans to include international aviation in its emissions trading scheme, and (3) eliminating discriminatory pricing for airport and air navigation service charges.

Giovanni Bisignani, IATA’s Director General and CEO made the calls in a visit to Russian Transport Minister Levitin on the occasion of the 15th year of IATA’s operations

in Russia. “We opened our Moscow office in 1996. Over the last 15 years, we have worked side-by-side with the Russian government, our now 9 Russian members and all carriers serving the Russian market to help develop the great potential for Russian aviation based on global standards. We have come a long way. But some issues still remain for Russian aviation to fulfill its great potential,” said Bisignani.

11:33 21/06/2011ALL NEWS

Int’l conf on civil aviation infrastructure opens in Moscow.

http://www.itar-tass.com/en/c154/169529.html

21/6 Tass 120

MOSCOW, June 21 (Itar-Tass) —— The seventh annual international conference “Infrastructure of civil aviation” is opening in Moscow on Tuesday.

“One of the most important aims of the forum is to discuss and estimate the pace of preparations of the country’s airport infrastructure for world-scale mass events: APEC 2012, the Winter Olympiad 2014 and the 21st World Football Championship,” chairman of the organizing committee Alexei Komorov told ITAR-TASS. “So important events set the task of raising the efficiency of work of all links of the air transport infrastructure and quality of servicing passengers at airports.”

According to him, the preparation for these events need material investments “in the construction and reconstruction of runways, terminals, airport equipment, as well as in the organization of work of airport complexes engaged in servicing passengers at the world level.”

Representatives state bodies, leaders of airports, air companies, financial and insurance agencies - - a total of over 120 specialists will take part in the conference.

The forum will be held in the format of four sessions. Issues of the state and forecasts of development of airports of the Moscow air network and regions, air traffic systems, adaptation of the land infrastructure to meeting the requirements of the growing market of air transportations will be discussed at them. Representative of the Federal Air Transport Agency, leaders of airports, financial and insurance agencies participating in the preparation and holding of major sport and political events are to make reports.

The conference will end on June 22.

Anti-gay rally threatens Russian Pride events in St. Petersburghttp://lgbtweekly.com/2011/06/20/anti-gay-rally-threatens-russian-pride-events-in-st-petersburg/

by Lauren Westerfield

One week before the St. Petersburg Gay Pride parade, scheduled this year for June 25, Russian anti-gay organizers staged a rally in St. Petersburg petitioning city hall to ban LGBT groups from city-sanctioned activity.

The violently anti-gay rally, which involved participants draping a coffin in a rainbow flag and then destroying and discarding it in a “symbolic destruction and burial of the movements of perverts,” was led by the nationwide “People’s Cathedral” movement and the conservative social group “Parents Standing.”

Organizers of the rally also petitioned for the resignation of St. Petersburg district head Vladimir Korovin, the city official responsible for permitting a gay rally to take place back in May in honor of the International Day Against Homophobia and Trasphobia. Korovin’s decision to sanction the rally made it the second authorized LGBT public even in the city’s history; but now members of the “People’s Cathedral” and “Parents Standing” are pushing to have any future displays of LGBT Pride or protest eliminated through parliamentary action.

According to the site GayRussia, protestors also called upon the Regional Parliament of St. Petersburg to enact a ban against so-called “anti-family” propaganda in order to prevent “sexual perversion” and protect society from “danger for public morality and a threat for the country’s demographics.”

As yet, city hall officials have not offered any response to the anti-gay petitioners.

June 21, 2011 10:26

Moscow press review for June 21, 2011http://www.interfax.com/newsinf.asp?id=253303

MOSCOW. June 21 (Interfax) - The following is a digest of Moscow newspapers published on June 21. Interfax does not accept liability for information in these stories.

VEDOMOSTI:

In the Russian-Chinese dispute over the oil price Rosneft (RTS: ROSN) is a scapegoat. Vedomosti has learnt that another state company - Transneft (RTS: TRNF) - is not paying it for raw material bought for China, citing the lack of payments from the consumer. Transneft owed to Rosneft around $26 million, sources close to both companies told Vedomosti. If debts are not repaid, Transneft will demand money through a court, said a source close to the monopoly. The company is already preparing lawsuits to a London court. So Transneft may not have to fear legal claims from Rosneft: the oil company is not going to demand debt redemption from a transport monopoly, said a source close to Rosneft. "Transenft is our partner, we trust it. Besides, the debt is not Transneft's fault," he said. ("Transneft shares debt")

Europeans will pay to Gazprom for preferring another, cheaper gas over its commodity. The company will get $3.4 billion for the fuel not taken in 2009-2010. These figures were announced on Monday by Gazprom deputy CEO and Gazprom Export General Director Alexander Medvedev. "Virtual" gas export to Europe in 2009 stood at 4.1 billion cubic meters: Gazprom (RTS: GAZP) received $1.1 billion for it in 2010, and is expecting another $100 million from the Czech Republic, the company official said. The company received $1.1 billion in proceeds from "virtual" sales in 2010 (7.2 billion cubic meters) between December 2010 and May 2011. Another $1 billion is expected from the Turkish state company Botas no later than the third quarter. This money is transferred to Gazprom because its long-term contracts are based on the take or pay principle. ("Billions out of thin air")

Russian Railways (RTS: RZHD) applied for the acquisition of 50% plus one share in Poland's national cargo carrier PKP Cargo, a company official told Vedomosti without elaborating. PRP Cargo is Poland's largest carrier (56% of the market) and second larges in the EU after Deutsche Bahn. The finance ministry added the company to the 2008-2011 privatization plan. Polish media outlets said that 50% plus one share in the carrier are estimated at $710 million. The company itself could be worth $3.5 billion, depending on the condition of its fleet, said Yelena Sakhnov, an analyst at VTB Capital. At least ten companies are eyeing the asset, said Bloomberg, citing the PKP chief Maria Wasiak. ("Train to Poland")

KOMMERSANT:

Inter RAO UES (RTS: IRAO) is set to acquire and swap for its securities 75% shares in Quadra (RTS: TGKD). Officially, 50% could be sold by Mikhail Prokhorov's Onexim, and another 25% has to be collected from other shareholders. But even this share can be indirectly controlled by Onexim which has been in active talks since 2009 with minority shareholders who demanded the execution of an offer to buy their shares. In case of a swap of 75% in Quadra for the Inter RAO securities, with a control premium one can get over 5% share in the energy corporation. (page 9)

Ex-Duma member Alexander Lebedev is set to distance himself from his controlled banking business. The majority stake in the National Reserve Bank (NRB) could be transferred in beneficiary ownership. The scheme, which is unique for Russian bank

owners, most likely aims to limit the risks of the NRB majority shareholder, experts said. (page 8, Trust-based bank)

The government's desire to speed up introduction of 4G communications in Russia could affect the income of mobile operator MTS (RTS: MTSS). It warned investors that "for political or other reasons" it might have to develop a 4G network "on commercially unfavorable conditions" (page 7, "MTS gets into a net of increased risks," also Vedomosti - "Political risk of MTS").

Russian Press at a Glance, Tuesday, June 21, 201109:22 21/06/2011

A brief look at what is in the Russian papers today

POLITICS

President Dmitry Medvedev said in an interview with the Financial Times that he wants to run for re-election next year but it is difficult to imagine a situation in which he and Prime Minister Vladimir Putin would both be on the ballot(Kommersant, Rossiiskaya Gazeta)

Justice Minister Alexander Konovalov said political parties and other nonprofit organizations should not be required to register with his ministry, only to notify it of their existence(The Moscow Times)

A European Commission delegation will visit Moscow in the coming days to negotiate the lifting of Russia's ban on EU vegetables(The Moscow Times)

ECONOMY & BUSINESS

Russian energy giant Gazprom has raised its forecast on 2011 revenues from gas exports to Europe to $60 billion from $53-55 billion on strong performance in the first five months of the year(Vedomosti, Rossiiskaya Gazeta)

ENERGY

International Atomic Energy Agency head Yukiya Amano suggested conducting safety checks on every 10th nuclear power plant in the world in the next three years(Rossiiskaya Gazeta, Nezavisimaya Gazeta)

WORLD

The trial in the case involving former Ukrainian Prime Minister Yulia Tymoshenko and the 10-year contract with Russian energy giant Gazprom on the supply of Russian gas to Ukraine at international prices begins in Kiev on Friday(Nezavisimaya Gazeta)

Confusion over Abkhazia's ties with Vanuatu reached new heights Monday when reports from the Pacific island nation said a new government had withdrawn an earlier recognition of the breakaway Georgian republic's independence(The Moscow Times)

REAL ESTATE

The average price for real estate in Moscow has been estimated at more than $5,000 a square meter. Although house prices are decreasing in Russia’s regions, prices in the Russian capital continue to rise(Vedomosti)

RULE OF LAW

Russia's Investigative Committee rejected a request to open criminal proceedings against the Moscow Khamovnichesky Court judge who sentenced Mikhail Khodorkovsky to a second term in jail in December(Kommersant)

Mikhail Khodorkovsky's request to be released on parole has been returned to the Moscow pre-trial detention center where the jailed tycoon was held during his second trial last year. Khodorkovsky's lawyers said the move by the capital’s Preobrazhensky Court amounted to bureaucratic subterfuge.  (Kommersant)

CRIME

Shamil Payzullayev, known as "Abdusalam," was killed in an apartment in Reduktorniy village near the Dagestani capital of Makhachkala when he tried to put up armed resistance after being surrounded by police. He was involved in numerous terrorism activities and planned a terrorist attack on the Red Square in Moscow.(Rossiiskaya Gazeta)

SPORTS

Zinetula Bilyaletdinov has been approved as the head coach of the Russian national ice hockey team(Kommersant, Rossiiskaya Gazeta)

Hermitage Capital calls for Russian inquiry into $330m 'tax frauds' uncovered by Sergei Magnitskyhttp://www.telegraph.co.uk/finance/financial-crime/8587718/Hermitage-Capital-calls-for-Russian-inquiry-into-330m-tax-frauds-uncovered-by-Sergei-Magnitsky.html

Lawyers for the London-based hedge fund Hermitage Capital Management have applied to the Russian authorities for an inquiry to be opened into the alleged involvement of a senior state official in suspected tax frauds worth more than $330m (£204m).

By Philip Aldrick

6:42PM BST 20 Jun 2011

The alleged frauds were uncovered in 2008 by Sergei Magnitsky, Hermitage’s investigative lawyer whose death in custody while awaiting trial on allegedly trumped-up charges has become a national scandal.

Mr Magnitsky’s colleagues have unearthed new evidence that they claim shows the same two tax officials, Olga Stepanova and Elena Khimina green-lighted the rebates for both alleged frauds. Ms Stepanova has since been promoted to a senior post in the Russian defence ministry.

The criminal complaint, filed on Monday with the Russian State Investigative Committee, was made as President Dmitry Medvedev pledged “a very thorough investigation” into Mr Magnitsky’s death and the alleged frauds he uncovered.

“It is an incident that needs a very thorough investigation, first of all, what really happened and why he was taken into custody, who was behind that, what deals were clinched by both those he represented and by the other side. I have asked the prosecutor general and Ministry of Interior to work on that,” he said.

Tax officials were central to the alleged crimes because they involved apparently fraudulent tax refunds of payments made by large companies. Mr Magnitsky first discovered that $230m of tax Hermitage paid in 2007 had been rebated to others after being alerted to the fact that its subsidiary companies had been stolen.

His subsequent investigations uncovered an allegedly similar $107m prior tax theft at subsidiaries of an investment vehicle being managed by Renaissance Capital, the Russian investment bank. Ms Stepanova and Ms Khimina allegedly approved both tax rebates.

Mr Magnitsky was targeted by the same policemen he alleged were part of the criminal conspiracy only after uncovering the alleged second fraud. He was jailed on charges of tax evasion, held in custody without trial for a year, refused access to his family, developed health problems and was denied medical treatment. He died in jail.

A human rights commission appointed by President Medvedev earlier this year found Russian police had fabricated the charges against Mr Magnitsky.

The Russian authorities have accepted that there was a fraud involving Hermitage’s companies, jailing a sawmill foreman for orchestrating and committing the vastly complex crime. None of the money has been recovered. The alleged crime at RenCap’s investment vehicle has not been investigated and RenCap has stressed it “had zero involvement in the alleged 2006 tax fraud” .

Hermitage believes it has tracked $47m of the allegedly stolen funds to Swiss bank accounts. The Swiss have since frozen those accounts “as an emergency measure”. Implicated individuals, including tax officials and other senior state officers, have also been threatened with a visa ban in Europe and the US.

The Curse of the Crocodile: Russia's Deadly Designer Drug

Read more: http://www.time.com/time/world/article/0,8599,2078355,00.html#ixzz1Pt2pAyTyBy Simon Shuster / Chichevo, Russia Monday, June 20, 2011

The new arrivals at the drug rehab center in Chichevo, a tiny village two hours' drive east of Moscow, are usually given two weeks without chores to recover from the nausea, pain and sleeplessness of withdrawal. After that, between Bible study and prayer (the center is run by Pentecostals) they have to start chopping firewood, hauling water from the village well or otherwise helping around the old wooden house. But a lot more leeway was allowed in the case of Irina Pavlova, the only resident at the center who is addicted to krokodil, or crocodile, Russia's deadliest new designer drug.

There is no good medical explanation for why Pavlova survived her addiction. The average user of krokodil, a dirty cousin of morphine that is spreading like a virus among Russian youth, does not live longer than two or three years, and the few who manage to quit usually come away disfigured. But Pavlova says she injected the drug nearly every day for six years, having learned to cook it in her brother's kitchen. "God must have have protected me," she says by way of explanation. But the addiction still left some of its trademark scars. She developed a speech impediment, and her pale blue eyes have something of a lobotomy patient's vacant gaze. "Her motor skills are shot from the brain damage," says Andrei Yatsenko, the house manager, who was addicted to heroin for seven years. "She'll try to walk forward and instead jolts back into something. So we try to be gentle with her." (See why Russia raids Afghanistan for drugs.)

As typically happens in Russia, Pavlova began as a teenager shooting a substance called khanka, a tar-like opiate cooked from poppy bulbs, then graduated to heroin and, at the age of 27, switched finally to krokodil, because it has roughly the same effect as heroin

but is at least three times cheaper and extremely easy to make. The active component is codeine, a widely sold over-the-counter painkiller that is not toxic on its own. But to produce krokodil, whose medical name is desomorphine, addicts mix it with ingredients including gasoline, paint thinner, hydrochloric acid, iodine and red phosphorous, which they scrape from the striking pads on matchboxes. In 2010, between a few hundred thousand and a million people, according to various official estimates, were injecting the resulting substance into their veins in Russia, so far the only country in the world to see the drug grow into an epidemic.

It seems to have first appeared in Siberia and the Russian Far East around 2002, but only in the last three years has it spread throughout the country. Since 2009, the amount of krokodil seized in Russia has increased 23-fold, according to the head of the Federal Drug Control Service, Viktor Ivanov. In the first three months of this year alone, the service says it confiscated 65 million doses. "As recently as five years ago there were only one-off instances of catching this drug," Ivanov told a meeting on April 18 attended by President Dmitri Medvedev and other top officials. Medvedev then turned to his tablet computer and searched the Internet for krokodil. The search engine gave him a list of recipes and instructions on how to cook it. "What does this mean?," he demanded. "Most people are not just looking for what desomorphine is, but how they can use it." Two of the governors at the meeting then informed him that krokodil accounts for about half of all addictions and drug-related deaths in their regions. In some provinces, Ivanov chimed in, it "has practically pushed out traditional opiates." (See a perspective on addicts in Russia.)

Predictably, it has spread fastest in the poorest and most remote parts of the country, like Vorkuta, Pavlova's hometown, a former Gulag prison camp about 100 miles north of the Arctic circle. The winters there last eight months of the year, and as Pavlova recalls, the young people are in a constant state of boredom. Most of them drink and few of them work, just as in hundreds of towns and villages across Russia's frozen North. Besides her, Pavlova says there were about a dozen krokodil addicts she hung around with, including her brother. "Practically all of them are dead now," she says. "For some it led to pneumonia, some got blood poisoning, some had an artery burst in their heart, some got meningitis, others simply rot."

The "rotting" explains the drug's nickname. At the injection site, which can be anywhere from the feet to the forehead, the addict's skin becomes greenish and scaly, like a crocodile's, as blood vessels burst and the surrounding tissue dies. Gangrene and amputations are a common result, while porous bone tissue, especially in the lower jaw, often starts to dissipate, eaten up by the drug's acidity. For Pavlova, the breaking point came in 2008, when she holed herself up in her brother's apartment for two weeks and did almost nothing but cook the drug and inject it into the femoral artery in her groin. "The high lasts about an hour and a half, and it takes about an hour to cook it. So I was basically cooking and shooting 24 hours a day," she says. By the end of the binge, gangrene had begun to develop around her groin and blood poisoning was setting in. She was rushed to the emergency room, then transferred to the detox ward, where a pair of

Pentecostals were inviting addicts to rehab. Pavlova agreed. (See photos of drug-smuggling submarines.)

A sad peculiarity of the rehab system in Russia is that the government does little to help. Medvedev's meeting in April has led to a meandering public debate about the need to ban codeine or impose mandatory drug testing in schools, and a plan is in the works to create the state's first network of rehabilitation clinics over the next few years. But so far the health ministry runs only a handful of live-in rehab centers for an estimated 2.5 million drug addicts, most of whom still use heroin. The Russian union of evangelical Christians, which is dominated by the Pentecostals, runs more than 500 centers with no assistance from the state, making them the largest provider of rehab in Russia.

To get Pavlova away from potential relapse triggers — such as the pharmacies where she once bought codeine or the stairways where she used to shoot up — the evangelicals transferred her to the Chichevo center in the suburbs of Moscow, a three-story cottage that seems like a throwback to the 19th century, with a wood-burning stove in the kitchen and a traditional Russian bathhouse, or banya, that the residents built for themselves in the yard. Vast fields and forests of pine and birch separate Chichevo from the nearest town. But in 2009, when the cravings became unendurable near the end of her first stint in rehab, Pavlova still managed to hitchhike her way to Moscow and catch a train back to Vorkuta to get high. She is now a week away from finishing her second course of rehabilitation. The cravings, she says, have finally passed. "I can't go back to that. I was beautiful when I started out, but what happened..." The thought dangles for a moment. "It was like living in a horrible swamp."

The cyclical nature of Russian-American relationshttp://en.rian.ru/valdai_op/20110621/164739508.html

10:24 21/06/2011

By Alexei Fenenko

The negotiations conducted over 8 - 9 June on anti-ballistic missile (ABM) issues as part of NATO-Russia Council can not be called successful. The parties involved did not come to a compromise about the format for Russia’s participation in the “European missile defense” project. This gave rise to a plethora of comments in the Russian and American media about the end of the “reset policy”. Russian-American dialogue, of course, will continue. But no one can deny that this is an alarming sign for Moscow-Washington relations.

The June setback

The “reset policy” crisis has been discussed in the Russian and U.S. media for nearly a year. Both the Kremlin and the White House reported progress: from START-III entering into force to expanded economic contacts. But after the Washington summit that brought presidents Barack Obama and Dmitry Medvedev together on 24 June 2010, there has been an increasingly dominant sense that the “reset” process is, somehow, going very wrong. The U.S. refusal to compromise over its ABM system, ongoing tensions over Iran, Libya and Georgia, Washington’s support for Japan in its territorial disputes with Russia, the U.S. media’s infatuation with the “Khodorkovsky case” -- all these are symptoms of a deeper problem.

Now, the situation is different. The preamble to START-III focuses on the balance between strategic offensive and defensive weapons. Both parties, however, interpret this differently: the USA views it as an aspiration for the future, whereas Russia sees in it the need to reach agreement on ABM. Over the past year, Moscow has offered the United States two options for a potential compromise: either signing a special protocol to START-III or implementing the “European missile defense” project. Washington’s refusal to compromise on missile defense casts doubt over the idea that START-III (the main achievement of the two-year “reset policy”) stands any real chance of being implemented.

Moscow and Washington, of course, will try to reach a compromise on ABM. But the purpose of the “reset policy,” i.e. building new partnerships and reviving relations between Russia and the United States, seems to be fading. Russian-American relations appear to have reverted to the traditional type, with issues relating to arms control comprising 80% of their agenda. Over the past two years the parties have failed to bring them to a new level.

Cycles of convergence and divergence

There is nothing special or unusual about the current difficulties. Over the past twenty years, both Russia and the United States have experienced several cycles of convergence and divergence in their bilateral relations. It seems that Moscow and Washington are doomed to repeat these cycles time and again.

Such changes in bilateral relations are no mere coincidence. Russia and the United States base their relations on mutual nuclear deterrence. The material and technical foundations for Russian-American relations differ little from those underpinning the Soviet-American relations of the 1980s. Thus, these cycles of Russian-American rapprochement are due to two factors. First comes the desire to consistently reduce aging nuclear systems so that during disarmament neither party risked destroying the military-strategic parity. Second, the reaction to a major military-political crisis after which the parties seek to reduce confrontation and update the rules of conduct in the military-political sphere. After confronting these tasks, Russia and the United States returned to a state of low intensity confrontation.

The first rapprochement cycle was observed in the early 1990s. Yeltsin’s government

needed U.S. support in recognizing Russia within the 1991 borders of the RSFSR. Boris Yeltsin also needed U.S. assistance in addressing the problem of the Soviet “nuclear legacy” and taking on the Supreme Council. The administrations of George Bush Senior and Bill Clinton were willing to help the Kremlin solve these problems. However, the Americans demanded major strategic concessions from Russia in return, outlined in START-III: making the elimination of heavy intercontinental ballistic missiles a priority. The parties reached an unofficial compromise: U.S. recognition of the Russian leadership in exchange for the rapid decrease in Russia’s strategic nuclear forces (SNF).

However, the stronger Russian state institutions became, the weaker the impetus to the rapprochement. In autumn 1994, Russia refused to ratify the original version of START-II and declared NATO’s eastward expansion unacceptable. The United States adopted the concept of “mutually assured safety” (January 1995) under which Russia’s democratic reforms qualified as inseparable from continued armament reduction. The “Overview of U.S. nuclear policy” in 1994 also confirmed that America deemed Russian strategic nuclear forces a priority threat. The crises that unfolded during the late 1990s in Iran and Yugoslavia were, like NATO expansion, the logical results of a restoration of the old approach to Soviet-American relations.

It was actually the events of 1994, not 2000, that in fact predetermined the subsequent development of Russian-American relations.

The second cycle of Russian-American rapprochement was also rooted in strategic considerations. In 2000 START-II and the ABM Treaty collapsed. Both Washington and Moscow were faced with the problem of their agreed decommissioning of nuclear systems dating back to the 1970s. These events pushed presidents Vladimir Putin and George W. Bush to reach a strategic compromise at a meeting in Crawford (12 November 2001). The United States agreed to sign a new Strategic Offensive Reductions Treaty (SORT), and Russia did not object to Washington’s withdrawal from the ABM Treaty. Instead of the ABM Treaty, the parties signed the Moscow Declaration on May 24, 2002, under which the United States pledged to consult with Russia on all issues pertaining to missile defense deployment.

However, after the “compromise at Crawford,” the agenda for Russian-American rapprochement was exhausted. The disputes between Moscow and Washington over Iraq, Iran, Georgia, Ukraine and Beslan, which had been gathering steam since 2003, necessitated a return to the traditional format for Russian-American relations. At the Bratislava meeting (February 24, 2005) President Vladimir Putin refused to accept George W. Bush’s suggestion of including issues of fissile material safety in the agenda. Since then, the “rapprochement” between Russia and the U.S. has reached a dead end, including at the official level.

The real objectives of the “reset policy”

The third cycle was the “reset policy” proclaimed in February 2009. Predictably, it was

also based on strategic concerns. First, during the five-day war in August 2008 Russia and the United States came dangerously close to direct military confrontation. Second, it was time for the agreed decommissioning of nuclear systems in the first half of the 1980s. In the next two years, the Kremlin and the White House coordinated the parameters for START-III and discussed the new rules for military activities in Europe under the framework of the Euro-Atlantic security initiatives.

The next period of Russian-American rapprochement peaked on April 8, 2010, when START-III was signed in Prague. The relationship went on to follow the traditional pattern. The parties still demonstrated convergence. But contradictions in the core (strategic) area became an increasingly regular occurrence.

That is why now, in mid 2011 the “reset” is going through a difficult time. But this fact is no indicator of inefficiency of either Russian or American diplomacy. Put simply, the tasks assigned two years ago have been completed. The problem is that Moscow and Washington have failed to develop their relations beyond the strategic sphere, which is a cause for concern.

The potential for new cycles 

At first glance, the cyclical character of U.S.-Russian relations seems encouraging. Even taking this negative scenario into consideration, Russia and the United States should enter a new rapprochement cycle in about 2016. That is when they will need to have agreed on the decommissioning of their aging nuclear systems and overcome this unnecessary hostility. However, the problem is that in the second half of the 2010s the potential for a “rapprochement cycle” may well have been exhausted for the following reasons.

First, Russia and the United States have now reached critical ceilings in reducing strategic nuclear forces: up to 1,550 operational warheads deployed by each side. A further ceiling reduction may result in a possible strike to disarm the strategic forces of either party.

With the development of missile defense systems and precision weapons accelerating, Moscow is unlikely to agree to develop a new, more fundamental, START-IV.

Second, over the past twenty years, Russia and the United States have upgraded their strategic nuclear forces much more slowly than they did in the 1970s and 1980s. The potential to decommission these nuclear systems will be far less than it was pre-2009. If it is to maintain the current groupings of strategic nuclear forces, Russia will be forced to extend the operating life of its nuclear weapons. Presumably, the United States, in turn, will not agree to compromise on missile defense without substantial concessions from Moscow.

Third, the parties are not ready to begin a dialogue on tactical nuclear weapons (TNW) reduction. For Russia, this functions as compensation for NATO’s superiority in conventional forces. For the United States it is a mechanism by which they preserve their

nuclear presence in Europe, especially in Germany. Theoretically, Russia could exchange the partial reduction of tactical nuclear weapons for the involvement of Britain and France in the INF Treaty (Intermediate-range Nuclear Forces Treaty) and thus get guarantees for the non-development of Britain’s nuclear capability. But the experience of 2010 proved that Washington is unlikely to be able to convince London and Paris to join these Russian-American agreements.

Fourth, Russia and the USA have ever fewer compromise opportunities on missile defense issues. Washington has allocated vast resources for this project, and American business gets big military orders. Americans do not yet know what major concessions Moscow should make in exchange for an agreement on limiting anti-missile systems. Russia, in turn, is not prepared to reduce the strategic potential for the sake of attractive promises about partnership on ABM issues.

In this sense, the failure of June’s missile defense talks is a greater cause for anxiety than any of the previous obstacles encountered. Strategic relations between Russia and the United States are dwindling. In the sphere of arms control both Moscow and Washington will go through a really difficult period in the second half of the 2010s. Will it be possible to expand the agenda of the Russian-American dialogue before that starts?

 

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

For Russia, no news is good newshttp://rbth.ru/articles/2011/06/21/for_russia_no_news_is_good_news_13060.html

June 21, 2011Eugene IvanovRussia's flexible foreign policy and slow but persistent liberalization of it's domestic affairs have meant that the country can no longer be painted as the enemy in the western press. But is the alternative not being discussed at all?

Russia seems to be losing its status as a major newsmaker in the U.S. media.  Take, for instance, the influential Washington Post.  Since the beginning of June, the newspaper has published only three Russia-related articles: covering the murder of the former army colonel Yury Budanov, an anti-hero of the second Chechen war; the 20th anniversary of Boris Yeltsin’s election as president of Russia; and a Russian-American theater project.  Compare that to June 2010: The famous spy scandal had just erupted, and in a couple of days, the Post responded with seven exciting “spy” stories (coming atop of 17 articles and editorials published earlier in the month on different topics).  A whopping 19 followed in the first two weeks of July.  Almost each of these articles featured the Mata-

Hari-of-Manhattan, Anna Chapman, a woman “with a head for business…and a body for sin,” as the Post described her at the time.  

It’s possible to argue, of course,  that, perhaps, there are no more “unauthorized foreign agents” of Russian origin left in the U.S.  But the enigmatic Ms. Chapman is still alive and well in Russia, beautiful and…eh…enigmatic as ever – hosting her own TV show and planning a career in politics.  Yet for whatever reason, her image does not inspire American journalists anymore.

Or consider forest fires in Russia that in late July 2010 replaced the spy scandal as the news du jour. Kremlin critics both in Russia and the U.S. immediately put the blame for the crisis on the shoulders of Prime Minister Vladimir Putin.  Somewhat paradoxically, though, the very same people interpreted Putin's behavior during the crisis as a sure sign of his intension to run for presidency in 2012.  This summer, forest fires are ravaging Russia in full force again, but the U.S. media do not find this event newsworthy.  Is it because the ongoing severe fires in Arizona make it brazenly clear that natural disasters, be it in Russia or the United States, can’t be accounted for by the malice of a single official, even as supposedly evil as Putin? Or is it because American journalists have collected so many rock-solid signs of Putin’s desire to return to presidency that they simply do not need pictures of him extinguishing fires?      

U.S. officials do not pay much attention to Russia, either.  In his farewell public address, the outgoing Secretary of Defense Robert Gates assaulted the governments of NATO countries for insufficient – and still decreasing – defense spending.  NATO military operations in Afghanistan and Libya were invoked in this context, but a military threat from Russia was not.  Nor was Russia even mentioned during the Senate confirmation hearings of Leon Panetta, who has been nominated to succeed Gates as the Pentagon chief.

It may already sound like a cliché, but the reset in U.S.-Russian relations did change the tone of the dialogue between the two countries.  It is becoming increasingly difficult to constantly portrait Russia as perennially hostile to U.S. interests and values.  True, the negative image of Russia in the U.S. is not a consequence of “bad” news; instead, this image is being purposefully and relentlessly created in the media by numerous anti-Russian interests.  Yet, the principal objective of the media is to sell “news,” and lacking major conflicts between Moscow and Washington – and major “disasters” (both natural and man-made) in Russia, which American journalists are so good in describing – there is not much left to cover.  After all, how many articles per month can a major American newspaper publish about Mikhail Khodorkovsky?  

In all fairness, it has been difficult to create “bad news” out of Russia’s recent moves. Moscow’s decision not to veto United Nation Security Council Resolution 1973 on Libya shifted the responsibility for the situation there to the capitals where it truly belongs: Paris, London, and Washington.  Otherwise, Russia would have been inevitably blamed for all civilian deaths that occurred had Gaddafi troops attacked Benghazi in the absence of a no-fly zone.

Moscow also wisely refrained from harsh rhetoric following NATO’s refusal to accept its proposals on joint missile defense in Europe during the Russian-NATO Council meeting in Brussels on Jun. 9.  While Russian Defense Minister Anatoly Serdyukov explicitly expressed Russia’s disappointment with NATO’s unwillingness to properly address its strategic concerns, he nevertheless insisted that the both sides “trust each other” and that future negotiation “might turn out to be successful."

Of course, don’t harbor any illusions: Russia’s thoughtful and flexible foreign policy – and any liberalization of its domestic one – will not automatically create a positive image of the country in the West.  But the number of “horror” stories will inevitably go down, even if at the price of reduced coverage.

How do they say it: no news is good news?  It certainly is for Russia.  

Eugene Ivanov is a Massachussets-based political commentator who blogs at The Ivanov Report.

Central Asia in stagnationhttp://en.rian.ru/valdai_op/20110621/164739870.html

10:53 21/06/2011

Alexei Malashenko

Russia can no longer afford to pay for its nominal allies with tax-payer money. Libya, Algeria, Syria, and Egypt all owed money to the Soviet Union, but what did we receive in return? And what do we expect to receive from Belarusian President Alexander Lukashenko? Russia has finally stopped lending large sums of money to Uzbekistan and Tajikistan, which is only natural because the economic and political returns have been so negligible. Uzbekistan, for one, has shifted its foreign policy stance more than once: it entered the Collective Security Treaty Organization (CSTO) and then left it, repeating the maneuver with EurAsEC. How should Russia build its relations with Central Asia in the future? How can it overcome the empty promises surrounding such major issues as the drug trade? Anchor of the Rossiiskaya Gazeta (RG) Discussion Club Yevgeny Shestakov discusses these questions with Ph.D. Alexei Malashenko, professor of history at the National Research University - Higher School of Economics and member of the Research Council of the Carnegie Moscow Center.

Yevgeny Shestakov: Just several months ago, many commentators in the Western media openly speculated that the revolutions in Egypt and Tunisia would be shortly followed by popular uprisings in Central Asia.

Alexei Malashenko: There won’t be any revolutions there, at least in the foreseeable future. To begin with, I’d like to note that we must stop talking about Central Asia as a

single region. For all intents and purposes, it is a conglomerate of states with different national interests. Therefore, when we talk about influencing its politics, we must specify whether we mean Kazakhstan, Tajikistan, or Turkmenistan, and so on. Moreover, why not joke that the upheavals in Kyrgyzstan prompted Egypt? The events unfolding in Tajikistan follow their own logic, and it is ridiculous to assume that the local opposition is looking to repeat the Egyptian or Tunisian models due to their own discontent with President Emomalii Rakhmon. Tensions are already running high in that country, and it has enough problems without Arab Spring-style revolutions. It is hard to say much about Turkmenistan because, politically, it is a “dead sea” of sorts. I cannot imagine crowds of people protesting in the streets of Ashkhabad. Mentality is quite different there. One can legitimately ask whether two-thirds of the people there even suspect that Tunisia exists.

There are two more states in the region: Kazakhstan and Uzbekistan. Their leaders – Nursultan Nazarbayev and Islam Karimov – have been presidents for more than 20 years now. But there are no forces there capable of mounting a revolution. There is no revolutionary fuse. I cannot imagine someone staging in Tashkent what happened on Cairo’s Tahrir Square.

The Arab revolutions have affected Uzbekistan and Kazakhstan to a degree, and now Karimov and Nazarbayev can point at Tahrir and ask their compatriots: “Do you want us to have tanks and shootings like they had?” The people will respond in unison: “No, we don’t!” Tens of thousands, not to mention hundreds of thousands, will not be protesting there. The Kazakh and Uzbek ruling elites can only use “Arab Spring” as a vivid example of a “political nightmare.” Once, in the 1990s, the Tajik civil war was used in this way: there was democracy, and the Tajik Party of Islamic Revival opposed it. The result was a domestic armed conflict that took tens of thousands of lives. The Uzbek and Kazakh leaders are presenting the events in the Arab world as further evidence in favor of stability, their most precious asset.

People will only take to the streets in the case of an unsuccessful transfer of power from current to future leaders, but this will have no direct bearing on Egypt, Tunisia, or Syria…

Shestakov: Does this mean that the region is doomed to stagnation?

Malashenko: It does.

Shestakov: For how long?

Malashenko: I’d like to make a few comments about stagnation. Kazakhstan, for instance, is an exception. President Nazarbayev deserves credit in many respects. Kazakhstan has leapt into the lead. Incidentally, in the 1990s, Uzbekistan could have become an engine for reform, but it didn’t. Today, the stagnation in Kazakhstan is different from that in Tajikistan. The latter is short of energy and goods, and people are displeased with Rakhmon’s regime. People in

Kazakhstan live a better life, but their demands are also different. Here’s an example. Traffic jams in Alma Ata are almost the same as in Moscow. As for Kyrgyzstan, it is in economic and social stagnation, but its political life is far from calm. Something is being done in Turkmenistan, but we are well aware that, all things being equal, it could achieve more impressive results, especially by using the experience of the countries of the Persian Gulf. Alas, Kuwait is too far ahead, and Turkmenistan will hardly ever be able to match it.

Uzbekistan is also in stagnation economically, socially, and politically. The water is boiling under this stagnation, but, let me emphasize this again, not according to the Arab recipe.

Shestakov: Are there forces interested in “detonating” this region, or is it of little interest?

Malashenko: Let’s be pragmatic. Central Asia is not as important as the Middle East, Afghanistan, and Pakistan on the list of international priorities. But Kazakhstan is an exception for its importance in both extracting and transporting hydrocarbons and its location between China, Russia, and Central Asia proper.

Europe and Russia are primarily interested in Central Asia’s stability. The region is located close to conflict zones, primarily Afghanistan. Imagine for a moment what would happen if it were to receive impulses from Afghanistan and a strong push for political Islam appeared. The consequences could be devastating.

Central Asia is often viewed in terms of Afghanistan and Pakistan. U.S. political scientist Frederick Starr suggested a plan for Greater Central Asia and included Afghanistan in it. Under certain circumstances, this approach is justified.

Shestakov: If we employ such notions as “strategic ally,” “forced partnership,” or “cohabitation,” how would you describe Russia’s relations with Central Asian republics?

Malashenko: First, Russia and the Central Asian republics all have their own national interests. They may overlap, but they may also be mutually exclusive. One Central Asian vector is directed at Russia, another at China, and there are also American and Muslim vectors. Russia and these countries not only maintained economic, political, and cultural contacts over decades but also lived together in one country. However, this post-Soviet heritage must be approached with great caution. I don’t think that our common Soviet past means unqualified gravitation towards Russia. Its appeal is declining in Central Asia. They have their own national interests that overlap with those of Russia, but do not necessarily coincide. Russia cannot offer the Central Asian countries modern technology or, to put it simply, enough money.  

Moreover, Russia committed many mistakes with regard to Central Asia. Sometimes Moscow approached this region as the former Soviet Union, but, on other occasions, it gave it complete freedom, telling it to go wherever it pleased. Russia failed to define its

national interests in Central Asia and interpreted them too ineptly. It lost an opportunity to influence the domestic policy in these states. They don’t have a pro-Russian lobby anymore. There are individuals who, for personal reasons, would like to be closer to Russia, but there are no longer any parties or interest groups that would treat Russia as a primary strategic partner.

Russia has lost its cultural influence in the region, as the waning use of the Russian language shows. In Central Asia, young people do not speak Russian as well as their parents, even in cities, and it is very difficult to build normal relations without a cultural presence.

Shestakov: But isn’t the large-scale migration of Central Asian guest workers to Russia the best indicator of our country’s appeal?

Malashenko: We have appeal only because these guest workers cannot get to Belgium or the Netherlands. Russia’s appeal is limited to the chance to earn money. Migrants do not know Russia or Russian. They have come to make money, and they are lucky if they are not cheated, beaten, or even killed. Guest workers are not a factor of rapprochement or mutual understanding. People treat them well in some places, but are hostile to them in others.

And don’t forget that many of them are Muslims and need new mosques. When they return home, they do not bring Russian culture or even respect for Russia with them because they are cheated and even murdered here. So I wouldn’t look at guest workers as a strong bridge between Russia and Central Asia.

Nevertheless, it is probably possible to turn guest workers into a factor of rapprochement. But this is a formidable task, and there are many difficulties involved.

Shestakov: But if you look at the relations between Russian leaders and their counterparts in Central Asia, they seem all but ideal.

Malashenko: No, they are far from ideal. Look at their elites. By age and mentality, they are Soviet people, but they still treat Russia with suspicion.

Shestakov: But if we are losing these republics, who stands to gain them? To whom are they orienting themselves now?

Malashenko: This is not quite an appropriate question. When we say “gain,” do we mean a desire to establish control over them? The Americans view their presence in the region primarily in terms of Afghanistan. The Chinese are acting very slowly. They are moving in this direction like a quietly marching tide. Beijing plans its policy for 20 or even 50 years ahead. That is China’s political culture and tradition. Its presence in Central Asia is inevitable, and the Chinese don’t see it as expansion. They say: “We have different cultures, and we don’t want to suppress anyone. But a sea is always bigger than a pond.” 

As to who needs Central Asia and who will be next to control it, the answer is nobody. Everybody will be present there.

Shestakov: Should Russia come to the aid of these former Soviet republics, or should it simply build equitable and pragmatic relations with them?

Malashenko: Russia should help them wherever it can expect returns on that help. Cooperation with Central Asia must be equitable and based on national interests. The times have passed when these republics were perceived as little brothers in need of our help under the same national flag. It makes no sense to buy their political attention by promising to pay more than the Americans. When Kyrgyzstan asks for money, we must ask whether it is able to spend it wisely to overcome the crisis or whether it is a form of political soliciting. 

Shestakov: What do Central Asian states truly need from Russia? What do we have to offer?

Malashenko: Russia can offer to be a good neighbor. There is a famous Eastern saying: when a house is sold, good neighbors cost extra. Russia may become such a neighbor by upholding regional stability and helping these countries resolve their energy problems and build infrastructure. But there is no reason to hope that Russia will be able to interfere in their domestic affairs.

Shestakov: Many RG readers believe that Russia is obligated to help these former Soviet republics because they are our Soviet-era friends and brothers.

Malashenko: Russia doesn’t have the money for that. For instance, the $3 billion in loans that EurAsEC promised Belarus is Russian money. We must pay for our own regions before paying for “fraternal republics.”

Shestakov: We have always supported our strategic partners.

Malashenko: Russia’s strategic interests lie primarily in the Tambov and Smolensk regions, which are beset with problems. Spending money on supporting our neighbors means tossing them to the wind. And someone else will support these republics tomorrow.

Shestakov: But you’d agree that the Americans always heavily invest in those states whose loyalty they seek to secure, do they not?

Malashenko: The Americans can afford to do this, but Russia cannot pay for its nominal allies with tax-payer money. We’ve done so for years. Libya, Algeria, Syria, and Egypt all owed money to the Soviet Union, and what did we receive in return? And what do we expect to receive from Belarusian President Alexander Lukashenko?

Russia has finally stopped lending large sums of money to Uzbekistan and Tajikistan,

which is only natural because the economic and political returns have been so negligible. Uzbekistan, for one, has shifted its foreign policy stance more than once: it entered the Collective Security Treaty Organization (CSTO) and then left it, repeating the maneuver with EurAsEC.

Shestakov: Perhaps they are casting themselves around like that because we stopped giving them money?  Our weaker neighbors could be looking for new patrons.

Malashenko: We don’t have the money to pay for allied relations. And why do we need them at all? For instance, there is a real problem in countering the drug trade. This is very important for all of Central Asia and Russia, but what is being done? The uninterrupted flow of drugs from Central Asia to Russia is surrounded by empty promises and a lot of idle talk.

Shestakov: Is it possible to speak of mutually beneficial projects that could unite the interests of Central Asian states and Russia?

Malashenko: There are common energy and infrastructure projects. Kazakhstan is very good at this. Central Asian countries are short of water, and Russia could become a good mediator in this respect, but, so far, this is all wishful thinking.

If Russia takes part in negotiating the supply of water in and to the region, it stands to gain quite a bit, but that’s a very difficult task, and all previous attempts to do so have fallen through.

 

This interview was originally published on www.rg.ru

National Economic Trends

12:00Corporate debt in Russia down 2.6% in Aprilhttp://www.interfax.com/news.asp

 12:00Incomes in Russia fall 7% in May – Rosstathttp://www.interfax.com/news.asp

 12:00

Unemployment in Russia plummets to 6.4% in May – Rosstathttp://www.interfax.com/news.asp

 12:00Russia boosts fixed investment 7.4% in May, way above forecasthttp://www.interfax.com/news.asp

 12:00FIXED INVESTMENT IN RUSSIA UP 7.4% IN MAY, CONSIDERABLY ABOVE FORECAST – ROSSTAThttp://www.interfax.com/news.asp

Fixed asset investments rise 2% in M5

http://www.rbcnews.com/free/20110621122715.shtml

      RBC, 21.06.2011, Moscow 12:27:15.Russia's fixed asset investments rose 2% year-on-year in January-May, the Federal State Statistics Service reported today.

      In May, fixed asset investments advanced 7.4% year-on-year and 25.8% compared to the previous month to RUB 752.9bn (approx. USD 26.72bn).

      For the record, fixed asset investments fell 0.8% year-on-year in January-May 2010, rose 5.6% in May 2010, and 6% in 2010.

June 21, 2011 12:27

Russian population falls 66,100 in 4 mths – Rosstathttp://www.interfax.com/newsinf.asp?id=253356

MOSCOW. June 21 (Interfax) - Russia's population was an estimated 142.8 million on May 1, 2011, down 66,100 from the beginning of the year, the Federal State Statistics Service (Rosstat) said.

Natural population loss decreased by 6,500 to 100,800. Migration growth compensated the losses by 34.4%.

Russia registered 557,900 births in the four months, down from 572,000 in the same period of last year; and 658,700 deaths, down from 679,360 a year previously.

The number of births exceeded the number of deaths by 20%, as a year ago.

Pr

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

June 21, 2011 12:14

Housing construction in Russia down 7.7% in May, 7.1% in 5 mthshttp://www.interfax.com/newsinf.asp?id=253346

MOSCOW. June 21 (Interfax) - A total of 2.9 million square meters of housing were completed in Russia in May 2011, 7.7% less than in May 2010, the Federal State Statistics Service (Rosstat) said.

Housing construction increased only in March, up 13.5% year-on-year. It was down 16.3% in January and 6.4% in February, and 17.9% in April.

A total of 15.3 million square meters of housing were completed in the first five months, 7.1% less than in the same period last year.

A total of 177,300 apartments were added in the five months.

Construction volume totaled 1.302 trillion rubles in January-May, 0.8% more year-on-year, including 330.2 billion rubles in May, 0.8% more.

Housing construction declined 2.4% in 2010, when a total of 58.4 million square meters of housing were completed.

Pr

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

RUB marginally weaker against the basket despite VAT and export selling http://www.bne.eu/dispatch_text15948

VTB CapitalJune 21, 2011

Despite the VAT payment due on Monday, the RUB/basket rate moved up at the opening of the local currency market and stabilised at the 33.52-33.54 level in the middle of the trading session. The general 'risk-off' market mode and weaker oil prices could probably be considered as the main factors that pushed the RUB weaker. At the same time, decent hard currency selling flows from exporters provided support for RUB with the respective USD/RUB rate closing at 28.10 as the EUR/USD rate recovered to 1.43 late Monday.

The USD/RUB turnover reached a modest USD 2.5bn, the lowest level in the last several weeks.

11:50 21/06/2011ALL NEWS

Finance Ministry’s civil council starts working.

http://www.itar-tass.com/en/c154/169551.html

21/6 Tass 205

MOSCOW, June 21 (Itar-Tass) —— Russia’s Finance Ministry’s civil council started working on Tuesday.

“Unlike other discussion bodies, the Civil Council will unite exclusively independent experts, and officials will not be its members,” Finance Minister Alexei Kudrin told the first meeting of the new entity.

The council “should not be exclusively a mere supporter of all civil organisations,” he said. “We expect professional dialogue.”

He named key objectives of the council, highlighting “organisation of public discussions of the Finance Ministry’ s initiatives” and explained that it will prepare suggestions on budget, taxation, customs and tariff policies.

“Despite the fact that the council’s decisions will be of recommendation character, I shall see to it that its most recommendations are implemented,” Kudrin said.

Today’s meeting will elect a chair person, and one of candidates is head of the All-Russian Academy of Foreign Trade Sergei Sinelnikov-Murylev. The council unites 27 experts. Kudrin said that the council will have regular meetings, about one a quarter.

Russian spring sowing near end, crop prospects goodhttp://www.forexyard.com/en/news/Russian-spring-sowing-near-end-crop-prospects-good-2011-06-17T144523Z#{%22widget_height%22:{%22widget%22:%22registration%22,%22height%22:0}}

Friday June 17, 2011 11:45:14 PM GMT

SOWING/RUSSIA

* Spring wheat sowing 99 percent over

* Final grain sowings area seen slightly lower than targeted

* Weather favours crop development until June 20

* Sunseeds, sugar beet areas above target

By Aleksandras Budrys

MOSCOW, June 17 (Reuters) - Russia sowed 29.6 million hectares with spring grains by June 16, 97.8 percent of the targeted area and up 0.8 million hectares from a year ago, Agriculture ministry data showed on Friday.

Leading Russian agricultural analysts SovEcon believe that the acreage to be sown with spring grains this year will be 29.2 million-29.7 million hectares, slightly below the official target of 30.2 million hectares.

"One should take into account that the data provided in the course of the sowing campaign is slightly higher than the final figure by the state statistics agency Rosstat," SovEcon said in a written comment made available to Reuters.

If SovEcon's forecast proves to be accurate, the spring grain sowing acreage will be the second lowest, after last year's, since the late 1960s, it said.

The Russian Rosgidromet weather forecasting service said on its web site meteoinfo.ru that the weather is expected to be good for crop development until June 20 in both the European and Asian parts of the country.

Russia officially plans to harvest 85 million tonnes of grain this year, although a senior Economy Ministry official believes the crop may be above the targeted volume.

Last year's drought cut the crop to 60.9 million tonnes from 97 million in 2009 and 108 million in 2008.

The ministry said spring wheat had been sown on 13.9 million hectares by June 16, 99.2 percent of the targeted area and up 0.2 million hectares from a year ago, with barley on 7.4 million hectares, 96.2 percent of the target and 0.7 million hectares up.

Maize had been sown on 1.7 million hectares by June 16, or on 87 percent of the targeted area, and rice on 201,000 hectares or 98.1 percent of the target.

Sunflowers had been sown on 7.2 million hectares, 6.1 percent above the targeted area, 693,300 hectares more than a year ago, and sugar beets on 1.3 million hectares, or 4.4 percent above the target, 147,000 hectares more than a year ago.

The ministry data showed farmers had sown 649,400 hectares with rapeseed, 68,900 hectares more than a year ago and 1.1 million hectares with soybeans, up 80,200 hectares on the year. (Reporting by Aleksandras Budrys, editing by Anthony Barker)

Business, Energy or Environmental regulations or discussions

OAO Novatek, VTB Group, OAO Lukoil: Russia Equity Previewhttp://www.bloomberg.com/news/2011-06-20/oao-novatek-vtb-group-oao-lukoil-russia-equity-preview.html

By Marina Sysoyeva - Jun 20, 2011 10:01 PM GMT+0200

The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

The 30-stock Micex Index (INDEXCF) fell 1.2 percent to 1,626.14. The dollar-denominated RTS Index declined 1.1 percent to 1,858.34.

OAO Novatek (NOTK RX): OAO Novatek may acquire the natural- gas assets that OAO Alrosa, Russia’s diamond mining monopoly, sold to VTB Capital in 2009, the Siberian explorer’s press service said. Russia’s second-largest gas producer fell 4.6 percent to 330.44 rubles.

VTB Group (VTBR RM): The Russian ruble weakened 0.3 percent against the U.S. dollar and stood at 28.1424 on June 20. Russia’s second-largest lender dropped 2.6 percent to 0.08435 rubles on June 20.

OAO Lukoil (LKOH RX): Oil fell to the lowest level in four months in New York, bringing its loss from this year’s peak to more than 20 percent, on speculation Greece’s debt crisis and a weakening global economy will curb fuel consumption. Russia’s largest private oil producer slid 0.2 percent to 1,737.20 rubles.

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

InterRAO seeks anti-monopoly approval to renationalise TGK4 http://www.bne.eu/dispatch_text15948

Renaissance CapitalJune 21, 2011

Event: Interfax reported yesterday (20 June) that InterRAO had sought anti-monopoly approval to acquire a 75% stake in Quadra, formerly TGK4, and currently controlled by Mikhail Prokhorov's Onexim group (which owns a 49.9% stake). According to a Federal Tariff Service spokesman, the period of consideration for the application has been extended, as the transaction could be deemed to restrict competition.

Action: Negative for the power sector in general, in our view.

Rationale: Removing the state's influence from the competitive business of power generation has been declared a fundamental aim of Russia's power sector reforms. Moreover, as recently as last Friday (17 June), President Dmitry Medvedev publicly reaffirmed his commitment to privatisation by calling for an end to state capitalism and for a sharp reduction in the state's role in the economy. Nevertheless, Quadra has now become the latest addition to the state-controlled InterRAO's shopping list for 2011, which already includes OGK1 and OGK3. We estimate that if the Quadra deal proceeds to completion, state ownership of generation companies would rise to 54% of the national total - marginally higher than the state's shareholding in the now defunct state power sector holding company RAO UES.

Vladimir Sklyar

Russian Copper is investing USD 627 million in Mikheyevsky GOKhttp://www.steelguru.com/metals_news/Russian_Copper_is_investing_USD_627_million_in_Mikheyevsky_GOK/210795.html

Tuesday, 21 Jun 2011The Russian Copper Company, CJSC, is investing USD 627 million in the construction of the Mikheyevsky Mining and Processing Integrated Works. Gazprombank is expected to give USD 490 million. The balance will be invested by the company through selling 30% of its stake in one of the traders' organizations.

The Press Service of the Russian Copper Company has informed that USD 107 million was invested in the construction of the works in 2010. In the current year, the investment will total about USD 200 million. The commencement of production operations is scheduled for the end of 2013.

The works is being built at the Mikheyevskoye porphyry copper deposit in the Chelyabinsk Region. Its capacity is estimated at 18 million tons of ore. The output of the concentrate will amount to 65,000 tonnes a year, thus allowing the Russian Copper Company to double its output of commercial concentrate.

The Russian Copper Company was established in 2004 and is the third largest refined

copper producer in Russia. It includes mining, processing and metallurgical factories located in five regions in Russia and in Kazakhstan. The RCC factories produce 200 thousand tons of copper cathodes and 190,000 tonnes of copper rod per year.

(Sourced from www.rusbiznews.com)

Petropavlovsk Five-month Production Up 33%, On Track To Deliver 2011 Target http://www.rttnews.com/Content/QuickFacts.aspx?Id=1650344&SM=1

6/21/2011 2:35 AM ET

(RTTNews) - Petropavlovsk Plc (POG.L: News ), a London-based gold mining company with operations in Russia, Tuesday said production for the first five months totalled 158,900oz, ahead of the group's forecast and 33% higher than the comparable period in 2010. Further, the company said it remains on-track to deliver its 2011 production target of 600,000oz of gold.

Production in the second half of 2011 is scheduled to be higher than the first half, due to the contribution from alluvial operation and heap-leach operations and higher head grades at Pokrovskiy and Pioneer plants.

Total gold sold for the first five months was 197,700oz versus 120,600oz for the same period in 2010, an increase of 64 percent. The strong gold price for the year to date, less the associated increase in royalty payments, more than makes up for industry-wide inflationary pressures and foreign exchange effects on operating costs.

Norilsk Nickel to elect new board at AGM on Tuesdayhttp://en.rian.ru/business/20110621/164740186.html

11:16 21/06/2011

MOSCOW, June 21 (RIA Novosti)

Russia's largest nickel maker Norilsk Nickel will elect a new board of directors at an annual shareholders' meeting on Tuesday.

The previous AGM in 2010 led to a an intensification of the protracted struggle for control of Norilsk Nickel between two major shareholders, Russian aluminum giant RusAl controlled by Russian billionaire Oleg Deripaska, and Interros, the investment arm of another Russian billionaire Vladimir Potanin.

RusAl claims the Norilsk board became dominated by managers linked to Interros after the AGM last summer, where RusAl lost one board seat, while Interros increased its representation.

Interros tried to resolve the conflict by buying RusAl's 25 percent stake in Norilsk for $12 billion, and subsequently 20 percent of its shares for $12.8 billion but the aluminum company rejected both offers.

At a recent extraordinary shareholders' meeting, Interros gained four seats on the Norilsk board, while RusAl and Norilsk’s management, regarded as being close to Interros, got two seats each. RusAl's nominee chairs the board.Uralsib analyst Dmitry Smolin told RIA Novosti he expected no surprises from the meeting.

"I think there will be no surprises at the meeting, and the board of directors and its chairman will be the same, while (Norilsk) management and Interros will maintain control of the board," Smolin said.

NLMK Assets Abroad Frozen http://www.themoscowtimes.com/business/article/nlmk-assets-abroad-frozen/439244.html

21 June 2011

Novolipetsk Steel, or NLMK, had its foreign assets frozen by courts in Amsterdam and Luxembourg in a dispute with the founder of its Maxi Group division.

The courts imposed injunctions on shares of NLMK International and Steel Invest & Finance, said Anton Bazulev, a spokesman for NLMK. The two units own NLMK's overseas assets.

Maxi Group founder Nikolai Maximov and NLMK have been locked in a legal dispute over completion of payments and the repayment of Maxi Group's debt since NLMK bought the steel-mill operator in 2007. Maximov won the right to seek the injunctions after a Moscow arbitration court at the Chamber of Commerce and Industry ruled that he could demand 9.6 billion rubles ($340 million) from NLMK, he said.

(Bloomberg)

Cash-for-clunkers programme draws to an end: Who will be most affected?

http://www.bne.eu/dispatch_text15948

Renaissance CapitalJune 21, 2011

Event: RBC Daily reported today (21 June) that the cash-for-clunkers programme will be soon come to an end, and that almost all rebate certificates have already been distributed. Under the programme, which was launched in March 2010, almost 600k certificates were issued.

Action: In our view, the end of the programme will be negative for AvtoVAZ, and neutral for Sollers.

Rationale: Although PC and LCV sales will still be supported by cash-for-clunkers sales in the next couple of months, the end of the scrappage programme will have a mostly negative impact on automakers' sales this year. AvtoVAZ was a main beneficiary of the cash-for-clunkers programme, with Lada cars reportedly accounting for around 80% of total cash-for-clunkers sales, and cash-for-clunkers making up the main part of total AvtoVAZ sales. Therefore, AvtoVAZ's sales, which have already shown decelerating growth in recent months, will now come under additional negative pressure. Other beneficiaries from the programme received significantly lower support from clunker sales than AvtoVAZ; these reportedly were Renault, Skoda and Ford, which had respective total scrappage sales of 7.3%, 5.3% and 2.3%. We do not expect Sollers's sales to be significantly affected by the scrappage programme coming to an end, and expect any losses in this respect to be offset by growing demand.

Alexandra Serova

INTERVIEW: Sergei Petrov - Russia's billionaire car salesman http://www.bne.eu/storyf2745/INTERVIEW_Sergei_Petrov__Russias_billionaire_car_salesman

Ben Aris in Moscow June 21, 2011

Sergei Petrov cuts a diminutive and modest figure compared to the crowd in the lobby of the Ritz Carlton hotel in central Moscow. That's somewhat surprising because the founder of Russia’s biggest car dealership Rolf is probably the richest man in the room by far, and Russians are hardly known for understatement when it comes to displaying their wealth.

A taxi driver who built a car dealership empire, its not only Petrov’s clothes that buck the trend. He grew rich from selling cars, one of Russia’s most corrupt businesses, but it appears that he's remained scrupulously honest whilst doing it, concentrating on quality of service rather than nefarious schemes.

“We had to be strong and competitive and we civilised this business,” claims Petrov. “In 1992 importing cars was little more than a smuggling operation, and people didn’t know how to make real money. But we always tried to do it legally; later other companies followed us.”

Today Rolf has 28 showrooms in Moscow and St Petersburg, Europe’s biggest and second biggest cities respectively, which have a combined population larger than any of the Central European countries, bar Poland.

Business is flourishing. The 2008 crisis hurt Rolf along with everyone else, but the company’s turnover was already back to well over $4bn in 2010, even if profits were halved. Petrov is a poster boy for the potential for real business founded on Russia's rapidly growing middle class.

“Is Russia better today?" he asks rhetorically. "Yes, things are better than when we set out on this path 20 years ago, but we hoped for much more.”

Taxi entrepreneur Petrov had a fairly normal Soviet upbringing. He was born in city of Orenburg in the Urals in 1954 and became a military pilot until he was forced to quit after the KGB accused his unit of “anticommunist activities” in 1982. He moved to Moscow and retrained at the Soviet trade university, graduating in trade relations in 1987.

Peristroika and the subsequent collapse of the Soviet Union threw everyone in Russia into reliance on their own resources, but also wiped the slate clean. Petrov had been running the driver pool at a Moscow construction company Mosinzhstroy, but left in 1991 to set up his own company that provided drivers to many of the international companies that moved into Russia after the Iron Curtain fell.

“We had a fleet of cars and the international companies needed reliable drivers. I drove one and helped the clients carry their cases,” says Petrov.

Petrov obviously got on very well with his clients, so when he approached the head of Mitsubishi Russia for a soft loan to expand his fleet, he was instead given 40 new cars imported from Finland with no down payment and no collateral – a loan he was able to pay off almost immediately as the business flourished. A year later, the newly established Rolf won a tender to become the first official Mitsubishi car dealer in Russia.

Despite the economic chaos and hyperinflation that wracked the country at the time, Rolf grew extremely fast. Not everyone had been ruined by the collapse of the old system; Rolf’s first customers were high government officials and the newly minted “Russian mafia,” mostly traders capitalising on the mismatch between Soviet-era valuation on goods and assets and those in the international markets.

“We earned enormous money [in the early 1990s],” Petrov remembers. “After Yeltsin introduced trade exemptions for charities as way of funding their work, we were

approached by one and imported the cars under this scheme without duties. We had to pay a third of the duties and were making about $20,000 per sale. It was a lot for a small company like ours.”

The first half of the 1990s operated on this huge arbitrage and made multimillionaires out of fast-moving businessmen literally overnight. Petrov tells a story of going to Japan to present to carmakers and explaining that the Russian market consisted of the top 5% of society who had money in spades, but below that was a retail desert.

“Luxury goods was the only stable market then. The fish were there – mainly high government officials, oligarchs and mafia,” says Petrov. “The rest of society, about 80% of the population, had nothing.” However, as the economy began to pick up the car market slowly expanded, and by the late 90s Rolf had made Mitsubishi the best selling car in Russia outside the luxury segment.

The 1998 crisis was another blow but hurt Rolf less than its competitors as Petrov had already built up several business lines. In addition to retailing cars, the company sold them wholesale to companies, serviced them and had established a second hand sales unit. Competitors concentrating solely on importing were forced to slash costs, but Rolf could sustain itself on its other businesses to absorb the loses from devaluation.

Fear vs greed Over the first six months of 2008 Russia briefly became the biggest car market in Europe, selling 1.65m units to overtake former champion Germany. Then the latest crisis hit. However, despite the collapse that induced, sales of passenger cars and light commercial vehicles were up 30% in 2010, according to David Thomas, chairman of the Association of European Businesses (AEB). The uplift continues this year, and Russia is set to take back the crown in 2015 according to industry experts.

Already representing many of the world’s leading brands - including the increasing number of domestically-produced foreign brands such as Ford, Toyota, and Volkswagen - Rolf will ride this wave. But building up the business has not been easy.

Firstly the company has always been forced to grow using retained earnings. “We've never gone to the banks for finances. The cost of money is so high that if you take loans there is no profit,” says Petrov. “The only financing we have ever taken was from Mitsubishi when we started importing more than 100,000 cars a year in 2007.”

Secondly there is the bureaucracy, especially in the import business. Petrov’s solution to this snafu was to build his own car import terminal in St Petersburg, which takes all logistics out of the hands of the customs service, leaving them only to carry out inspections. This smoothes the supply of product to his dealership network.

However, Russia’s lawlessness has been the biggest obstacle. Organised crime was reported to control Russia's car distribution networks throughout the 1990s, and imports arrived via schemes designed to avoid what were crippling import duties. However,

Petrov declares that he stuck to his principles and insisted all his cars were brought in legally.

“It was a battle of greed vs fear - and fear won. When we started selling Audis my sales staff were de-motivated,” says Petrov. “Other dealers could offer a $2,000 discount on any car compared to our prices.” However, when Vladimir Putin took over as president and threw oil magnate Mikhail Khodorkovsky into jail for tax evasion, Russian companies started to “go white”. The message was to business was clear: pay your taxes or else.

From oligarchs to taxpayers In late 2007 Petrov moved beyond the business world; he joined the political party Just Russia and was elected Member of Parliament for his home town of Orenburg. He's also a member of the parliament’s Budget and Taxes Committee, but he seems frustrated by the lack of action in parliament. The Duma needs to take liberal actions but we do just the opposite: there is pension fund spending as there are elections coming up and reforms are on hold,” he complains.

The point is pertinent for the future of Rolf. The company is entirely dependent on the ongoing emergence of a Russian middle class, but the car salesman worries that the structure of the economy is so geared towards the state that rapid progress is unlikely. “Only 20-30% of the economy is really competitive,” Petrov estimates. “The rest is state business and business connected to the state or the regional authorities."

A state dominated economy has a fundamental effect on the attitude and plans of entrepreneurs, producing a way of thinking in which the main goal is to win privileges from the authorities. Many of Russia’s most powerful firms could not compete with the best of the international firms in an open market, he argues. “It corrupts you. My peers look at investments over a maximum of five years. They're prepared to invest into chickens, which produces money quickly, but not beef as it takes five years just to build up a herd.”

Many Russians, particularly the younger ones, are getting frustrated and Petrov repeats an increasingly recurrent complaint that the country's brightest and most successful businessmen are choosing to leave the country, frustrated with the slow pace of reform.

“The whole establishment is dedicated to Putin – they've all benefited from the last 12 years and naturally want to protect what they've built up because they can't compete in an open environment. They need protection,” Petrov says. “People are asking 'what's the point of staying when our skills are deteriorating?'"

Still, the Rolf founder is staying put. In many ways Russia is still at the start of the reform process, or at least at the start of the next phase: the basic problems have been solved and Russian Inc is in profit, but now the more difficult task building a system that can deliver long-term growth starts. The alternative is stagnation, and then social unrest.

“Russia is becoming normal, but mainly because people are spending money, which is ultimately all coming from oil,” says Petrov. “In the long run I'm optimistic [about Russia’s future], but in the short-term we need to increase the number of people that think private business should be the main driver of the economy. We need to change people’s mentality and change them from state dependents to regular taxpayers.”

Transportation, construction and infrastructure - Trends in March-April 2011 http://www.bne.eu/dispatch_text15948

Renaissance CapitalJune 21, 2011

Today (21 June), we release Russia: Transportation, construction and infrastructure - Trends in March-April 2011.

Manufacturing is slowing and inflation is subsidingEconomic growth in 1Q11 was largely driven by the utilisation of a low-base effect in manufacturing, which posted 12.9% YoY growth while the majority of other sectors showed moderate growth rates of between 1.5-3%. This, we believe, will not be repeated in 2Q11 since manufacturing has already slowed to 5.3% YoY in April 2011. The global weakening of demand for commodities does not bode well for either Russia as a whole or for its export-oriented industries and as a consequence for rail, ports and shipping. The 9.6% headline inflation figure for May is likely to tail off from August and RC forecasts 7.5% CPI for 2011. Surprisingly, food prices fell in May and if indeed inflation moderates, we expect to see more 'money' available for discretionary spending. Thus far, consumers were spending more as a hedge against high inflation despite the fall in real disposable income levels YtD.

Commodities flatBoth production and consumption of main commodities were flat in March-May with some categories, like iron ore for example, showing a fall in domestic demand. Transportation has not reflected these trends yet and it might be that bulk rail transportation and bulk port-throughput in June-July will weaken. With more bulkers and container ships coming on stream, there is no recovery in sight for sea-freight rates.

Robust consumer spendingThe growth in the three categories where consumer spending is the most visible either strengthened or remained strong in March-May. Auto sales, which moved into the mid-range car category, have been getting stronger from March fuelled by delayed consumption and better availability of car credits. Container shipments into Russia slowed down somewhat in the past three months but remained robust, fuelled by the demand for imports while airlines saw a recovery in travel after April especially to international destinations. The start of the holiday season, while especially beneficial for charter carriers, is also strongest for Aeroflot.

Encouraging construction dataThe strongest positive data in the past three months came from the construction sector which showed continued strength. Basic and construction material transportation remained strong, the prices of basic materials that started to grow from 2011 for the first time since the economic crisis, continued to grow in March-May. The value of signed construction contracts are rising as well which, together with sluggish completion of residential dwellings, indicates either a revival in commercial activity and/or spending on infrastructure. The only category of leased railcars seeing an increase in prices in March-May was for cement hoppers.

Autos and constructionWe highlighted rail operators in our previous issue as the best pick in the sector and these companies have indeed done well especially Transcontainer - we think its 'for sale' status contributed to the share strength more than its results or even the strength of the container market. We now believe that auto producers of mid-range cars, where sales have been growing most rapidly, are worth a look. Sollers, which fits well into this category and is one of only a few auto producers which declared an increase in domestic production and actually received funding from VEB, finalised its JV with Ford and plans to start new production from January 2012, is trading at very attractive multiples and has a lot of tailwinds from strengthening consumer spending. Construction companies, which we don't cover at the moment, showed good performances already but are still worth a look as the market continues to show increased demand for construction materials, rising prices and increased value of contracts signed.

PortsLastly, the market may pay attention to NCSP, whose share price performance has been disappointing YtD. While neither overall throughput dynamics nor strong rouble support the share price revaluation, the ongoing placement of Global Ports done at valuations which are around 15-25% above those of NCSP on our estimates, may suggest some short-term rerating potential for NCSP shares. We expect 2H11 to bring more activity to the stock with grain export bans set to be lifted from 1 June and grain transportation through NCSP expected to be encouraged. Grain transportation previously accounted for around 10% of total volumes and around 15% of revenue in 2009 (however, grain export forecasts currently are not that high, so the final effect for FY11 may not be that significant). At the same time, the privatisation of a 20% stake in the port remains an issue on the agenda for 2H11 as well.

Activity in the Oil and Gas sector (including regulatory)

Lukoil hopes to restart operations at Odessa Oil Refinery this yearhttp://www.steelguru.com/russian_news/Lukoil_hopes_to_restart_operations_at_Odessa_Oil_Refinery_this_year/210734.html

Tuesday, 21 Jun 2011Interfax citing Mr Valery Subbotin Lukoil vice president as saying that Lukoil oil company hopes to restart operations at Odessa Oil Refinery in 2011 with the injection of Urals blend oil which will be supplied via the Yuzhnyi port.

He said that "We won't be working with Azeri Light oil blend. He added that Russian Prime Minister Mr Vladimir Putin instructed Transneft three weeks ago to work on ensuring the supply of Urals blend to Yuzhnyi Port at a volume of 9 million tonnes annually.”

Owing to the situation that has arisen on Ukraine petroleum product market as well as changes in oil supply, Odessa Oil Refinery halted operations in October 2010 owing to low operational efficiency. Also, at the start of 2010, the refinery stopped operating for a month and a half of repair-time.

Total refining at the facility dropped by 29.4% in 2010 to 1.4 million tonnes.

(Sourced from Interfax)

Alliance Oil, Spain's Repsol to set up joint oil venturehttp://en.rian.ru/business/20110621/164740914.html

11:50 21/06/2011

MOSCOW, June 21 (RIA Novosti)

Russia's Alliance Oil has reached agreement with Spain's Repsol to set up a joint venture for oil production in Russia, Kommersant business daily reported on Tuesday.

Repsol, which has a 3.2 percent shareholding in Alliance Oil, will hold a 49 per cent stake in the joint venture while the Russian company will hold 51 percent. Alliance Oil is expected to contribute its assets in the Volga-Urals region to the joint venture while Repsol will pay $200 million in cash to the joint venture's equity and pay another $200 million to buy stock in the joint venture, the paper said.

The two companies will also jointly explore for new oil deposits. Kommersant quoted Repsol Chairman Antonio Brufau as saying that cooperation with Alliance Oil would allow the company to boost production and gain access to new assets, while Alliance Oil said Repsol would provide know-how and technical support for the project.

The deal will be finalized after the companies conduct due diligence of assets to be contributed to the joint venture and receive the necessary corporate and governmental approvals. Alliance Oil expects the procedures to be completed this year, the paper said.

Alfa Bank analyst Pavel Sorokin told the paper the Volga-Urals assets of Alliance Oil include 2P reserves of 171.48 million barrels of oil equivalent, meaning the deal will increase the company’s capitalization to a value approximating to $3.50 per barrel, while currently the company’s shares are traded at $3.30 per barrel, compared to $2.50 per barrel for similar oil companies.

Kommersant quoted VTB Capital analyst Svetlana Grizan said the joint venture with Repsol was a positive step for the Russian company due to its high leverage and the need for investment in its Khabarovsk oil refinery in the country's Far East. The newly-formed company could get new licenses for Russian deposits that are not of interest to state-run companies, she said.

12:18 21/06/2011ALL NEWS

Int’l exhibition “Oil and Gas” opens in Moscow.

http://www.itar-tass.com/en/c154/169596.html

21/6 Tass 17

MOSCOW, June 21 (Itar-Tass) —— More than 1,000 oil and gas companies from 36 countries will take part in the 11th international exhibition “Oil and Gas” which is opening at the exhibition complex Expocenter in Moscow on Tuesday.

As ITAR-TASS learnt at the exhibition organizing committee, “leaders of the native and world oil and gas industry will present the latest developments and technologies, as well as discuss topical problems of the sector and tasks for a year at the exhibition.”

Russian Minister of Energy Sergei Shmatko will open the exhibition. Director of the Institute of Problems of Oil and Gas of the Russian Academy of Sciences Anatoly Dmitriyevsky, first deputy chairman of the State Duma for natural resources Valery Prozorovsky, general director of the National Energy Security Fund Konstantin Simonov, President of the Union of Oil and Gas Industrialists Gennady Shmal and others will take part in the work of the exhibition.

Within the framework of the exhibition, the ninth Russian Oil and Gas Congress will be held. During three days, about 900 delegates will take part in round-table meetings, plenary meetings, seminars, meetings devoted to issues of modernization of the Russian oil and gas sector, geological prospecting and production of oil in the country and problems of development of strategic oil and gas alliances.

The exhibition “Oil and Gas” and the Russian Oil and Gas Congress are held with support of the Russian Ministry of Energy, the Russian Ministry of Natural Resources

and Ecology, the State Duma, the Federation Council Committee on natural resources and environmental protection and the Russian Union of Industrialists and Entrepreneurs.

The events will end on June 24.

Gazprom

Gazprom to launch Sakhalin-3 Kirinskoye field in '12http://www.reuters.com/article/2011/06/21/gazprom-idUSLDE75K0DM20110621

3:52am EDT

MOSCOW, June 21 (Reuters) - Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) will launch the Kirinskoye field, part of its Sakhalin-3 project, in the second quarter of next year, Gazprom Deputy Chief Executive Alexander Ananenkov said on Tuesday.

"To launch Kirinskoy we are conducting intensive works on an underwater drilling complex and preparing personnel," Ananenkov told a news conference.

"We will for the first time unite drilling technology with an underwater platform," Ananenkov said. "This will happen for the first time at Kirinskoye."

Among other fields destined to supply Pacific customers, he said, gas production at the Chayandinskoye field would be launched in 2016.

Commercial deliveries via a planned pipeline to link the Pacific fields at Sakhalin with the coastal city of Vladivostok and the Chinese border city of Khabarovsk, will start in 2017, Ananenkov said.

(Reporting by Jessica Bachman and Melissa Akin; editing by Alfred Kueppers)

21.06.2011

Shtokman Start-Up Might Be Delayedhttp://www.oilandgaseurasia.com/news/p/0/news/11704

Gazprom has applied to have the start-up date for production at the Shtokman field in the Barents Sea moved one-two years, to 2017-2018.

According to Head of the Federal Agency for Natural Resources Anatoly Ledovsky, the

application will be approved, Gazeta.ru writes. – We are not yearning to take licenses away from license holders that are really working, he said.

In April project partners Gazprom, Total and Statoil all agreed that pipeline gas will start to flow from field installations in 2016 and that LNG production will start up in 2017, as reported by BarentsObserver. A final investment decision is waited by the end of the year.

Several experts have over the last years cast doubts over the project, especially as international gas markets have experienced quick and major changes and Gazprom suffered several setbacks on the European market.

Earlier this month it was announced that Gazprom is preparing 25-year contracts on supply of 7.5 million tons of LNG annually to three Indian energy companies. The annual volume covered by the Indian deals is equivalent to the projected annual LNG output of the Shtokman field.

The Shtokman field is located about 600 km north of Murmansk and includes a number of unprecedented technological challenges. The field contains as much as 3,9 trillion cubic meters of gas. It will be developed by the Shtokman Development AG, a joint venture of Gazprom (51%), Total (25%) and Statoil (24%).

Copyright 2011, Barents Observer. All rights reserved.

Gazprom Neft Selects Schlumberger to Drill in Iraqhttp://www.oilvoice.com/n/Gazprom_Neft_Selects_Schlumberger_to_Drill_in_Iraq/eaeb8a0c6.aspx

Monday, June 20, 2011

Following a tender, Gazprom Neft has chosen Schlumberger to drill the first wells in the Badra oil deposit development project in Iraq. Upon signing the contract will last for three-years. On 9 June, Gazprom Neft, as the project operator, obtained approval to sign an agreement with Schlumberger from Iraq's state-owned North Oil Company (NOC), part of the Iraqi Oil Ministry.

The contract with Schlumberger will involve three drilling rigs, with the drilling of the first appraisal and development wells expected to be completed in early 2012. A total of 11 wells are to be drilled over the three-year period, including one exploratory and three appraisal wells, which will later be converted into operating well stock.

'The commencement of drilling at the Badra oil deposit will be yet another important step in the implementation of this project. The formation of operating well stock will enable us to meet the primary objective of the consortium's participants: to begin production at

the oil deposit in 2013, as stipulated in the service agreement,' commented Boris Zilbermints, Deputy CEO for Exploration and Production.

REFERENCE

The Badra oil deposit is located in the Wassit Province in Eastern Iraq with estimated reserves of 3 billion barrels of oil. The contract to develop the Badra oil deposit was signed with the Iraqi Government in January 2010 following a tender in December 2009. This tender was awarded to an international consortium comprising of Gazprom Neft, Kogas (Korea), Petronas (Malaysia) and ???? (Turkey).

Gazprom Neft's share, as lead operator on this project, is 30 per cent, Kogas' share is 22.5 per cent, Petronas' share is 15 per cent and ????'s share is 7.5 per cent. The Iraqi Government, represented by the Iraqi Oil Exploration Company (OEC), retains 25 per cent.

Oil production at the deposit is expected to begin in 2013. Production is expected to reach 170,000 barrels per day (around 8.5 million tonnes a year) by 2017 and remain at this level for seven years.

Gazprom Neft completed a 3D field seismic survey at the deposit in early May 2011. The preparation of the front end engineering design (FEED) will be completed in summer 2011.

Heads of Gazprom and SOCAR meet in Moscowhttp://en.trend.az/capital/energy/1894182.html

20.06.2011 22:22

Azerbaijan, Baku, June 20 /Trend/

On Monday, the central office of the Russian Gazprom hosted a working meeting of company's Chairman Alexey Miller and the President of SOCAR (State Oil Company of Azerbaijan) Rovnag Abdullayev, Gazprom said in a statement.

"The sides discussed bilateral cooperation in energy sphere. The activities of Gazprom and SOCAR on gas supplies from Azerbaijan to Russia were appreciated," said the statement.

It was noted that the development of partnership of companies is one of the strategically important areas of cooperation between the two countries in the long-term period.

Medium-term contract (with possibility of extension) for the sale of Azerbaijani gas to Russia was signed between SOCAR and Gazprom in Baku on Oct. 14, 2009. According to the supplement to the contract signed in early September 2010 in Baku, in 2011

Gazprom will receive two billion cubic meters gas, in 2012 - over two billion cubic meters.

Supplies of Azerbaijani gas to Russia began from Jan. 1, 2010.

Under the contract, SOCAR exported about 800 million cubic meters of gas to Russia in 2010.

Do you have any feedback? Contact our journalist at trend@trend.az

Partnership with Azerbaijan ‘strategically important direction’ – Gazpromhttp://www.news.az/articles/economy/38822

Tue 21 June 2011 04:48 GMT | 6:48 Local Time

Gazprom head of director’s board Alexei Miller and President of the SOCAR Rovnag Abdullayev met at the central office of Gazprom.

1news.az reports,citing the website of Gazprom, that the parties discussed bilateral cooperation in energy sector. They praised the activity of Gazprom and SOCAR in the sphere of gas supplies from Azerbaijan to Russia.

It was also noted that development of partnership between the companies is among the strategically important directions of interaction between the two countries for the longer-term perspective.

1news.az

Beltransgaz Working Conditions Cause Gazprom Headache Rather than its Price http://telegraf.by/2011/06/beltransgaz-working-conditions-cause-gazprom-headache-rather-than-its-price.html

20.06 14:59

June 20, Alexander Medvedev, Deputy Chairman of the Russian company Gazprom, reported on the negotiations of Beltransgaz shares purchase to continue the coming week. "It's rather about effective working conditions at Beltransgaz than its 50% stock price," said Alexander Medvedev.

"We can hardly accept the situation where we are counting on certain conditions, which may appear to be different. We are sure to make it work at full capacity," IA "REGNUM-Belarus" citing Gazprom deputy head.

As Telegraf previously reported, Russian Gazprom, owning Beltransgaz 50% shares, is currently in talks to purchase the remaining shares of the Belarusian company. Belarus demands Russian domestic gas prices for deliveries to Belarus as one of the prerequisites for Beltransgaz shares sale. At the same time, Gazprom does not intend to attribute the purchase of Beltransgaz controlling stake to the gas prices for Belarus.

Gazprom is not allowed to “manipulate”http://rt.com/politics/press/gazeta-ru/gazprom-gas-hub-eu-commission/en/

Published: 21 June, 2011, 08:05Edited: 21 June, 2011, 08:05

The European Commission has blocked Gazprom’s entry into the capital of the stock exchange for spot gas trading Aleksey Topalov

The European Commission has blocked Gazprom’s entry into the capital of the Austrian stock exchange for spot gas trading. Fearing “an enslavement” of Europe, officials presented the company with some unacceptable conditions, basically asking “for an arm and a leg”, said head of Gazprom Export, Aleksandr Medvedev. Their position contradicts the interests of European consumers, say experts.

Europe does not want to give Gazprom access to the end consumer. The European Commission has blocked Gazprom’s purchase of a 50% share in the gas trading platform of the Central European Gas Hub GmbH (CEGH), the head of Gazprom Export, Aleksandr Medvedev, said on Monday. The trade volumes of the CEGH, which is located in Baumgarten in Austria, amount to about 2 billion cubic meters of gas per month. Last year Austria, itself, purchased 5.5 billion cubic meters of Russian gas; Gazprom covers about 80% of the country’s consumption – thus the CEGH is not only important for supplies to Austria, but to other countries in Europe as well.

Today an 80% stake in the CEGH belongs to the Austrian energy company, OMV, and 20%- to the Vienna Stock Exchange. In 2008, Gazprom signed an agreement with the Austrians on entry to the CEGH and has been waiting for the governing bodies of the European Union and Austria to reach a decision.

“We did not hide our desire to enter into this hub,” said Medvedev. “We have an understanding that the liquidity of this hub depends on us. The European Commission, despite our partners’ wishes, began looking for a hidden motive, indicating that we want to enslave Europe through this hub, trying to claim we have some sort of intentions, which we do not.”

If the European Commission does not “presume Gazprom to be honest, then let it ensure the hub’s liquidity on its own,” he added: “The European Commission’s disapproval is very short-sighted. They presented us with unacceptable conditions for participation. They demanded we give them an arm and a leg in order to join this hub. I hope that, sooner or later, business logic prevails.”

The conditions presented by the European Commission are not being disclosed by Gazprom, nor are the conditions on which the Russian monopoly based their wish to buy a 50% stake in the CEGH.  Stock exchanges similar to the Central European Gas Hub are mainly utilized to meet consumer demand during its upsurge, such as in the winter season. They are used to provide spot (one-time) gas supply to the consumers, who for one reason or another do not have enough energy. Thus, spot prices are formed at the hubs.

Acquisition of a share in the hub would give Gazprom access to the end consumer, notes Vitaly Kryukov, an expert with IFD Kapital. “Apparently, this did not suit the European Commission, which is concerned about a rise in Gazprom’s influence on the European market,” suggests the analyst. “This would ensure Gazprom had flexibility of supply in terms of price, as well as in volume.”

Back in 2009, head of the Austrian E-Control, Walter Boltz, expressed concern that Gazprom could use the CEGH to manipulate gas prices by increasing or decreasing supplies.

“But the European Commission’s position contradicts the desire of European importers to purchase Russian gas at the spot prices,” says head of East European Gas Analysis, Mikhail Korchemkin.

JUNE 21, 2011

Gazprom Chases China Pipe Dream http://online.wsj.com/article/SB10001424052702304070104576397893650631056.html

By LIAM DENNING

Failing to sign up 1.3 billion potential customers for your product would count as an immediate setback in most businesses. But Gazprom isn't most businesses.

Having failed to sign a long-term supply contract with China last week, the Russian natural-gas giant believes there is a good chance it will still agree to one by the end of the year. The key issue is price. Gazprom makes most of its profits selling gas to Europe at prices linked to the oil market. This year, the company expects these to average more than $11 per million British thermal units.

If Gazprom is to invest in supplying China, it will want to charge close to the European price. Yet if China is to double its gas consumption by 2015, as it aims to do, it needs discounted prices. Like Russia, China subsidizes household energy bills, linking prices to the wholesale cost of domestic gas, which is less than half what Gazprom charges Europe, according to J.P. Morgan Cazenove. Even so, gas accounts for less than 5% of Chinese energy consumption.

In the long run, Gazprom can't ignore Chinese demand. Nearer-term, however, it would have to divert gas from west to east, losing profits along the way. Given this, talks with China may be more valuable as leverage with existing European customers, several of which have bridled at Gazprom's contract terms.

Ultimately, though, Gazprom is losing this game. China can take competing gas imports from central Asia, Australia, and, likely some day, North America. Europe's continuing diversification of supply options, reducing its dependence on Gazprom, is why Russia seeks other markets like China in the first place. The more gas markets globalize, the less scope Gazprom has to charge the premium prices underpinning its profits.

Write to Liam Denning at liam.denning@wsj.com

Gazprom on European and Asian gas http://www.bne.eu/dispatch_text15948

VTB CapitalJune 21, 2011

Gazprom held a conference call yesterday entitled Gas Export and Enhancing Reliability of Gas Supply to Europe led by Alexander Medvedev, Deputy Chairman and DG of Gazprom Export. Medvedev also touched on potential gas sales to Asia.

From a gas markets perspective we thought the key points were as follows.

Spot and oil-linked gas contracts have converged and Gazprom expects that linkage to persist with spot trading at a premium to contract. In Gazprom's analysis the price divergence experienced in 2009-10 reflected wholesalers having over-contracted for gas purchases and the drop in gas demand resulting from the economic crisis. We agree that prices have re-linked but, in our view, the key element driving that process was the change in contracts agreed by Statoil and Gazprom that gave sufficient flexibility to their offtakers such that gas on gas competition largely ended. Consequently, instead of LNG fighting for market share and driving the spot price down to a level that makes export to the US viable, spot gas is now pricing off the price of the marginal molecule delivered to Europe, which is oil-linked contract gas (see our Recovery in Sight for Euro Pipeline Suppliers, of 9 February). However, we expect spot gas to trade generally at a modest discount to contract gas provided there is more than sufficient LNG to cover all firm demand in higher priced Asian markets and contract gas to Europe is in sufficient supply to cover all surplus European demand, which we believe does reflect the current

supply/demand situation.

As compared with our calculation for generic oil-linked contract pricing, current spot prices have recently moved to quite a significant discount of around 17% (Figure 1). Since European gas prices only fully re-converged from the end of last year, the strength of the ongoing relationship remains something of an unknown quantity. We continue to expect that the linkage will generally be tighter than it is today and we expect spot gas prices to increase prospectively as the index provisions in oil-linked pricing drive contract prices higher.

What is interesting is that this expectation of a continuing fairly tight linkage between spot and contract pricing remains far from consensus. According to Bloomberg, the consensus forecast for European spot gas (NBP) in 2011 is USD323/mcm (USD9.1/mmbtu) which compares with our currently published forecast of USD382/mcm (USD10.82/mmbtu) and the YTD average of USD329/mcm (USD9.31/mmbtu).

Turning to shale gas, Gazprom argued that shale gas is expensive relative to large scale conventional reserves and that US gas prices would recover, providing a market for LNG. We agree that shale gas is likely to be expensive to develop compared with large scale conventional resources. However, while we expect gas prices in the US to rise, we believe that shale gas economics are viable at USD 212/mcm (USD 6.00/mmbtu) and that this will cap the price. That is not a particularly attractive price for, say LNG from Shtockman, if the alternative for that gas is to sell it into Europe at current oil-linked price levels or exporting it to Asia. While we expect Asian LNG pricing to remain higher than European gas pricing, we would also expect buyers willing to enter into long-term contracts to prefer physical sourcing closer to them, which would tend to support more growth in Sakhalin volumes or new LNG developments in Eastern Russia, which Medvedev did touch on. In Europe, we do not expect shale gas to be transformative (see our Shale Gas in Europe - A Slow Burn, of 24 May).

On gas sales to China, Medvedev reiterated the hope that a contract might be signed by the end of the year. There is a clear logic to selling Russian gas to China given the planned increased in the share of gas within the Chinese energy mix and Russia's supply potential. However, China does not need Russian gas by 2015 and is therefore likely to continue to be highly price sensitive, at least for the moment, while it works out how the five-year plan goal of raising the share of gas in primary energy demand to 8.3% by 2015 from 3.7% in 2009 is to be achieved. We think China is likely to be able to contract for substantial quantities of LNG at around USD350-400/mcm, delivered to the Eastern Seaboard where the main demand is and Russian supplies will probably need to be priced competitive to that on a delivered basis.

Regarding South Stream, Medvedev stated that the project was on track for start-up by 2015. However, we doubt that South Stream is required from a supply capacity point of view by 2015 and, with Azeri gas not deliverable before 2017, we wonder if that timetable might not slip.

Colin Smith