Russia 110119

Basic Political Developments Russia wants to strengthen ties with Iran - Russian Deputy Foreign Minister

Sergey Ryabkov said that his country was willing to strengthen ties with Iran, IRNA reports. Ryabkov spoke about this during a meeting on Tuesday evening with his visiting Iranian counterpart Mohammad-Mehdi Akhoundzadeh.

Iran bans Russia's Tu-154 planes - A few days ago Director of Civil Aviation Organization of Iran Reza Nahdzhavani ordered Iranian airlines to stop flights of Tu-154 starting February 20, 2011. According to RBC, the document states that "the use of the Tu-154 is prohibited because of recent aircraft incidents and the expiration of this type of aircraft on February 19, 2011." In addition, the Iranian authorities gave all Russian pilots of civilian aircraft working in the Islamic republic two months to leave the country, reported Russian News Service.

Russia delays UN vote on I.Coast troops: envoys - "It's obviously a delay tactic," one diplomat told Reuters on condition of anonymity. Another diplomat said council members would have to satisfy Moscow's demands in order to get the resolution approved.

Lavrov, Davutoglu to discuss situation in Transcaucasus - “The sides will discuss cooperation on fight against extremism and terrorism, prospects of building a new architecture of European security in light of Russia’s initiative on adoption of a relevant agreement, cooperation in the Black Sea Region.”

Turkey, Russia sign readmission agreement - Turkey and Russia signed a readmission agreement on Tuesday, the report said. The Russian Foreign Minister and his Turkish counterpart Ahmet Davutoglu will preside over the first sitting of the Joint Group of Strategic Planning in Istanbul, during which organization of the operation of this new mechanism of the Russian-Turkish collaboration will be discussed, the Russian MFA press service reported.

Turkey will soon abolish visa requirements for Russian tourists Russian President begins visit to Jordan

o Medvedev to hold talks with King of Jordan Wedo Medvedev to meet Abdullah II of Jordano Medvedev to mark Epiphany in Jordano Erekat: Medvedev's declaration – historic step o People in Palestine like Russia, Medvedev writes in Twittero Medvedev falls short of recognizing Palestinian state - The Foreign

Ministry said in response that Russia's statement marked no change to the well-known Russian position 'published in Moscow in 1988 - in other words, 22 years ago.'

Russian air-traffic controllers did not mislead crewo Kaczynski plane crew was warned about bad weather conditions at

Smolensko Poland - Russian errors and negligence contributed to Smolensk disaster

Visa applications can now be started on-line - Applications for the issuance of invitations to receive visas to enter Russia by foreigners can now be applied for

through the website of the public services. This was reported in the Federal Migration Service.

Latvian PM against politicizing situation with ex-Moscow mayor Former CIA agent jailed for spying for Russia gets 8 more years in prison

o Imprisoned Spy Gets 8 More Years For Contacting Russia First Sukhoi Superjet 100 to be delivered to Armavia in February Russia conducts studies for nuke power plant in Turkey - A Russian delegation

visited Buyukeceli hamlet in Gulnar town of the southern province of Mersin on Tuesday. "We will launch engineering works as soon as possible," Alexandr Sperfin, a member of the 15-member team responsible for the project, told AA correspondent.

Hungarian Minister Met Rosatom Chief Executive, Napi Reports o Fellegi talks cooperation in Moscow - National Development Minister

Tamás Fellegi was on a two-day visit to Moscow to continue negotiations on nuclear energy and financial cooperation, business daily Napi Gazdaság reported. Fellegi met nuclear energy corporation Rosatom’s president Sergei Kiriyenko and Deputy Finance Minister Dmitry Pankin in the Russian capital.

Bulgaria still hesitant about Belene nuclear power plant - The report said the South Stream pipeline contributed to the diversification of gas supply routes only, yet its management was non-transparent and its implementation could prove costly due to its underwater segment.

Russia puts brakes on further nuclear cutbacks - In Russia's view, the round of disarmament which covers short-range tactical missiles dear to Moscow, balances out the West's current dominance in modern conventional forces. The US Bulletin of the Atomic Scientists estimates that Russia has 2,050 deployed tactical warheads that could be deployed in small nuclear campaigns in its periphery. The United States has just 500.

Reactor shut-down at Kola NPP - Short circuit in a cable caused closure of reactor No. 4 at Kola nuclear power plant.

'We must keep smallpox stocks' US and Russia tells World Health Organisation - Washington and Moscow are joining forces to prevent an international effort to destroy their remaining stocks of smallpox, arguing that the supplies could be needed develop a vaccine in the event of a bio-terror attack.

Khodorkovsky Verdict to Stoke Investor Concerns, Dvorkovich Says Released Russian cargo ship in China to head to S.Korea's Busan Russia's North Caucasus to see investment of $13 billion in 2011 - Some 37 major

new investment projects worth 400 billion rubles ($13.4 billion) will be implemented in Russia's volatile North Caucasus Federal District in 2001, Presidential Envoy to the region Alexander Khloponin said on Wednesday.

Muslim channel to appear in Russia Russia To Launch Muslim TV Channel - Russian reports say the satellite channel

will go on the air in February or March across Russia, home to some 20 million Muslims.93 militants killed in Chechnya in 2010., Including the three leaders of bandit groups.

Orthodox church to be built in Chechnya Grozny football team gets new coach

o Ex-Newcastle and Chelsea manager Ruud Gullit joins Terek Grozny Suleyman Kerimov is the new owner of FC "Anzhi" Makhachkala Vigils to mark murder anniversary - Wednesday marks the second anniversary of

the murder of human rights lawyer Stanislav Markelov and journalists Anastasia Baburova. Memorial vigils and demonstrations are scheduled in Moscow and other cities as attention shifts towards the trial of the suspected killers on Jan. 27

Russian Newspaper Editor Gets Early Release - A Russian journalist jailed three years ago for extortion, fraud, and defamatory language has been released from a prison in Bashkortostan, RFE/RL's Tatar-Bashkir Service reports.

Moscow government to create regional security department - "A new executive body will have the functions, which earlier performed the security department in the Moscow government."

Official's car runs over traffic cop in Moscow Reuters PRESS DIGEST - Russia - Jan 19 RIA Russian Press at a Glance, Wednesday, January 19, 2011 Epiphany in Russia holiday of people’s exultation, valiant bravado To fight alcoholism, Russian authorities target beer's status Muscovites live like gods and get best things in Russia? - All of Russia outside

the immediate suburbs of Moscow believes the myth of a separate state within Russia, called Moscow. Many believe that Moscow has better housing, better shops, and generally better living conditions. But is this really the case?

National Economic Trends Russia Extends Export Ban Into Mid-2011 - Russia has decided to expand its

grain export ban into July 2011, according to a report by the BBC.Melikyan opposes CBR's tightening

WTO Negotiator Sets Sights on April Rossiskaya Gazeta: Euro-aid - Russia is ready to finance the EU rescue fund By

Maria Zhebit Is the Consumer Nation Retreating? - Russian Shopaholics Adopt a Wait-And-See

Attitude as the Economy Struggles to Recover Widest Yield Gap Since October Signals Rate Jump: Russia Credit

Business, Energy or Environmental regulations or discussions Norilsk Nickel, Polyus Gold, X5 Retail: Russian Equity Preview BNP Paribas sues Russian grain trader for $20 mln Russian Banks Made Record Profits Last Year, Kommersant Says Banking System Earned a Record RUB550bn in 2010 Vnesheconombank reports higher RAS net profit for 2010 Rusal Defends Refusal to Sell Norilsk Nickel Shares (Update1) RusAl Looks to Chinese Yuan to Refinance $5Bln in Loans Skolkovo Fund to offer grants to high-tech start-ups Deripaska Will Build Apartments in Moscow City, Kommersant Says Ablyazov reportedly loses one of his largest assets in Russia (Eurasia Logistics) INTERVIEW: Otkritie Financial, the Charles Schwab of Russia

Microsoft switches Russian sales to rouble Media Analyst Pinpoints Problems with Russian Sell-off of State Media Holdings Russia: New Hyundai plant commences production UPDATE 1-Russia's X5 Retail Q4 sales up 35 pct Evraz Group said Tuesday that crude steel production climbed 7.2 percent in the

fourth quarter from the previous three months to 4.15 million tons. (Bloomberg) Novatek reported Tuesday that gross production in 2010 totaled 37.78 billion

cubic meters of natural gas, up 15.3 percent over 2009. (MT)

Activity in the Oil and Gas sector (including regulatory) Russia eyes higher oil product tax from March-paper Energy Ministry targets export duties rebalancing for March Rosneft: TNK-BP owners won't derail BP deal-paper Foreigners Tried to Stop Putin’s Asia Oil Link, Transneft Says Diesel Exports Halted As Russian Crude Tax Dispute Drags On

Gazprom SOCAR plans to double gas sales to Gazprom in 2011 City Could Lose Gazprom Taxes - The St. Petersburg budget could lose about 20

billion rubles in taxes from Gazprom Neft if the company selects a site for its office complex in another region of Russia after the controversial Okhta Center skyscraper plan was scrapped.

Serbia: Gazprom Neft to buy 19% more shares in Naftna Industrija Srbije (NIS) Oil extraction at Prirazlomnoye by Q4 2011

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Full Text Articles

Basic Political Developments

Russia wants to strengthen ties with Iran http://times.am/2011/01/19/russia-wants-to-strengthen-ties-with-iran/

By Times.am at 19 January, 2011, 12:25 pm

Russian Deputy Foreign Minister Sergey Ryabkov said that his country was willing to strengthen ties with Iran, IRNA reports.

Ryabkov spoke about this during a meeting on Tuesday evening with his visiting Iranian counterpart Mohammad-Mehdi Akhoundzadeh.

Commenting about the upcoming talks between Iran and the Group 5+1 due in the Turkish capital city of Istanbul, Ryabkov said Russia believes that the negotiations will help solve the nuclear dispute.

He further hoped that the Istanbul talks in a peaceful atmosphere and with mutual respect will achieve positive outcomes.

For his part, Iran’s Akhoundzadeh said the Islamic Republic of Iran has officially proved the transparency of its nuclear program several times.

According to the reports by the International Atomic Energy Agency’s (IAEA) inspectors, Iran’s nuclear activities have had no deviation from international regulations, Akhoundzadeh stressed.

For the Istanbul talks, Iran’s deputy foreign minister hoped it will achieve win-win outcomes.

About long-lasting relations between Tehran and Moscow, Akhoundzadeh said the two countries enjoy common interests.

He also hoped for deepening cooperation between the two countries in the international and regional issues as well as cultural, economic and political fields.

Group 5+1 comprises the US, Britain, Russia, France and China plus Germany.

/Times.am/

Iran bans Russia's Tu-154 planeshttp://english.pravda.ru/business/companies/19-01-2011/116565-iran_tu_154-0/

19.01.2011  

The Iranian authorities are going to introduce a ban on utilizing the Russian aircraft Tupolev starting February, 2011. This decision can be made in connection with the increasing number of incidents involving these aircraft on the territory of the republic. In addition, Iran will no longer employ foreign pilots as the country has sufficient number of its own professionals.

A few days ago Director of Civil Aviation Organization of Iran Reza Nahdzhavani ordered Iranian airlines to stop flights of Tu-154 starting February 20, 2011. According to RBC, the document states that "the use of the Tu-154 is prohibited because of recent aircraft incidents and the expiration of this type of aircraft on February 19, 2011." In addition, the Iranian authorities gave all Russian pilots of civilian aircraft working in the Islamic republic two months to leave the country, reported Russian News Service.

Currently, Iranian airlines Iran Air Tour, Kish Air Eram and Taban airlines have approximately 19 aircraft of this model. Experts believe that Iran made this decision in connection with recent incidents whose causes are much deeper than a simple

deterioration of aircraft. According to media reports, on January 24, 2010, Tu-154 made an emergency landing at the airport in Mashhad (Iran), injuring 4 people. On July 15, 2009 a passenger aircraft Tu-154 of Caspian Airlines on route from Tehran to Yerevan crashed in Iran. All 153 passengers and 15 crew members died.

A few days later, on July 24 at 6PM local time at the airport of Mashhad, IL-62 of Iranian airline Aria Airlines travelling from Tehran to Mashhad caught on fire during landing. As a result of the accident 17 people were killed (three of them were citizens of Russia), 30 people were injured. After this accident, starting August 16, 2009 the Iranian authorities banned its airlines to lease or buy used aircraft of Russian origin.

Iran cannot purchase American Boeing aircraft due to the economic sanctions imposed by the U.S. Accordingly, Iran cannot buy and use parts manufactured in the U.S. that a number of other countries use. Russian-made Tu-154 were the solution of the issue. According to the Iranian government, U.S. and European sanctions have played their role in accidents and fatalities, since Tehran is forced to buy outdated planes and spare parts in Russia, said Rosbalt.

This statement makes sense, but it does not solve the problem as such. The ban on the use of the Tu-154 makes Iran face the task of further ensuring that airlines are supplied with the units at least somewhat comparable in terms of price and quality. What can the Iranian authorities replace the Russian aircraft with? Used models of Airbus and Boeing. The lease of short-haul Brazilian aircraft is not ruled out, but such option requires a detailed study in the light of political realities. Tehran also plans to develop and create its own medium-range airliner with a capacity of approximately 150 passengers, but the statements alone are not enough.

Iran will certainly abandon the use of Russian aircraft as lately there have been too many factors not in their favor. Even more so because the authorities can make a number of statements, particularly regarding future purchase of eight Boeing aircraft and six Airbus liners.

According to Lenta.ru, Transport Minister Hamid Behbahani said that buying new planes and spare parts from foreign airlines, Iran proves the ineffectiveness of U.S. sanctions. Apotheosis of Eastern diplomacy is to hide its own problems behind political victory. However, Iran still has something to strive for in this area because in June of 2010 the UN Security Council has imposed extensive financial and military sanctions against Iran. A number of prohibitions and restrictions intended to punish Tehran for failing to dismantle its nuclear program affect the economy of Iran, as well as the military-industrial complex of the country. Nevertheless, the republic is currently not going to abandon the development of uranium enrichment and will left virtually with no air force.

Artem ChernyavskyBigness

Russia delays UN vote on I.Coast troops: envoyshttp://af.reuters.com/article/topNews/idAFJOE70I03R20110119

Wed Jan 19, 2011 7:02am GMT

By Louis Charbonneau

UNITED NATIONS (Reuters) - The U.N. Security Council on Tuesday delayed a vote on sending additional troops to Ivory Coast, where the blue helmeted peacekeepers have been under attack, due to Russian objections, council envoys said.

The 15-nation council had been set to vote on a resolution to send an additional 2,000 peacekeepers to help the 10,000 U.N. troops and police in the U.N. peacekeeping mission in Ivory Coast, known as UNOCI.

But diplomats said Russia raised last-minute objections on Tuesday about the language and the council instead discussed Sudan. The council president, Bosnian Ambassador Ivan Barbalic, later said the Ivory Coast vote would take place on Wednesday.

"It's obviously a delay tactic," one diplomat told Reuters on condition of anonymity. Another diplomat said council members would have to satisfy Moscow's demands in order to get the resolution approved.

"We need Russia on board," the diplomat said. "We have to listen to them."

British Ambassador Mark Lyall Grant confirmed that Russia, whose oil giant Lukoil is exploring for crude in Ivory Coast, had issues with the draft resolution. "They want a delay in the vote," he told reporters before the council meeting.

Alassane Ouattara is widely recognized by Western and African governments as president-elect of Ivory Coast, after the electoral commission proclaimed him winner of the November 28 presidential poll. The results were certified by the U.N. mission but rejected by incumbent Laurent Gbagbo.

Gbagbo has refused to resign and retains control of government buildings, state television and the security forces, while Ouattara's parallel administration is based in a U.N.-guarded hotel under siege by pro-Gbagbo forces.

Russia, like the United States, Britain, France and China, is a permanent veto-wielding council member and can prevent the passage of any Security Council measure.

The French-drafted resolution has already been amended to accommodate Russian objections regarding the explicit naming of Ouattara, diplomats said.

A January 12 draft text welcomed declarations of the African Union and west African regional organization ECOWAS recognizing Ouattara as the president of the world's top cocoa producer. The latest version does not mention Ouattara by name.

Reuters obtained both draft resolutions.

One diplomat said Russia's objections to the language "appeared minor on the surface." The Russian delegation had asked to reorder several paragraphs and add language on "freedom of expression," several diplomats said.

"They're not substantive objections," a diplomat said. "So we're really not sure what they are trying to accomplish. The Russians have been causing problems on Ivory Coast from the beginning because they think we shouldn't take sides."

Lavrov, Davutoglu to discuss situation in Transcaucasushttp://www.aysor.am/en/news/2011/01/19/lavrov-davutoglu/

Russian Foreign Minister Sergey Lavrov today is leaving for Istanbul to hold the first meeting of the Joint Strategic Planning Group with his Turkish counterpart Ahmet Davutoglu, vesti.ru reports.

In Istanbul, the meeting participants will exchange thoughts on a wide range of bilateral and international issues, the source reports citing Russia’s Foreign Ministry.

“The sides will discuss cooperation on fight against extremism and terrorism, prospects of building a new architecture of European security in light of Russia’s initiative on adoption of a relevant agreement, cooperation in the Black Sea Region.”

According to the source, the discussions will focus on the Middle East settlement, situation in the Transcaucasus, Iraq, Afghanistan, and Central Asia.

Iran’s nuclear program will be also addressed. On January 21-22, EU Foreign Affairs Chief Catherine Ashton will meet with Iran’s top nuclear negotiator, Secretary of Iran's Supreme National Security Council Saeed Jalili in Istanbul with participation of “the six.”

TODAY, 11:05

Aysor.am

Turkey, Russia sign readmission agreementhttp://news.az/articles/turkey/29987

Wed 19 January 2011 05:52 GMT | 6:52 Local Time

Turkey and Russia signed a readmission agreement on Tuesday, the report said.

"The wide range of areas of cooperation between the two countries included the fight against illegal migration", the Foreign Ministry said.

Russia and Turkey signed an agreement to abolish the visa regime during Dmitry Medvedev's official visit to Ankara on May 12, 2010.

According to the Ministry of Foreign Affairs, the abolition of visa regime between the two countries will make a great contribution to the development of cultural and social relations between the friendly peoples of Turkey and Russia.

According to the Foreign Ministry, the abolition of visa regime between the two countries will make a great contribution to the development of cultural and social relations between the friendly peoples of Turkey and Russia.

Readmission is a country's consent to receive back its citizens into its territory, to be deported from another country.

On January 20, Russian Foreign Minister Sergei Lavrov will pay a visit to Turkey.

The Russian Foreign Minister and his Turkish counterpart Ahmet Davutoglu will preside over the first sitting of the Joint Group of Strategic Planning in Istanbul, during which organization of the operation of this new mechanism of the Russian-Turkish collaboration will be discussed, the Russian MFA press service reported.

Besides, the parties will exchange opinions on problems of the European security, the Near East settlement, as well as situation in the Balkans, South Caucasus and other regions.

TurkishNY PanARMENIAN.Net

Turkey will soon abolish visa requirements for Russian touristshttp://www.russia-media.ru/mainmore.php?tpl=Miscellaneous&iditem=146

[19.01.11]

This year you can expect even more Russian neighbors at the hotels and beaches in Turkey. During the next two months - just before the tourist season starts - the popular holiday destination will abolish the visa requirement for Russian citizens. This was reported by the Turkish newspaper "Sabah" on Tuesday.

The final step before the abolition of the visa requirement is the signing of an agreement.

The Turkish tourism industry hopes that the visa cut would lead to more bookings from Russia tour operators.

Already today Russians are the number 2 group of tourists in Turkey with around 3 million visitors a year. Germany is the largest market with about 4 million travelers. Overall, Turkey had 26 million tourists from January to October 2010.

Germans can enter Turkey already for many years without buying visas on arrival at the airport. The same will now also apply for Russians.

The number of Russian tourists to Turkey is increasing from year to year. In the popular tourist area around Antalya the Russians are already ahead of their German "competitors". Some hotels on the south coast are working entirely for Russian customers. There was even built a hotel that is inspired by the Kremlin in Moscow.

"With the unilateral abolition of visa requirement Turkey will achieve a competitive advantage over other warm water destinations. Russian tourists will not have to stand in the visa queue at the airport and can save the visa fee - just as German tourists who have had this privilege for many years ", said tourism expert Ulrich Kreuzenbeck.

Russian President begins visit to Jordanhttp://english.ruvr.ru/2011/01/19/40273351.html

Jan 19, 2011 10:26 Moscow Time

Russian President Dmitry Medvedev has begun his visit to Jordan. Today in Amman he is scheduled to hold talks with King Abdullah II of Jordan. The parties to the talks will focus on fighting terrorism and religious extremism, a Middle East settlement, and prospects for the construction of a nuclear power plant in the Kingdom. South Korea, France and Canada have also submitted bids for the project.  The Russian president is also due to visit the historical and religious reserve The Place of the Baptism of Jesus, where Russia is building a residential compound for pilgrims. The project is due over by March this year.

Medvedev to hold talks with King of Jordan Wed

http://www.itar-tass.com/eng/level2.html?NewsID=15867936&PageNum=0

19.01.2011, 04.40

AMMAN, January 19 (Itar-Tass) -- Russian President Dmitry Medvedev has arrived in Jordan on the second part of his Middle East tour.

On Tuesday, Medvedev visited Palestinian lands and had negotiations with Palestinian National Authority President Mahmoud Abbas in Jericho on the West Bank. Later in the day the leaders opened a Russian museum in Jericho and toured a park near the biblical Fig Tree.

Dmitry Medvedev made the following entry in his Twitter blog, expressing his impressions of the tour of the Palestinian lands: "People in Palestine like Russia. It was gratifying to see the sincere emotions being expressed by folk in the streets of ancient Jericho."

On Wednesday the President of Russia is to hold talks with his old acquaintance King Abdullah II of Jordan and visit the site of the Baptism of Christ.

An official ceremony to welcome Medvedev is to be held in the main square of the Jordanian capital. According to the Protocol, the national anthems of the two countires are to be played; the two leaders are to hear a report by the commander of the guard of honour. Following that, talks in narrow and broader formats are to be held.

"Our relations are notable for activeness and a high level of trust," a Russian presidential administration official has told Itar-Tass. "There have been nine visits by Abdullah II to Russia since 2001. In February 2007, the then Russian President Vladimir Putin paid an official visit to Jordan". "As regards the developments in the Caucasus, Jordan officially took up a neutral attitude which was regarded by the West as a pro-Russian one," the official said." "In August 2008, the King sent planeload of humanitarian aid supplies to Vladikavkaz for the South Ossetian population," presidential aide Sergei Prikhodko recalled.

Dmitry Medvedev and King Abdullah II are also to discuss the construction of a nuclear power station in Jordan by Russian specialists, Prikhodko said.

"We evinced such an interest and said we are ready to cooperate," Prikhodko remarked. "However, this is not a matter of tomorrow or one or two years," he added.

"Apart from Russia, applications were also filed by the Korean, French, and Canadian sides," the presidential aide recalled. Jordan "must make a desicion about a site, and we must decide on a credit," he said.

"In the estimates of the Jordanian side, the first nuclear power unit is to come into operation in 2018," Prikhodko said.

Medvedevl's aide recallled that in 2009 Russia and Jordan had signed an agreement on cooperation in the peaceful uses of atomic energy. "It is now a matter of technology and finance. Russia will state its position at the (upcoming) talks. However, the situation depends chiefly on the Jordanian side," Prikhodko said.

After the talks the Russian President will visit the historico-religious estate "The Site of the Baptism of Christ". Over there Medvedev will tour a hospice which is being built on the river Jordan by the Russian side. More than 200,000 pilgrims and tourists visited the site last year. The RF Directorate for the Management of Presidential Property set a task of completing the construction and equipment of the compound in March 2011.

"The implementation of this unique project is of great importance: for the first time in history the Russian state has received a plot of land in this area and is erecting its own compound of buildings which will play host to pilgrims from Russia," Prikhodko pointed out.

Medvedev to meet Abdullah II of Jordanhttp://english.ruvr.ru/2011/01/19/40263360.html

Jan 19, 2011 09:20 Moscow Time

Russian President Dmitry Medvedev arrived in Jordan on Tuesday night. Today he is scheduled to meet King Abdullah II of Jordan for talks, and to visit the place of the Baptism of Our Lord Jesus Christ. During his talks with the Jordanian monarch Medvedev will take up religious extremism and a Mid-Eastern settlement, and also prospects for the construction by Russian experts of a nuclear power plant in Jordan. South Korea, France and Canada have also applied for the construction of the plant. The Russian presidential aide Sergei Prikhodko has briefed reporters on Medvedev’s visit to the historical and religious reserve The Place of the Baptism of Jesus, where Russia is building a residential compound for pilgrims. The project is due over by March this year.

19 January 2011, 11:24

Medvedev to mark Epiphany in Jordanhttp://www.interfax-religion.com/?act=news&div=8108

Amman, January 19, Interfax - Russian President Dmitry Medvedev, who is currently in Jordan, will visit the place where Jesus Christ is believed to have been baptized on Wednesday to mark the Orthodox Epiphany, i.e. the Baptism of Jesus Christ in the Jordan River.

Medvedev is also expected to visit a hospice under construction to receive Orthodox pilgrims from Russia.

This piece of land on the bank of the Jordan was passed to Russia for unlimited use at King Abdallah II of Jordan's initiative in 2006. The complex will include a hotel for pilgrims, an Orthodox church, a refectory, and a reception house for honorary guests. The

construction should be finished in March 2012.

Later on Wednesday, Medvedev and King Abdallah II will hold official talks. The two leaders met the last time during the Jordanian monarch's visit to Russia in March 2010.

Erekat: Medvedev's declaration – historic step http://www.ynetnews.com/articles/0,7340,L-4015825,00.html

Chief Palestinian negotiator says Russian president's recognition of Palestinian state will be remembered by Palestinians for long time to come. Meanwhile, Foreign Ministry admits workers' strike greatly damaged efforts to block wave of recognition of Palestine

Elior Levy

Published: 01.19.11, 08:15 / Israel NewsHours after Russian President Dmitri Medvedev declared his country recognizes an independent Palestinian state, Chief Palestinian negotiator Saeb Erekat described the statement as "an historic move to make the Palestinians proud for a very long time to come."

Medvedev's announcement found Israel embarrassed and unprepared. The Foreign Ministry admmited that the workers' union's strike greatly compromised efforts to block the wave of recognition of a Palestinian state. "We are utterly blind to what's going on," one Foreign Ministry official told Ynet.

Meanwhile, the Palestinian Authority boasted the fact that the Russian president visited the PA without first touring Israel and stressed a precedent has been set.

Medvedev said Tuesday during a visit to Jericho that Moscow had effectively recognized Palestine back in 1988 and has no intention of changing its position now. He noted that all would benefit from the establishment of a Palestinian state, including the Israelis.

Talking to Ynet Erekat noted, "We appreciate the Russian recognition of a Palestinian state on the 1967 borders whose capital is east Jerusalem."

He added that the Russian president's visit had more than political significance. "Russia signed with us a series of agreements including agriculture, communications and sports deals," he said. Medvedev announced Moscow will transfer $10 million to the PA and inaugurated the new Russian museum in Jericho, which according to Erekat is an important symbol for the Palestinian people.

The Palestinian government's spokesman Ghassan Khatib told Ynet that Medvedev's visit had met their expectations. "This visit proves how truly important international recognition of an independent Palestinian state is. Russia has an important role in the peace process as well as a positive role in the UN's Security Council, ahead of the submission of an Arab proposal draft calling to condemn Israel over settlement construction."

Medvedev left for Jordan Tuesday where he is scheduled to meet King Abdallah. Gaza media outlets affiliated with Hamas ignored the Russian president's visit to the West Bank.

Ronen Medzini contributed to this report

People in Palestine like Russia, Medvedev writes in Twitter

http://www.itar-tass.com/eng/level2.html?NewsID=15868001&PageNum=0

19.01.2011, 05.49

MOSCOW, January 19 (Itar-Tass) - Russian President Dmitry Medvedev made an entry in hisTwitter blog on Wednesday, briefly sharing his impressions of his stay in Jericho (Palestine) on Tuesday.

"People in Palestine like Russia. It was gratifying to see the sincere emotions being expressed by folk in the streets of ancient Jericho. This land needs peace," Medvedev wrote in Twitter.

On Tuesday, the programme for Dmitry Medvedev's visit began with a meeting with Head of the Palestinian National Authority (PNA) Mahmoud Abbas at the Jericho Governor's residence.

Jericho is the world's oldest city (several months ago it marked its 10,000th jubilee). It is situated in the northern part of Judaean desert on the west bank of the river Jordan in the territory controlled by the Palestinian administration. Jericho is reckoned one of the hottest places in the Middle East. In summer, air temperature there quite often rises to 50 degrees above zero (Celsius).

The Russo-Palestinian talks resulted in the signing of joint documents and were followed by a news conference. Later in the day Medvedev and Abbas opened a Russian museum in Jericho and toured a new park complex near the biblical Fig Tree near which, as the legend goes, Jesus Christ met rich publican named Zacchaeus.

The park complex has become Russia's gift to the Palestinian people and the residents of Jericho on the occasion of the city's 10,000th jubilee.

"The parkland is an important symbol of the strengthening of Russian presence in the Holy Land. The operation of the park complex will be of great importance for the development of the PNA's tourist infrastructure," presidential aide Sergei Prikhodko pointed out.

Published 02:27 19.01.11Latest update 02:27 19.01.11

Medvedev falls short of recognizing Palestinian state http://www.haaretz.com/print-edition/news/medvedev-falls-short-of-recognizing-palestinian-state-1.337845

The Foreign Ministry said in response that Russia's statement marked no change to the well-known Russian position 'published in Moscow in 1988 - in other words, 22 years ago.'

By Barak Ravid and Avi Issacharoff

Russian President Dmitry Medvedev said yesterday in Jericho that his country did not withdraw its 1988 recognition of a Palestinian state, but fell short of an new and unequivocal recognition of the state within the 1967 borders, similar to declarations made by a number of countries over the past two months.

Medvedev spoke during a visit to the West Bank described as "historic" by the Palestinian media. He was also scheduled to visit Israel, but this was canceled due to the strike by Foreign Ministry personnel.

The statement was translated from Russian and Arabic in a number of ways yesterday, with some interpretations coming close to the renewed recognition anticipated by the Israeli media.

Medvedev crossed into Jericho from Jordan via the Allenby bridge, and told reporters yesterday he was happy to visit the most ancient city in the world. He said that Russia supports a freeze on Israeli construction in West Bank settlements and East Jerusalem. He stressed that the establishment of a Palestinian state would serve not only Palestinians and Israelis, but all peoples of the Middle East, and reiterated his call for a peace summit that would bring all players in the peace process to Moscow.

The Israeli media's expectations of Russia's recognition of the Palestinian state stemmed mostly from a remark by Palestinian negotiator Nabil Sha'ath, who told the London-based Arabic daily Al Hayat that Medvedev will emphasize and reiterate Russia's recognition of a Palestinian state within the 1967 borders. Sha'ath praised the reiteration, which eventually failed to arrive, as a significant political move, due to Russia's involvement in international diplomacy and the opportunity for Russia and Europe to play a greater role

in the political process, in view of what he described as America's unwillingness to pressure Israel to follow through with its commitments to the peace process. Sha'ath also said Medvedev arrived with $10 million of aid for the Palestinian Authority, and that the leaders would sign six agreements on cooperation in various fields. He said that following the recognition by 10 out of 43 Central and South American states, Palestinians were optimistic about winning recognition from European states including Sweden, Finland, Slovakia and Norway.

The Foreign Ministry said in response that Russia's statement marked no change to the well-known Russian position "published in Moscow in 1988 - in other words, 22 years ago."

The ministry stressed that nothing in the president's words hinted that Russia recognized the Palestinian state within the 1967 borders. "Israel sees the Russian Federation as playing an important, balanced and responsible role in the diplomatic process," the ministry's statement said.

Russian air-traffic controllers did not mislead crewhttp://english.ruvr.ru/2011/01/19/40263105.html

Jan 19, 2011 09:06 Moscow Time

The report by the Minister of Internal Affairs of Poland, Jerzy Miller does not provide evidence that Russian air-traffic controllers deliberately misled the crew of the Polish presidential airliner.

This statement was made by the secretary of the Polish aviation council Tomasz Hypki. In an interview with the Voice of Russia, he noted that the air traffic controllers repeated several times that it was impossible to land.

He stressed that "the decision should have been accepted by the Polish crew.

Kaczynski plane crew was warned about bad weather conditions at Smolenskhttp://english.ruvr.ru/2011/01/19/40265104.html

Jan 19, 2011 09:49 Moscow Time

The crew of the Polish President Lech Kaczynski was warned that landing at the Severny airport near Smolensk was impossible due to bad weather conditions. This follows from the recordings of the Russian air traffic controllers that were posted on the Interstate

Aviation Committee website on Tuesday night. The Committee decided to make public the recordings following a statement by the Polish Interior Minister Jerzy Miller on the traffic controllers’ alleged errors. The Interstate Aviation Committee points out in the report, which it handed over to Warsaw earlier that the plane crash was caused by the Polish pilots’ moves. The Polish crew ignored the warning of bad weather conditions and came in to land. Later today the Polish Government is due to make public their own position on the report. The Polish President’s Tu-154 aircraft fell on April 10th last year. All 96 people, including Lech Kaczynski, died in the crash.   

Poland - Russian errors and negligence contributed to Smolensk disasterhttp://www.thenews.pl/international/artykul147580_poland---russian-errors-and-negligence-contributed-to-smolensk-disaster.html

19.01.2011 00:07

UPDATED - Poland’s government presented key material left out by the Russian report into the Smolensk air disaster today, which it says gives a fuller account of the circumstances which led to the death of President Kaczynski last April and shows many errors by Russian air traffic control.

Poland’s presentation of events included accusations that there was a failure by Russian air traffic control to inform the Polish crew that the plane had veered off the correct approach path, that at one point the Polish crew were left to decide whether to land or not by themselves, and that the Russian airport staff did not have support from their superiors to re-direct the plane to another airport.

Meanwhile, the Russian Interstate Aviation Committee (MAK) said on Tuesday night that it will release transcripts of conversations between air traffic control and the Polish flight crew, something which Russian Transport Minister Igor Levitin said was “unprecedented”.

"I know that the CIS International Aviation Committee (MAK) is ready to publish the conversations of the crew [of the Polish plane]. This is an unprecedented decision. These are materials of the Russian investigation bodies," RIA Novosti reported last night.

Poland's Interior Minister Jerzy Miller presented Poland’s reconstruction of the last moments of the doomed plane taking 96 crew and passengers to a 1940 Katyn memorial ceremony on 10 April last year.

Deputy chairman of the Polish commission investigating the Smolensk catastrophe, Colonel Miroslaw Grochowski told the press conference Tuesday that Russian air

controllers failed to inform the crew of the TU-154 as it flew from Warsaw about dense fog in the area and that the airport was unprepared for the landing of such a plane.

The airport staff, acting under great pressure, made numerous errors, claims Colonel Grochowski.

“The proof of this is the language that they used. Acting under great pressure, air control staff made many mistakes, failing to give sufficient support to the TU-154 upon attempting landing in extremely difficult weather conditions,” he told reporters.

The press conference heard a recording of the conversation between the Russian air traffic controllers, information left out of the Russian report released last week, which has been severely criticsed in Poland for blaming the Polish crew exclusively for the disaster.

 

‘Criminal’

“At some point, the Polish crew was left to fend for itself, which is criminal,” said Colonel Grochowski, referring to when commander at the airport, Colonel Nikolai Krasnokutski says in the recording: “They are taking the decision [to land] on their own. Leave it to them.”

Earlier, Krasnokutski, after being informed by a colleague that a “big Tutka [TU-154] is heading our way” is heard saying: “We need to tell the Poles: there’s no f******g way they’ll land.”

"We need to find a reserve airport,” he adds.

The presentation by Minister Miller also showed that in the final moments before the crash, the crew of the TU 154 was warned that they were approaching the airport at too low an altitude. A Polish aviation expert told the press conference that the command “horizon” was given at 70 and not 100 metres, as it should have been.

“The landing zone commander reports all the time that everything is OK.[…] No information is given to the crew that they are not on the right approach path,” Polish investigator Colonel Robert Benedict told the press conference.

 

Russian version ‘incomplete’

The Polish government reacted to the Russian report released last week into April’s air disaster near Smolensk, which killed all 96 on board, by saying that the 210 page document left out vital communication between Russian air traffic controllers and the Polish crew of the TU-154.

The Russian report put the blame for the crash on “pilot error” but PM Donald Tusk said last week that the document was “incomplete” and had failed to analyze the role of Russian air traffic control in the disaster.

Interior Minister Jerzy Miller said today that the Polish report, when finalised, into the disaster will be similar in the structure to the Russian version so that they can be easily compared.   (pg/kk/ab)

Visas applications can now be started on-linehttp://english.ruvr.ru/2011/01/19/40262229.html

Jan 19, 2011 08:35 Moscow Time

Applications for the issuance of invitations to receive visas to enter Russia by foreigners can now be applied for through the website of the public services. This was reported in the Federal Migration Service.

An application can now be submitted through the "My Account" application on the site of the Federal Migration Service or FMS. An electronic copy of the passport of the person being invited must be included.

Notification by the FMS as to the admission or denial of the application comes on the day of filing.

After this, the applicant must apply in person at the proper location or representative of the service and submit the remaining documents.

According to the FMS, the new procedure significantly eases the process of receiving an invitation and a visa.

Latvian PM against politicizing situation with ex-Moscow mayorhttp://en.rian.ru/world/20110119/162200218.html

A decision of the Latvian Interior Ministry to refuse former Moscow mayor Yury Luzhkov residence permit in Latvia should not be politicized, the prime minister of the Baltic state said.

Luzhkov earlier requested a Latvian residence permit, but on Monday Latvian Interior Minister Linda Murniece placed him on a blacklist of people whose presence in the country is "undesirable."

"I would not like to politicize this issue. The country has relevant services, which currently enquire into the situation and make relevant decisions. I believe, we should leave this issue within their competence," Prime Minister Valdis Dombrovskis told journalists.

Interior Minister Murniece said on Tuesday she made the decision against the former mayor of the Russian capital basing on information from the country's security services. She also said that Luzhkov's goal was not to invest in Latvia or the Latvian economy, but to use Latvia for trips into the Schengen Zone.

Under Latvian immigration laws, foreigners can seek residence permits if they have bought real estate worth between 50,000 to 100,000 lats ($100,000-200,000) or if they have 200,000 lats ($400,000) in a Latvian banking account.

Luzhkov invested 200,000 lat ($400,000) in the subordinated capital of Latvia's Rietumu Banka commercial bank and owns real estate in the country.

Murniece added that Luzhkov's hate speeches concerning Latvia also contributed to imposing an entry ban on him.

The ex-Moscow mayor, who had held the high profile post since 1992, was sacked last year by Russian President Dmitry Medvedev following an extensive smear campaign against him by the country's media. Medvedev cited corruption and negligence of duty as the main reasons for the dismissal.

A number of media sources earlier reported that Luzhkov had also filed a request for a British visa.

RIGA, January 19 (RIA Novosti)

Former CIA agent jailed for spying for Russia gets 8 more years in prison

http://rt.com/news/line/2011-01-19/#id1369

RT News line, January 19

Former CIA officer Harold "Jim" Nicholson has had his prison term extended for eight more years after he admitted using his son to pass more American secrets to Russia. Investigators established that the information was passed during prison visits. According to the Department of Justice, this case is the first one in which a spy has been convicted of new crimes involving a foreign country while already serving a sentence for espionage. Nicholson was arrested in 1996 and admitted to providing Russian

intelligence with US national defense information. In 1997 he was sentenced to 24 years in prison.

Imprisoned Spy Gets 8 More Years For Contacting Russia http://www.rferl.org/content/imprisoned_spy_sentenced_contacting_russia/2280475.html

January 19, 2011 A high-ranking former CIA officer already imprisoned as a Russian spy has been sentenced to an additional eight years behind bars for sending notes to his Russian handlers from prison.

In November, 59-year-old Harold "Jim" Nicholson pleaded guilty to acting as an agent for a foreign government and to money laundering.

Prosecutors said in court documents that Nicholson used his 26-year-old son, Nathaniel, to carry messages to Russian intelligence contacts between 2006 and 2008.

compiled from Reuters reports

First Sukhoi Superjet 100 to be delivered to Armavia in Februaryhttp://en.rian.ru/russia/20110119/162203504.html

The delivery of the first Sukhoi Superjet 100 to Armenian Armavia airlines is scheduled for next month, officials in the Russian Far Eastern Khabarovsk region said on Wednesday.

The SN 95007 will be handed over to Armavia after further tests, regional transport minister Sergei Ivashkin said, adding that 64 test flights had already been conducted.

The Superjet 100 is a family of medium-haul passenger aircraft developed by Sukhoi in cooperation with U.S. and European aviation corporations, including Boeing, Snecma, Thales, Messier Dowty, Liebherr Aerospace and Honeywell.

The tally for orders for the plane has reached 170, with more regional airlines expected to line up as customers. Russian flagship carrier Aeroflot has signed for 40 Superjets.

MOSCOW, January 19 (RIA Novosti)

Russia conducts studies for nuke power plant in Turkeyhttp://www.worldbulletin.net/news_detail.php?id=68737

Russia will launch engineering works for a nuclear power plant planned to be constructed in southern Turkey. Wednesday, 19 January 2011 09:33

Russia will launch engineering works for a nuclear power plant planned to be constructed in southern Turkey.

A Russian delegation visited Buyukeceli hamlet in Gulnar town of the southern province of Mersin on Tuesday.

"We will launch engineering works as soon as possible," Alexandr Sperfin, a member of the 15-member team responsible for the project, told AA correspondent.

Sperfin said they carried out meteorologic, marine and seismic studies in the region, and they would apply for licenses soon.

"We will employ many workers and other staff since this is a giant project," Sperfin said.

Sperfin said the Russian Federation was attaching great importance to the project, and would cooperate with Turkish companies when implementing the project.

"We will not only establish a nuclear power plant, but we will do our best to train people," Sperfin said.

Sperfin said Turkey was Russia's long-term strategic partner, at first 100 people would come to the hamlet.

"This number will rise to 1,000 and then 10,000 in coming years," Sperfin also said.

The delegation later departed from Buyukeceli hamlet.

In May 2010, Turkey and Russia signed a deal for construction of Turkey's first nuclear power plant in Akkuyu, a small town on the Mediterranean coast, which is expected to cost about 20 billion USD. Russian state-owned atomic power company ROSATOM is likely to start building the Akkuyu nuclear power plant in 2013 and the first reactor is planned to generate electricity in 2018.

Russia will build four 1,200 megawatt units on Akkuyu site, and run the power plant for 60 years. Turkish state-owned electricity corporation has guaranteed to buy a fixed amount of the plant's output over the first 15 years starting from initial commercial operation at a reported price of 12.35 US cents per kWh, with the rest of the electricity to

be sold on the open market by the project company.

AA

Hungarian Minister Met Rosatom Chief Executive, Napi Reports http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=avKLOYUUnWXM

By Balazs Penz

Jan. 19 (Bloomberg) -- Hungarian Development Minister Tamas Fellegi met Rosatom Corp. Chief Executive Officer Sergei Kiriyenko during a visit to Moscow this week, Napi Gazdasag reported, citing a statement from the Budapest-based ministry.

Fellegi discussed nuclear-energy and financial cooperation during his trip, which also included a meeting with Russian Deputy Finance Minister Dmitry Pankin, according to the newspaper. The Hungarian minister earlier discussed a planned expansion of the Paks nuclear power plant with Russian Deputy Prime Minister Viktor Zubkov, Napi Gazdasag said.

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

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net.

Last Updated: January 19, 2011 01:56 EST

Fellegi talks cooperation in Moscowhttp://bbjonline.hu/index.php?col=1002&cat=&id=55589

Wednesday 8:27, January 19th, 2011

National Development Minister Tamás Fellegi was on a two-day visit to Moscow to continue negotiations on nuclear energy and financial cooperation, business daily Napi Gazdaság reported. Fellegi met nuclear energy corporation Rosatom’s president Sergei Kiriyenko and Deputy Finance Minister Dmitry Pankin in the Russian capital.

When asked by the paper, the ministry declined to reveal any further details about the negotiations. At the end of 2010, Fellegi’s talks with Russian Deputy Prime Minister Viktor Zubkov led to no result, the paper added. (BBJ)

Bulgaria still hesitant about Belene nuclear power plant http://english.peopledaily.com.cn/90001/90777/90853/7265185.html#

08:51, January 19, 2011

Bulgaria was still hesitating to build the Belene nuclear power plant and to participate in the South Stream pipeline construction, Energy Minister Traicho Traikov said here Tuesday.

Development of major energy infrastructure projects would be one of the government priorities in 2011 but only the European Union (EU)-funded projects would be supported for sure, Traikov told a roundtable discussion in the Bulgarian Parliament. Development of the other projects would depend on their partners, he said.

Bulgaria is participating in three major energy infrastructure projects, namely the Nabucco gas pipeline, South Stream pipeline and Belene NPP. Only the first one is backed by the EU, while Russia plays a key role in the others.

In November last year, Bulgaria and Russia signed two documents -- an agreement on establishing a joint company aimed at building the South Stream pipeline route in Bulgaria, and principles for establishing a future company as owner of the Belene NPP.

The initial agreements between Russia and Bulgaria on Belene NPP and South Stream were signed in 2006 and 2008, respectively, but the projects were frozen after the GERB party came to power here in July 2009.

The roundtable on Tuesday was dedicated to the presentation of a report,"Energy and Good Governance in Bulgaria: Trends and Policy Options", prepared by the local Center for the Study of Democracy.

Belene NPP was based on "misleading market demand forecasts and an ambiguous construction pricing mechanism that excludes a number of hidden costs," the report said.

"Considering the serious difficulties that Bulgaria is facing with the absorption of EU funds and the substantial delays in the implementation of all large infrastructure projects in the sector, implementing a project of this size may seriously threaten the long-term financial stability of the country," the report said.

The report said the South Stream pipeline contributed to the diversification of gas supply routes only, yet its management was non-transparent and its implementation could prove costly due to its underwater segment.

"Recent audits of the implementation of large energy infrastructure projects have exposed some serious governance issues such as lack of sound energy strategy with clear

priorities, poor management of state enterprises, and apparent conflicts of interest at the highest political level, leading to suspicions of corruption," the report said.

Source: Xinhua

Russia puts brakes on further nuclear cutbackshttp://www.google.com/hostednews/afp/article/ALeqM5gd7wKtIOapv9Gl1nqyOkm7Y-yijQ?docId=CNG.cf3f9df69d3ee50f7a0a62316dbb5b65.b1

By Dmitry Zaks (AFP) – 5 hours ago

MOSCOW — The cheer over Russia's approval of a new nuclear disarmament treaty is short-lived as it masks Moscow's reluctance to ensure further cuts, threatening US President Barack Obama's vision of a nuclear-free world.

Russia is going through the final motions of ratifying a new START treaty that reduces old nuclear warhead ceilings by 30 percent and limits each side to 700 deployed long-range missiles and heavy bombers.

The pact will be submitted for a last vote to Russia's lower house of parliament on January 25 and almost certainly be ratified by the upper chamber the following day.

It was backed by the US Senate last month.

But analysts said that Moscow and Washington have little time to rejoice having put in motion the first round of mandated nuclear weapons reductions since the Cold War.

Obama, who pledged to "reset" Russia-US relations, sees START as only a stepping stone to further cutbacks, but a top Russian official made clear last week that the president's insistence for another round of negotiations later this year was not being received well in Moscow.

"I am convinced that before talking about any further steps in the sphere of nuclear disarmament ... it is necessary to fulfill the new START agreement," Foreign Minister Sergei Lavrov told reporters.

Only "then will be it be clear what additional steps should be taken to strengthen global security," he added.

In Russia's view, the round of disarmament which covers short-range tactical missiles dear to Moscow, balances out the West's current dominance in modern conventional forces.

The US Bulletin of the Atomic Scientists estimates that Russia has 2,050 deployed tactical warheads that could be deployed in small nuclear campaigns in its periphery. The United States has just 500.

Lavrov said Russia's commitment under the new START treaty will not be "fulfilled" for another seven years, and some analysts interpreted the comments as a flat-out rejection of Obama's latest overture.

"It seems Lavrov meant that these talks will not start for another seven years," said independent military commentator Alexander Golts.

"It is also important to note that Lavrov said these talks should be tied to space and conventional weapons," said Golts.

"This is basically a polite way of saying that we are not ready to talk about it."

The Russian foreign minister Lavrov spelled out a series of amendments that appear inherently unacceptable to the United States.

They include the prohibition of military space programmes that the Pentagon is currently studying and a requirement for all talks to include conventional warheads that the West is developing much faster than Russia.

Lavrov even suggested that the next round of talks should for the first time involve other countries -- presumably China and other emerging nuclear powers that may press their own demands on Washington.

"Most Russian experts see nuclear weapons as an equalizer," said Moscow's Centre for Disarmament Director Anatoly Dyakov.

"They believe that the removal of nuclear weapons must be accompanied by a full transformation of international relations that ensures that no country can suddenly decide to use force."

Military analysts estimate that it will take Russia another decade to develop a conventional weapons programme capable of re-establishing some semblance of parity with the West.

But they warned that it is highly unlikely that Russia will be able to delay the next round of nuclear negotiations for as long as suggested by Lavrov.

"We are going to have to start these whether we like it or not," said Institute for Strategic Assessment head Alexander Konovalov.

"The Americans will not stand for this kind of disparity."

Reactor shut-down at Kola NPPhttp://www.barentsobserver.com/reactor-shut-down-at-kola-npp.4873522-16176.html

2011-01-18 Short circuit in a cable caused closure of reactor No. 4 at Kola nuclear power plant.

The incident happened Monday evening at 21.07 local time.

According to a short information note posted by the public information centre at Kola nuclear power plant (Kola NPP), the closure of the reactor was conducted in accordance with the requirements for the operation of the nuclear power plant.

Reactor No. 4 is the newest of the four pressured water reactors (VVER-440 type). It was commissioned in 1984.

The three other reactors are still in operation. Kola NPP says the radiation level at and around Kola nuclear power plant does not exceed the natural background level.

In September last year, reactor No. 3 at Kola nuclear power plant was automatically shut down on after a malfunction in one of the elements in the system responsible for pressure control in the first compartment.

On January 15 last year, a five meter high oil voltage transformer exploded at the Kola Nuclear Power Plant during a hurricane leaving northern parts of the Kola Peninsula without power.

Text: Thomas Nilsen

'We must keep smallpox stocks' US and Russia tells World Health Organisation http://www.telegraph.co.uk/health/healthnews/8267370/We-must-keep-smallpox-stocks-US-and-Russia-tells-World-Health-Organisation.html

Washington and Moscow are joining forces to prevent an international effort to destroy their remaining stocks of smallpox, arguing that the supplies could be needed develop a vaccine in the event of a bio-terror attack.

By Alex Spillius, Washington 9:00PM GMT 18 Jan 2011

At a meeting beginning today, the World Health Organisation will propose eradicating the American and Russian samples, which are kept in high-security facilities in Atlanta and Novosibirsk, fearing that they could be stolen or unleashed in an accident.

"Our position is that we need to have the virus collections maintained for the foreseeable future," a US official said.

Once the most deadly virus in the world, smallpox killed about a third of those who contracted it and wiped out more than half the indigenous populations of North and South America when first introduced by African slaves.

The WHO declared the virus eradicated in 1980 after the most successful vaccination scheme the world has seen.

It was agreed in 1996 that remaining smallpox stocks should be destroyed, but so far the arguments presented by the US and Russia have prevailed.

Developing countries are among those however pushing the issue again, with some arguing that the two powers are using the same bogus arguments as they use to justify their continued possession of nuclear weapons.

They have been supported by some Western scientists, who have warned that other nations might be tempted to obtain the virus if Washington and Moscow refuse to give up theirs.

The US Centre for Communicable Diseases allows only ten scientist access to the 451 samples stored in liquid nitrogen. The Russians have 120 samples.

American officials fear that a lethal strain of smallpox could be obtained or synthesised and used in a weapon, although terrorists currently do not have the specialists or the large laboratories needed to synthesise the virus.

"At the moment it requires a pretty sophisticated scientific team," said Craig Venter, who was one of the first geneticists to map the human genome.

Khodorkovsky Verdict to Stoke Investor Concerns, Dvorkovich Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aPUAVpf8TB1s

By Patrick Henry

Jan. 19 (Bloomberg) -- A second conviction against jailed former Yukos Oil Co. billionaire Mikhail Khodorkovsky will raise “serious questions” among foreign investors and raise their assessment of the risks of doing business in Russia, said Arkady Dvorkovich, President Dmitry Medvedev’s top economic adviser.

The Russian delegation to the World Economic Forum in Davos, Switzerland, next week will face questions about last month’s conviction, which may keep Khodorkovsky in jail

until 2017, Dvorkovich said in an online interview with the gazeta.ru Internet news service.

To contact the editor responsible for this story: Patrick Henry at phenry8@bloomberg.net

Last Updated: January 19, 2011 02:49 EST

Released Russian cargo ship in China to head to S.Korea's Busanhttp://en.rian.ru/world/20110119/162201156.html

A Russian cargo ship impounded in China has been released and will head to the South Korean port of Busan on Wednesday, an official with the Russian sailor's trade union said.

The Maksim Ammosov ship, owned by Russia's Arctic Shipping Company, was impounded at the port of Yantai on December 23 for outstanding debts totaling $130,000. There are 17 Russian sailors, including two women, on board the vessel.

"I spoke with the sailors and they said that the vessel has been released and will head to the South Korean port of Busan late on Wednesday afternoon. There [in Busan] the ship will be loaded with food and the sailors were promised to be partly covered in their arrears of wage," said Nikolai Sukhanov, the head of the Far Eastern branch of the trade union.

He added that it would take the ship about three days to get to the port of Busan and from there it would continue to Vladivostok, in Russia's Far East, where it is expected to be in early February.

The sailors earlier refused to vacate the ship in China, until the owner paid them the arrears in salary totaling some $40,000.

VLADIVOSTOK, January 19 (RIA Novosti)

Russia's North Caucasus to see investment of $13 billion in 2011http://en.rian.ru/russia/20110119/162202184.html

09:02 19/01/2011

PYATIGORSK, January 19 (RIA Novosti) - Some 37 major new investment projects worth 400 billion rubles ($13.4 billion) will be implemented in Russia's volatile North Caucasus Federal District in 2001, Presidential Envoy to the region Alexander Khloponin said on Wednesday.

"This is a sign that the state has established certain conditions to attract Russian investors [to the region] and I believe we will move forward," Khloponin said in an interview with the Izvestia daily.

"People believe today that we can work to create small- and medium-sized businesses," Khloponin added.

High unemployment coupled with low living standards are thought to be the main factors driving residents of the North Caucasus to join militant groups and the Russian government has cited investment in the region as a key solution to the regular terrorist attacks.

Russian President Dmitry Medvedev announced in January 2010 the establishment of the North Caucasus Federal District and named Khloponin as deputy prime minister and presidential envoy.

The onetime Krasnoyarsk governor and former business executive, who has been charged with improving the economic and social situation in the region, has been described as a "crisis manager" for the district.

Muslim channel to appear in Russiahttp://english.ruvr.ru/2011/01/19/40262338.html

Jan 19, 2011 08:39 Moscow Time

There will soon appear an Islamic television channel in Russia. According to the chairman of the Council of muftis of Russia, Ravil Gainutdin, its launch will be held in late February.

The network is to be addressed primarily to youth, in order to cultivate a spirit of tolerance towards representatives of other faiths.

Interethnic relations are in the public spotlight after the riots at the Manezh Square in Moscow on December 11.

Russia To Launch Muslim TV Channel http://www.rferl.org/content/russia_launch_muslim_tv/2280466.html

January 19, 2011 Russia will soon launch a Muslim television channel in what it says is the hope it will foster tolerance.

Russian reports say the satellite channel will go on the air in February or March across Russia, home to some 20 million Muslims.

Analysts say Russia has witnessed a rise in neo-nationalist movements.

In December, Moscow saw the worst nationalist riots in its post-Soviet history, with police unable to stop some 7,000 youths who gathered near the Kremlin from beating people of non-Slavic appearance.

compiled from Reuters reports

93 militants killed in Chechnya in 2010., Including the three leaders of bandit groups. http://www.rbc.ru/rbcfreenews/20110119111238.shtml

GOOGLE TRANSLATION

RBC 19.01.2011, 11:12:38 Grozny in Chechnya in 2010. with armed resistance destroyed 93 members of illegal armed groups, including three leader of bandit groups, as well as the Arab mercenary, engaged in training terrorists. Said the deputy head of the Ministry of Internal Affairs of the Republic Muslim Isayev, the press service department. According to M. Isaev, as a result of search operations and special events in 2010. identified and arrested 202 people involved in the activities of gangs. Have surrendered 40 members of bandit groups and their supporters. "Last year, police have revealed 304 crimes related to the organization or participation in illegal armed groups. In 2010. Have been found and eliminated dozens of databases of illegal armed groups and weapons caches. Of the illicit seizure of 279 firearms, more than 500 kilograms of explosives Substances ", - said M. Isaev.

18 January 2011, 15:52

Orthodox church to be built in Chechnyahttp://www.interfax-religion.com/?act=news&div=8107

Grozny, January 18, Interfax - A new Orthodox church, the Cathedral of the Nativity, will be built in the village of Naurskaya in Chechnya by the end of 2011, head of Chechnya Ramzan Kadyrov has said.

"The construction is to begin this week in symbolic commemoration of the 75th anniversary of the Naura District," he told reporters.

"The construction will be funded by the Russian Copper Company owner Igor Altushkin," he also said.

Naura District governor Vladimir Kashlyunov in turn said that the new church would be built where an old church stood before it was demolished in 1937.

"We have a priest who will conduct services, Father Amvrosy of the Church of Joy of All Who Sorrow," Kashlyunov said.

Chechnya's Naura District has a population of about 60,000, half of whom are Orthodox believers.

Grozny football team gets new coachhttp://english.ruvr.ru/2011/01/19/40262636.html

Jan 19, 2011 08:57 Moscow Time

Grozny's soccer team Terek will be coached by Dutchman Ruud Gullit, according to the head of Chechnya, Ramzan Kadyrov. He expressed hope that the new coach will be able to meet the goals that the club has set for itself this year.

According to Kadyrov, the team intends to fight for the right to play in the Euroleague. Ruud Gullit has won the European Super Cup and the "Golden Ball" and was voted the best player in the world several times.

Ex-Newcastle and Chelsea manager Ruud Gullit joins Terek Groznyhttp://www.guardian.co.uk/football/2011/jan/19/ruud-gullit-terek-grozny

• Club say Dutchman has signed 18-month contract• Chechnya-based club were 12th in Russian league

Associated Press

guardian.co.uk, Wednesday 19 January 2011 00.11 GMT

The former Chelsea and Newcastle manager Ruud Gullit has joined Russia's Terek Grozny as coach on an 18-month contract, the Chechnya-based club said on its website yesterday. Gullit, 48, joins the club three years after being fired by the Los Angeles Galaxy. He has also managed Feyenoord.

Terek finished last season 12th in the Russian league. The club president, Ramzan Kadyrov, has set Gullit the target of a top-eight finish next season.

Gullit is the third high-profile Dutch coach to come to Russia in recent years. The Russian national team coach is Dick Advocaat, who coached Zenit St Petersburg from 2006 to 2009, winning a league title and the Uefa Cup. Guus Hiddink was Russia's national coach from 2006 to 2010.

Terek are based in the province of Chechnya, in the south of the country. Kadyrov is also the president of the province.

Suleyman Kerimov is the new owner of FC "Anzhi" Makhachkala http://www.riadagestan.com/news/2011/01/19/5916/19.01.2011 , 09:34

Moscow, January 19, 2011. On January, 17, the meeting of the President of the Republic of Dagestan Magomedsalam Magomedov with the member of the Russian Federal Council Suleyman Kerimov took place in Moscow. The Chairman of the People’s Assembly of Dagestan and the president of FC "Anzhi" Magomed-Sultan Magomedov was at the meeting.

It was decided to sell the football club "Anzhi" Makhachkala to the senator Suleyman Kerimov.

Vigils to mark murder anniversaryhttp://themoscownews.com/local/20110119/188344613.html?referfrommn

by Alina Lobzina at 19/01/2011 11:20

Wednesday marks the second anniversary of the murder of human rights lawyer Stanislav Markelov and journalists Anastasia Baburova.

Memorial vigils and demonstrations are scheduled in Moscow and other cities as attention shifts towards the trial of the suspected killers on Jan. 27

Despite initially banning any events to commemorate the anniversary, the authorities in the capital have given the go-ahead to two gatherings.

From 5-6 pm at the site of the double murder on Ul. Prechistenka activists will lay flowers.

Then there will be a march along Tverskoy Bulvar starting at 7:30 pm, culminating in a rally from 8-10 pm in Novopushkinsky Skver.

 

Trial approaches

On Jan. 27 the jury set to hear the case against Nikita Tikhonov and Evgeniya Khasis is due to be sworn in.

The pair are members of the nationalist group “Russky Obraz”. Tikhonov faces charges of illegal arms trafficking and possession in addition to the murder rap, which Khasis charged with assisting him with.

And audio evidence is expected to play a key role in court proceedings, Kommersant reported.

The prosecution claims it has wiretaps from the couple’s apartment which demonstrates their involvement in the killings.

The defence, meanwhile, admits that the recordings are genuine but insists that they prove nothing.

All around Russia

There are similar meetings planned in other cities, including St. Petersburg, Perm, Saratov, Tyumen, Ufa and Yaroslavl.

And in Baburova’s native Ukraine vigils are scheduled in Kiev and her home town of Sevastopol.

Further afield, rallies are expected in Almary, Kazakhstan, and Poznan, Poland.

Russian Newspaper Editor Gets Early Release http://www.rferl.org/content/russian_newspaper_editor_early_release/2280514.html

January 19, 2011 MOSCOW -- A Russian journalist jailed three years ago for extortion, fraud, and defamatory language has been released from a prison in Bashkortostan, RFE/RL's Tatar-Bashkir Service reports.

Aigul Makhmutova, 26, had served three years and one month of her 5 1/2-year sentence.

Originally from the town of Ishimbai in the Russian republic of Bashkortostan, Makhmutova was editor in chief of the newspaper "Sudba Kuzminok" (Kuzminki's Fate) in Kuzminki, near Moscow, when police filed charges against her after her newspaper published a series of articles criticizing local authorities for demolishing playgrounds in

order to build garages.

The authorities halted construction after Makhmutova's articles were published. Many locals in Kuzminki and human rights activists regard the case against Makhmutova as retaliation by Kuzminki authorities for the articles.

Makhmutova was serving her jail term in a labor camp for women in the town of Kalchugino, in Vladimir Oblast, about 200 kilometers east of Moscow.

Makhmutova told RFE/RL after arriving in Moscow from Kalchugino that the most difficult part of her imprisonment was the isolation.

She said she plans to continue to work as a journalist and to live in Moscow.

Makhmutova's lawyer, Yury Zak, told RFE/RL that the parole board's decision to allow the early release of his client has nothing to do with the dismissal of Yury Luzhkov as Moscow mayor last year.

Moscow government to create regional security departmenthttp://news.oneindia.in/2011/01/19/moscowgovernment-to-create-regional-securitydepartment-aid0126.html

Wednesday, January 19, 2011, 13:00 [IST]Moscow, Jan 19 (Itar-Tass) The Moscow government will create a regional security department, Moscow Mayor Sergei Sobyanin said at a city government meeting.

"A new executive body will have the functions, which earlier performed the security department in the Moscow government," he said yesterday.

"This is not just a new name, but the need for thequalitative improvement of the law enforcement situation andfor creating an efficient system of cooperation between theMoscow government and federal law enforcement agencies," themayor noted.

"President Dmitry Medvedev set this task in his decree onvesting the regional chiefs with additional powers in securityand the creation of coordinating public security councils,"Sobyanin pointed out.

The mayor noted that the department is to combat threatscoming from organised crime, drug trafficking, terrorism,extremism, corruption, xenophobia and illegal migration.

"In this respect the new department will arrange the workof the city coordination council and the fulfilment of theaction plans for 2011," Sobyanin added.

On January 19, the traffic police will hold an enlargedboard for security in order to

consider the creation of thisdepartment.

The mayor did not specify who will head this new body.

(Itar-Tass)

Official's car runs over traffic cop in Moscowhttp://en.rian.ru/russia/20110119/162202670.html

A traffic cop was seriously injured when he was hit by the car of a regional official in downtown Moscow, it emerged on Wednesday.

"The driver of an official from the Murmansk regional government pulled into the emergency lane and rammed into a traffic policeman on Novy Arbat Street at 11.30 a.m. [14.30 GMT] on Tuesday," a police source told RIA Novosti.

"The policeman suffered several injuries and was hospitalized," he said.

An investigation is underway.

A number high-profile road accidents involving VIP vehicles has caused concern in recent years among the residents of the Russian capital.

Two women were killed last February when their car collided head-on with a chauffeured Mercedes belonging to Anatoly Barkov, the vice-president of the Russian oil giant, LUKoil.

Barkov was not charged for the accident despite evidence that his car pulled into the oncoming lane.

His car, like hundreds of others in Moscow, had a flashing blue light, or migalka, used by businessmen and state officials to bypass traffic rules.

Public anger over the use of migalki has spawned an ingenious protest movement, with drivers attaching blue buckets to their cars in mimicry of the official lights. A series of blue bucket demonstrations in Moscow have been blocked by police.

MOSCOW, January 19 (RIA Novosti)

PRESS DIGEST - Russia - Jan 19http://uk.reuters.com/article/idUKLDE70I02120110119

8:12am GMT

MOSCOW, Jan 19 (Reuters) - The following are some of the leading stories in Russia's newspapers on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Russian shareholders of TNK-BP seem to be unhappy with the deal the company reached with Rosneft (ROSN.MM: Quote, Profile, Research)

VEDOMOSTI

www.vedomosti.ru

- Russia has banned sales of pieces of land neighbouring its boarder line to non-residents..

- Russia's police have launched probes into corruption allegations against Russia's representative in the European Bank for Reconstruction and Development (EBRD), Yelena Kotova, who was dismissed from her post for the violation of the bank code of conduct.

ROSSIISKAYA GAZETA

www.rg.ru

- Russia's Communications Minister Igor Shchegolev is urging the development of a worldwide mechanism to prevent spreading of illegal information and child pornography through the Internet.

- Russia is most likely to choose on Feb. 7 a photo of Father Frost as a symbol for the winter Olympic Games to be held in Sochi in 2014, the daily says.

IZVESTIA

www.izvestia.ru

- A Presidential envoy to North Caucasus Alexander Khloponin is saying in his interview that situation in the region remains tense because of accumulation of big amount of weapons and operations of terrorists' groups.

- Hundreds of pregnant Russian women held a rally in Moscow on Tuesday to protest against the cuts of state subsidies to mothers, which have come in force in January.

- Russian feminists have asked the head of Russian Orthodox Church Patriarch Kirill to denounce "discriminative and offending" statements made by a senior church official who had earlier called on Russian women to wear more modest clothes.

NEZAVISIMAYA GAZETA

www.ng.ru

- Russia's authorities could fail to control inflation in 2011, which may reach 13 percent, according to some pessimistic estimations.

Russian Press at a Glance, Wednesday, January 19, 2011http://en.rian.ru/papers/20110119/162201986.html

08:21 19/01/2011© RIA Novosti. Rybchinskiy

POLITICS

Russian President Dmitry Medvedev reiterated his support for the creation of an independent Palestinian state. The Russian president is on his first tour of the Middle East that does not include Israel

(Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

A Polish commission investigating the Smolensk air crash said Russian air traffic controllers were under pressure, made a number of errors and failed to warn the Polish pilots that they were off course

(Kommersant, Nezavisimaya Gazeta)

Latvian Interior Minister Linda Murniece, who placed former Moscow mayor Yury Luzhkov on a blacklist of people whose presence in the country is "undesirable," said she had made the decision based on information from the country's security services

(The Moscow Times, Kommersant)

In his first official trip abroad, new Belarusian Prime Minister Mikhail Myasnikovich will visit Moscow on Thursday and meet with his Russian counterpart Vladimir Putin

(Nezavisimaya Gazeta)

BUSINESS & ECONOMY

The Economic Development Ministry said that Russia may complete talks on joining the World Trade Organization as early as April, with just a couple of issues remaining unsolved

(The Moscow Times, Rossiiskaya Gazeta)

Moscow's ubiquitous payment terminals are set to sprout in the United States this year as one of their Russian operators, Qiwi, announced an alliance with Japan's business empire Mitsui to enter new markets

(The Moscow Times, Vedomosti)

Microsoft Russia demonstrated confidence in the ruble on Tuesday when it announced that it will begin conducting business in the currency with local partners starting March 1

(The Moscow Times)

WORLD

Poland imposed an entry ban on Belarusian President Alexander Lukashenko and several state officials following a post-election crackdown on the opposition in Minsk

(Kommersant)

Ukraine's embattled opposition leader Yulia Tymoshenko appealed to prosecutors to drop charges against her

(Nezavisimaya Gazeta)

EDUCATION

The draft of the new Russian education reform, released to a blast of patriotic fanfare last month, is stirring up sharp criticism from opponents, who fear that the new program will be used to brainwash them into becoming docile servants of the authorities

(The Moscow Times)

SOCIETY

Optimism among consumers of seven developing countries is second to last in Russia, according to the Credit Suisse Research Institute, with only the rich expecting income growth

(The Moscow Times, Vedomosti)

SPORTS

Russian tennis star and former World No. 1 Dinara Safina suffered her shortest ever Grand Slam performance when she was knocked out in the first round of the 2011 Australian Open by another former World No. 1, Kim Klijsters of Belgium

(Kommersant)

Epiphany in Russia holiday of people’s exultation, valiant bravado

http://www.itar-tass.com/eng/level2.html?NewsID=15868152

19.01.2011, 08.50

MOSCOW, January 19 (Itar-Tass) - Patriarch of Moscow and All Russia Kirill will lead a great water blessing ceremony on the occasion of the Epiphany at the Epiphany Cathedral here on Wednesday. The Epiphany holiday is also called the Holy Theophany of Our Lord Jesus Christ, because on this day the God appeared in three hypostases – God the Father, God the Son and God the Holy Spirit. The great water blessing ceremony is officiated twice a year on the Eve of Epiphany and on the Epiphany holiday.

Traditional Russian plunges in Epiphany ice holes are the manifestation of valiant bravado and festive exultation. The cross-bearing procession with church banners gives the symbolic sense and the festive nature of the rite from the church to the baptistery place. Patriarch Kirill supported bold Epiphany plungers on the Eve of Epiphany, but noted that they should take such submersions with reverence. One should remember plunging in the baptistery that “it is neither the entertainment nor some folk traditions, but the participation in the sacrament.” The patriarch recommended people to make three signs of the cross and pray about themselves and their near and dear during the submersion, “so that the God forgave the sins and built up on the worthy way of life leading to the Kingdom of God.”

This year about 70 baptisteries with changing rooms and comfortable stairs were provided in Moscow with the assistance of authorities. Rescuers and medics will be on duty near them. A wooden baptistery was placed at Moskva Hotel near the Red Square. Meanwhile, before plunging in the chilly water the clergymen recommend people to consult the doctor. People with cardiovascular diseases and the diseases of the peripheral nervous system are forbidden to do such extreme exercises. They recommend plunging not more than for 10-15 seconds.

Emergency workers expect about 600,000 Epiphany plungers in all Russia this year. The rescuers were on duty overnight to Wednesday. Emergency inspectors used an air-

cushion vessel for patrolling on the Siberian rivers covered with the ice more than half a meter thick.

The weathermen forecast minus 16 degrees Celsius in the Moscow Region overnight to January 19. Real Epiphany frosts set in eastern Russian regions.

To fight alcoholism, Russian authorities target beer's status

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/18/AR2011011806409.html

By Kathy LallyWashington Post Foreign Service Wednesday, January 19, 2011

MOSCOW - Russia's Duma deputies might find it easier to turn lead into gold than make beer into alcohol.

Creating gold requires only the magic of alchemy, but the fate of a proposal to legally define beer as an alcoholic drink will depend on the even more challenging art of politics.

Russian law treats beer as a food - it could just as well be a package of pasta - and anyone who makes and sells it only has to prove that conditions are sanitary. This lack of regulation and attendant attitude, critics say, has contributed to young people starting to drink as early as age 13, paving the way to the nation's unbridled alcoholism.

Even so, approval looked far from certain when the government last week asked the Duma to pass a law defining beer as alcohol, so it could be banned at children's events and limited at the ubiquitous street kiosks where it's now practically interchangeable with soda.

Duma deputies are up for election in December, deputy Anton Belyakov pointed out, and too many of them depend on the well-off beer industry for financing.

"It's billions and billions of dollars a year," said Belyakov, a member of the minority Fair Russia party. "I want to repeat: A significant part of that financial flow goes into the building where I work."

The proposed law is relatively mild - beer could still be made without a license - and it was cast as furthering a goal set by Prime Minister Vladimir Putin and President Dmitry Medvedev to cut the nation's alcohol consumption in half by 2020.

"There are a lot of public statements about anti-alcohol measures," said Belyakov, who said he has unsuccessfully introduced about 15 such measures over the last two years, "but nothing really happens to decrease alcohol consumption."

Russian officials frequently offer horrifying statistics about the damage from alcohol: The number of children aged 10 to 14 who drink rose 15.4 percent in 2008, to 10.8 million; the population of 140 million has 2 million alcoholics; more than 23,000 people die of alcohol poisoning annually; and 500,000 die from crimes, accidents and illnesses related to alcohol.

"Frankly speaking," Medvedev has said, "alcoholism in our country has become a national tragedy."

Beer, which is usually less than 5 percent alcohol, does not rank in the public imagination with "real" alcohol, such as vodka, at 40 percent. But Belyakov said marketing beer toward young people starts a habit that is deeply ingrained by the time they turn 30 or so and begin consuming stronger drinks.

Vadim Drobiz, director of the Research Center for Federal and Regional Alcohol Markets, said that as the beer market was developing here in the 1990s, officials hoped it would prove a healthier alternative to hard liquor.

But instead, without dropping the ubiquitous vodka toast, Russians also developed a thirst for beer that required considerable slaking, contributing to a prodigious consumption of alcohol. The World Health Organization calculated that in 2005, Russians over 15 were drinking the equivalent of 15.7 liters of alcohol per capita per year. The U.S. figure for that year was 8.4 liters, according to the National Institutes of Health.

Those figures are determined by the amount of alcohol in each type of beverage: drinking 2.5 liters of vodka, for example, would amount to 1 liter of alcohol consumed.

"If you convert this into bottles of vodka," Medvedev said at a 2009 forum, "it torments the soul."

Converting it into beer, Drobiz said that Russians consume about 81 liters per capita per year, and that beer consumption in 2007 was 51/2 times greater than in 1995.

Members of the Union of Russian beer producers, who say they do not market to teenagers, say beer should not be blamed for alcoholism when it makes up only a quarter of the alcohol being consumed. They suggest that officials fix social problems first.

The drinking age is 18, but Pavel Shapkin, head of the Center for Development of a National Alcohol Policy, says even that is not strictly enforced.

"Of course beer is sold to minors," he said. "Nothing is monitored, nothing is controlled. Beer is very accessible. So if we are talking about the government trying to decrease consumption at least twice by 2020, how can you do this without restricting the consumption of beer?"

Whether the Duma will find a way to turn beer into alcohol remains unclear, but everyone agrees that lobbyists will find much to occupy them.

Muscovites live like gods and get best things in Russia?http://english.pravda.ru/society/stories/19-01-2011/116566-muscovites-0/

19.01.2011  

All of Russia outside the immediate suburbs of Moscow believes the myth of a separate state within Russia, called Moscow. Many believe that Moscow has better housing, better shops, and generally better living conditions. But is this really the case? Who are Muscovites and do they really live lavishly at the expense of others?

During a trip to Voronezh region I had a chance to socialize with the locals who tried to persuade me that the best products from their district are sent to Moscow stores, while they have to be content with what is left and even drink powder milk. I did taste the milk and, unlike in Moscow, it was natural. The locals did not believe my statement that in Moscow you can find milk with a shelf life of six months, and, apparently thinking that I spy for the capital, returned to their homes.

Statistics show that Muscovites are not liked in the province because they are believed to be entitled. First, to comfort the residents of the periphery it should be stated that Moscow and its region are capable of feeding 12 million of its people with products manufactured in Moscow region and imported from abroad.

Second, it would be nice to open people's eyes to the far from sweet life of over 70% of Muscovites who do not live like gods, but ordinary people who sometimes even have to borrow money to make the ends meet. According to official government data, the average salary in Moscow in 2011 will amount to 43 thousand rubles ($1435). The minimum wage is 10.4 thousand rubles ($346). Of course, $1,400 for the residents of the province is a fantastic sum of money which can be sufficient for a carefree life for two or even three months provided they have their own farms. Yet, many people forget about the magic ratio of salaries and costs in different cities of Russia. Let's try to figure out whether the average Muscovite without special needs will be able to live on this money in Moscow for a month.

If you are an undemanding resident of the Russian capital without bad habits (cigarettes and alcohol), according to a survey you will be able to feed yourself with 12 thousand rubles a month ($400). Believe me, this list will not include red caviar, but only products of daily consumption: chicken ($1.5 lb.), frozen vegetables ($1.3 lb.), eggs (from $1.30 per dozen), bread ($0.60 per loaf), dairy products (yogurt and milk approximately $1.30

per liter, cottage cheese - approximately $2.7 per lb., grains (from $0.50 per lb.), fruits (apples - approximately $1.8 per lb.), sunflower oil (from $1.5 per liter), salt (from $0.70 per pack), sugar ($0.50 per lb.) and tea (approximately $1.3 for 20 bags).

Household goods - toilet paper, toothpaste, laundry detergent, household chemicals, soap and shampoo - will be another $30.

It is also worth considering that a working person has a habit of snacking at lunchtime, so add to that the average cost of lunch in a cafeteria - $5 per day, amounting to $100 per month.

If you are not lucky and your job is not in a neighboring yard, you should pay for your commute. A single pass for 4 types of transportation with no more than 70 subway trips will cost you $80.

Happy owners of an apartment in Moscow will also have to pay approximately $130 of communal fees. Frugal use of electricity will cost you approximately $17 a month. A basic landline plan that includes 400 minutes of telephone calls per month will cost you $5 plus the use of the phone line at $6. This means that it will cost you $161 to live in your own apartment.

The amount that a Muscovite has to spend each month is over $670. It is worth noting that the aforementioned person does not drink or smoke, does not suffer from not having a mobile phone and the Internet, does not buy clothes and gifts, uses only urban public transport and does not to leave the capital (because prices for the trips outside Moscow vary greatly). The said Muscovite eats only at home and has a rather monotonous diet. Summing up all these costs it will be obvious that the amount will greatly exceed the one provided in the beginning of the discussion.

Statistics will help us to debunk the myth of the overfed Muscovites. A survey was conducted among the capital's residents last year where the residents were asked about their monthly salaries. Out of 3,000 respondents, 53% earn less than $500 a month, 27% earn $500 to $1000, 12% earn between $1,000 and $2,000, and only 9% make over $2,000 per month.

Even though it sounds improbable, but there are people in Moscow who work for peanuts. For example a researcher in the Moscow art museum makes approximately $400 a month, while a college teacher of botany makes approximately $300. This means that without exaggeration, the average salary in Moscow is $800-1,000. This is not a lot of money by Moscow standards, especially considering the fact that life in Moscow is very exciting and temptations are ample.

In general, the capital is not as charming and attractive as it seems at first glance, while its industry can unfortunately easily absorb any amount of money, no matter how much you earn.

Daria KurganskayaBigness

National Economic Trends

Russia Extends Export Ban Into Mid-2011 http://www.blackseagrain.net/about-ukragroconsult/news-bsg/russia-extends-export-ban-into-mid-2011

Russia has decided to expand its grain export ban into July 2011, according to a report by the BBC.

The ban began last August and is a direct effect of the severe drought and heat the country experienced during 2010.

The drought devastated Russia’s crop, severing wheat yields by a third. This caused wheat prices to skyrocket and double in some countries.

Melikyan opposes CBR's tightening http://www.bne.eu/dispatch_text14009

VTB CapitalJanuary 19, 2011

Yesterday, First CBR Deputy Chairman Gennady Melikyan said in an interview that additional tightening of interest rates by the CBR could harm the growth outlook and thus it is appropriate to take a cautious approach in this regard finding a balance between growth and inflation risks. He said that CBR board had been intensely mulling over the key rates dynamic. He also voiced the opinion that he would rather refrain from hiking rates at the moment. Melikyan's dovish comment indicated that the CBR would likely take a very cautious approach when implementing its interest rates tightening in the near future. Nevertheless, we expect that key interest rates will likely hiked 25bp at the upcoming CBR's BoD meeting at the end of January.

WTO Negotiator Sets Sights on April http://www.themoscowtimes.com/business/article/wto-sights-set-on-april/429186.html

18 January 2011By Irina Filatova

Russia may complete talks on joining the World Trade Organization as early as in April, with just a couple of issues remaining unsolved, the Economic Development Ministry said Tuesday.

“It's technically possible to complete the talks in April,” said Maxim Medvedkov, head of the ministry's Trade Negotiation Department, which would allow accession by early 2012.

Medvedkov, who also chairs Russia's delegation on joining the WTO, said a new round of talks would start in Geneva next week, adding that the country is now in its 18th year of attempts to join the organization.

“It's quite possible that it will be the last year in this process. We hope so,” he told a news conference.

Russia has reached agreement on 99 percent of issues, including passing amendments to legislation in order for it to comply with the norms of the organization, he said.

Medvedkov is not concerned about Georgia's demand to allow its customs officials to be posted on internationally recognized borders with Abkhazia and South Ossetia.

"We hope that this problem won't stop our accession," he said, adding that one country can't block accession of another country.

Georgia is already a member of the trade bloc, and according to WTO rules, any of its 153 members may veto Russia's accession.

Moscow submitted its application to join the WTO in June 1993, nearly 18 years ago, and despite promises from the United States to speed up its accession, the country remains the largest economy outside the bloc.

The issues to be discussed in Geneva include the size of agricultural subsidies after joining the WTO, and meat import quotas.

The government plans to double agricultural subsidies by 2012, providing a total of $9 billion annually to support farmers, but may subsequently reduce that figure to $4 billion to $4.5 billion over the next five to seven years.

Concerning meat import quotas, Medvedkov said a compromise should be found “to create a balance between the interests of producers and consumers.” He also said Russia was in talks with 10 to 12 countries on the size of the quotas.

President Dmitry Medvedev signed a new food security doctrine last year, which called for 85 percent of all meat consumed in the country to be produced domestically by 2020.

Medvedkov also said the verdict recently handed down to former Yukos head Mikhail Khodorkovsky was unlikely to affect negotiations on the WTO bid because the talks in Geneva would be related to “purely trade issues” and the Khodorkovsky issue “wouldn't be raised for sure.”

The WTO “is a trading platform” and it “shouldn't be used for solving other problems,” he said.

Khodorkovsky’s latest sentence, which is likely to keep him imprisoned until 2017, may negatively affect Russia's image and complicate the country's bid to join the bloc, an unidentified official at the administration of U.S. President Barack Obama said last month, Reuters reported.

Meanwhile, Russia's accession to the WTO is anticipated by a number of countries.

Germany's Finance Minister Wolfgang Schaeuble told Rossiiskaya Gazeta on Tuesday that Russia should become a WTO member “in order to equalize the rights and duties of all market players during export-import operations.”

Rossiskaya Gazeta: Euro-aidhttp://rt.com/politics/press/rossijskaya-gazeta/eurozone-bonds-russia-economy/en/print/

Published: 19 January, 2011, 04:09Edited: 19 January, 2011, 05:03

Russia is ready to finance the EU rescue fund By Maria Zhebit

Eurozone bonds could be of interest to Russia, Finance Minister Anleskey Kudrin told journalists yesterday. Meanwhile, Russia currently does not intend to again purchase Spanish securities – last year, Spain was removed from the list of countries in which Russia can invest state funds.  

The Finance Ministry has no immediate plans to return Spain to the list of countries in the securities of which the Reserve Fund and the National Wealth Fund can invest. Earlier, Spain and Iceland were removed from the list as countries with an unstable economic situation.

“For now, we cannot participate in such allocations,” explained the minister. “This is a question of preservation of assets, their security, and giving an account to our citizens.”

At the same time, Russia may be interested in buying bonds which the European Financial Stability Facility plans to issue.

“At the present time, we don’t know the conditions of issue of such instruments,” explained Kudrin, “but they could be quite attractive.”

These bonds, according to Aleksandr Osin, chief economist with Finam Management, will be freed from risks associated with the weak finances of certain countries “on the periphery” of the EU.

“Their security is analogous to the security of, say, the German or American state bonds,” said the expert. Earlier, China and Japan already expressed their intention to purchase EFSF bonds. In doing so, says Osin, Asian investors are planning to diversify the dollar risks of their investments.       

At the same time, the minister did not rule out the possibility that Russia could become more involved in international aid and development programs. The Finance Ministry is already taking part in events related to the replenishment of IMF capital, as well as in the European borrowing agreement.   

Moreover, in the next two months, the Finance Ministries of Russia and Ukraine will draft an agreement on further conditions for the Black Sea Fleet’s presence in Ukraine, Kudrin said yesterday after his meeting with Ukraine’s finance minister, Fyodor Yaroshenko.

“In the new agreement, we must establish a way of determining the discount on the price of gas as a source of payments of the Black Sea Fleet’s rental fees after 2017,” said the Russian minister. Concrete parameters will depend on the volume and the fact of supplies, as well as the effective prices on Russia’s gas that “will establish the size of the determined discounts.”

Recall that the 2010 agreement, which was signed by the presidents of the two states, established the conditions for such a discount with the price of gas being higher than $336 per 1,000 cubic meters and less. At the same time, the agreement was extended for another 25 years, to 2042, as well as provisioned an increase of the annual rental fees for the Russian Fleet’s presence in Ukraine up to $100 million.

© Autonomous Nonprofit Organization “TV-Novosti”, 2005 - 2011. All rights reserved.

January 18, 2011Is the Consumer Nation Retreating?http://www.russiaprofile.org/page.php?pageid=Business&articleid=a1295372961

By Tai AdelajaRussia Profile

Russian Shopaholics Adopt a Wait-And-See Attitude as the Economy Struggles to Recover

Long known for their lack of thriftiness and impulse buying, post-Soviet Russian consumers are showing less inclination to spend, as falling real incomes weigh heavily on consumer confidence, a new Consumer Survey published on Monday by Credit Suisse Research Institute shows. The report also found that very few Russians expect their personal financial situation to improve in the coming months, while many even expect times to get tougher.

“The cyclical outlook for the Russian consumer is, on the whole, somewhat less optimistic compared to consumers in the other BRIC markets,” Credit Suisse researchers wrote in the report, which explores the spending patterns and preferences of consumers in the Brazil, Russia, India and China (BRIC) markets as well as Egypt, Indonesia and Saudi Arabia.

Together, the countries represent over three billion of the world’s population with a combined GDP of over $10 trillion. “The survey provides both regional and global investors a unique bottom-up perspective of the drivers at the heart of the emerging consumption story,” Stefano Natella, the head of global equity research at Credit Suisse, said in the report. “In introducing the Credit Suisse Consumption Map, the report sets out the considerations for what to invest in and where.”

There is an across-the-board increase in consumer confidence in the emerging markets, with 38 percent of respondents saying they expect some improvement in their personal finances over the next six months, compared to nine percent who expect some deterioration, according to the survey. Brazil and China topped the list of countries with the most confident consumers, with 63 percent of Brazilians and 45 percent of Chinese saying that they expect an improvement in their financial situation. Russia followed Egypt, which sits on the last rung of the consumer confidence ladder. Some 27 percent of Russian consumers said they expect improvement in their financial situation in the coming months, while ten percent said they expect it to get worse.

Income disparity within the emerging markets is set to get wider and impact consumption patterns, says the report. A large proportion of households in countries surveyed live on less than $1,000 a month, but those in the high income brackets are expected to continue to see much greater growth than the low-income earners in all markets, the report states. The disparity in income is expected to translate into high demand for essential items such as protein consumption or mobile phones among the low-income earners in India, Indonesia and Egypt, while the consumption of high-ticket items will be more widespread in relatively rich markets such as Russia and Saudi Arabia, the report finds.

A similar countrywide poll conducted by the Levada Center between December 17 and 21 showed that the end-of-the-year rally in consumer sentiment was much more modest compared with the previous New Year holidays. The consumer confidence index inched up just four percent in December versus the previous month. By contrast, in December

2009 the Russians’ propensity to consume was thrice as high, hitting 13 percent even as the crisis hits home harder. But in 2010, only about seven percent of Russians expected improvement in their personal or family fortunes in 2011, reflecting the lackluster economic performance of the previous year.

Russians’ assessment of the current situation in the consumer market in December was only five percent above the November level, while subjective perceptions of the dynamics of personal finance over the past year continue to deteriorate for the second month in a row, the Levada report said. “What was peculiar about last year is that most Russians saw little or no evidence of economic recovery, even though negative tendencies were also not obvious,” said Marina Krasilnikova, the head of consumer research at the Levada Center. “There is no doubt that there is a steady increase in the standard of life for most Russians over the past year, especially for those in the top income bracket. But many Russians do not see any reliable basis for such growth that could help them make critical decisions about future consumption. This is why very many Russians are very cautious about spending at this stage.”

Because of their sheer size, China and India currently dominate at most income levels. The number of high income households in India, earning over $2,000 per month, is more than twice that of Russia, despite its per capita GDP being 80 percent lower than Russia’s. Demand for essential goods and services will be stronger in Indonesia, China and Brazil, as lower income earners experience higher income growth rates than their counterparts in other emerging markets, according to the Credit Suisse report. As income levels improve in other emerging markets, however, there will be an upswing in demand for international brands such as cars, perfume and fashionable goods, over locally made products, except for essentials like bottled water and dairy products. Positive real income growth for the high-end earners means that intentions to purchase items such as cars and real estate will rise steeply at the top of the income scale along with a spike in tourism, the researchers said.

The survey notes substantial structural differences in the savings culture across these markets. China and India both exhibit strong savings cultures, while Brazil and Russia have low saving habits. Russian consumers are also under-banked and under-serviced by financial products, according to the report. Only 24 percent of households in Russia have bank accounts, compared to 37 percent in Indonesia and 80 percent in China. Stock market investments or life insurance policies barely register for the average household in Russia, the researchers noted. “On many metrics, infrastructure in Russia is much more advanced than it is in many of the other emerging markets, but when it comes to financial infrastructure, the market scores badly,” the authors said. “The opportunities for the banking sector to expand both in reach and product offering seem considerable.”

Russian consumers were particularly hard-hit by the global financial crisis between Autumn 2008 and Spring 2009, according to analysts at the Levada Center, who have been monitoring the consumer confidence index every month since 1993. There was a whiff of optimism in fall 2009 as the economy showed signs of recovery, but the recovery was not sustainable, and consumer confidence slipped by the year’s end. The

same picture was replicated in 2010, when initial optimism and consumer confidence gained momentum early in the year only to wane as economic growth stuttered. The peak in consumer confidence came in March of 2008, as the inflow of petrodollars boosted consumer credit and triggered a spending binge on the domestic market.

But while the shopaholic tendencies of early 2008 are still a long way off, analysts said there are many Russians who are willing to open their purses wide enough to feed another round of shopping frenzy in the near future. Renaissance Capital consumer-market analyst Natalia Zagvozdina said the modest growth in the economy this year has already boosted consumption in the country’s retail sector. “The retail sector continues to grow at a phenomenal rate in real terms,” Zagvozdina said. “There is more consolidation in the sector and many big players like X5 and Magnit are expanding market share or increasing their investment in the sector by several million dollars in the New Year.”

Other experts said binge spending is a characteristic feature of post-Soviet Russia even though the crisis has forced some consumers to take a breather. “The binge spending that was characteristic of the pre-crisis period only compensated for the pent-up demand that existed from the Soviet era, but a lot of people are still in need of high-ticket items such as new apartments and modern cars today,” Krasilnikova said. Many more need money to send their kids to fee-paying schools which they simply could not afford in the past. So, as soon as they sense that the present economic growth is both stable and sustainable, Russians will start spending again, perhaps this time with a vengeance.”

Widest Yield Gap Since October Signals Rate Jump: Russia Credit http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aMoRh1qe602w

By Emma O’Brien

Jan. 19 (Bloomberg) -- The widest gap since October between yields on government bonds due in 2016 and those on shorter- dated debt signals growing investor certainty that the central bank is ready to raise borrowing costs for the first time in two years.

The difference between yields on ruble-denominated OFZs maturing in five years and bonds due in July next year reached 167 basis points, or 1.67 percentage point, last week, the most since Oct. 12, according to data compiled by Bloomberg.

The fastest inflation in a year may force Bank Rossii to raise the record-low refinancing rate before the end of March, Chairman Sergei Ignatiev said last month. The last increase in the refinancing rate was December 2008. Traders are pricing in the largest jump in Russian interest rates in at least 14 months, according to forward rate agreements.

“The central bank has already said that rates might be higher and people have decided to sell long-dated bonds because they’re concerned the prices are going down,” Konstantin Kostrub, head of fixed-income trading at ING Groep NV in Moscow, said in a phone interview. “Long-dated bonds have added in more risk of interest-rate hikes.”

Longer term borrowing costs are climbing just as the government targets raising a record 1.74 trillion rubles ($58.2 billion) from OFZ sales this year to help plug the budget deficit that Finance Minister Alexei Kudrin said on Dec. 29 may be equal to 3 percent of gross domestic product. The Finance Ministry canceled its last OFZ auction of 2010, balking at the “unfavorable market conditions” that drove yields on the 2016 notes to a four-month high.

First Auction

Russia’s Finance Ministry is selling 30 billion rubles of OFZs due in 2014 in its first auction this year of government bonds today, offering yields of 7 percent to 7.1 percent, according to guidance published on its website yesterday. The yield on the 2016 bonds has climbed 33 basis points since they were issued in August.

“The paper being placed is almost ideal as it’s not very short and not very long,” Dmitry Dudkin, head of fixed-income research in Moscow at UralSib Financial Corp. said by e-mail yesterday. “With the threat of tightening, the curve remains very steep so there’s higher demand for shorter paper.”

The gap in yields between July 2012 OFZs and five-year notes was 154 basis points yesterday, up from 124 at the end 2010, data compiled by Bloomberg show. Russia’s dollar bonds due in 2020 yielded 159 points more than 2015 notes on Jan. 5, within a basis point of the widest gap since the securities were issued last April.

Drought

The central bank’s key interest rates include the 7.75 percent refinancing rate and a 6.75 percent rate charged on one- and seven-day loans. Policy makers raised the deposit rate 25 basis points to 2.75 percent at their last meeting of 2010, saying in a statement that “inflation risks” needed greater attention. Three-month forward-rate agreements were pricing in 91 basis points of increases to official borrowing costs by mid- April, after 14 cuts to the refinancing rate between April 2009 and May last year.

Inflation accelerated to 8.8 percent last month, the fastest pace since December 2009, as Russia’s worst drought in at least 50 years drove up food prices and crippled the farming industry while the economy’s recovery from the record slump in 2009 stoked consumer demand. Quickening inflation is “beginning to worry” policy makers, Ignatiev said Dec. 8.

The increase in the deposit rate, the interest on rubles kept with the central bank, has limited the appeal of OFZs for Russian banks as it reduces the carry, or yield premium, earned by investing in the federal bonds and makes borrowing between banks more expensive, Maxim Tishin, who helps manage $850 million of debt including OFZs at UFG Asset Management in Moscow, said in a phone interview last week.

Inflation Gloom

“They tightened exactly where it was needed and it will put pressure on the yields of” OFZs, Tishin said. “Yields are under pressure to go higher and as inflation ticks up everything will get more gloomy.”

The ruble gained 0.3 percent to 29.9 per dollar yesterday, the strongest since Oct. 7. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency movements and interest-rate differentials and allow companies to hedge against currency movements, showed the ruble at 30.1105 per dollar in three months.

The cost of protecting Russian debt against non-payment for five years using credit-default swaps was unchanged at 142 basis points, according to data provider CMA. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.

Gazprombank

Credit-default swaps for Russia, rated Baa1 by Moody’s, its third-lowest investment-grade ranking, cost the same as similar contracts for Turkey, which is rated four levels lower at Ba2.

The extra yield investors demand to hold Russian debt rather than U.S. Treasuries fell 6 basis points to 185, according to JPMorgan Chase & Co. EMBI+ indexes. The difference compares with 126 for debt of similarly rated Mexico and 163 for Brazil, which is rated two steps lower at Baa3 by Moody’s.

The yieldspread on Russian bonds is 48 basis points below the average for emerging markets, according to JPMorgan indexes.

The prospect of rising interest rates is also spurring Russian companies to issue shorter-term debt, with 78 percent of the 55 issues of ruble or dollar-denominated bonds announced since the end of October to mature in five years or less, Bloomberg data show. OAO Gazprombank, the lending arm of Russia’s gas export monopoly, plans to sell 10 billion rubles of three-year bonds, a banker with knowledge of the transaction said Dec. 3.

Fed Funds

Investors are more inclined to buy short-term debt when they expect rates are going to rise because it leaves them less exposed any drop in price, Sergey Dergachev, who helps manage the equivalent of $8.5 billion in emerging-market debt at Union Investment in Frankfurt, said by phone.

After cutting its target Fed Funds rate to near zero in the wake of the global financial crisis, the U.S. Federal Reserve may soon be prompted to consider raising costs, Dergachev said. Inflation quickened 0.5 percent in December from the previous month, more than the 0.4 percent median forecast of economists surveyed by Bloomberg. Futures

put the chance of a 25 basis point increase to the 0.25 percent Fed Funds rate at 31 percent by the end of the year.

“Globally right now people are getting into shorter duration, they’re getting ready for a curve shift upwards,” Tim McCarthy, who helps manage $1 billion in emerging-market assets, including the Russian government’s dollar bonds due 2015, at Valartis Asset Management, said by phone from Geneva, Switzerland. Quickening inflation is “pushing people in to the shorter end,” he said.

To contact the reporter on this story: Emma O’Brien in Moscow at eobrien6@bloomberg.net

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

Last Updated: January 18, 2011 17:01 EST

Business, Energy or Environmental regulations or discussions

Norilsk Nickel, Polyus Gold, X5 Retail: Russian Equity Previewhttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aTBUwaPvPD48

By Jason Corcoran

Jan. 19 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index slipped 0.4 percent to 1,765.30 at the close in Moscow. The dollar-denominated RTS Index was little changed at 1,900.94.

OAO GMK Norilsk Nickel (GMKN RX): Copper futures rose on mounting concern that global supplies will trail demand and nickel prices climbed to an eight-month high on signs of increasing consumption in China, the world’s biggest metal buyer. Norilsk Nickel, Russia’s largest miner, climbed 0.5 percent to 7,497.61 rubles.

OAO Polyus Gold (PLZL RX): Gold rose in New York on demand from individual investors for bars and U.S. Mint coins. Polyus, Russia’s biggest gold producer, fell 0.4 percent to 1,821.02 rubles.

X5 Retail Group NV (FIVE LI): Russia’s largest supermarket chain is due to report fourth-quarter and full-year results. “We believe the company could surprise positively on its performance in the St. Petersburg region,” Alfa Bank analysts Alexandra

Melnikova and Irina Prokopyeva wrote in a report e- mailed yesterday. X5 advanced 0.5 percent to $47.25 on the London Stock Exchange.

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

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

Last Updated: January 18, 2011 22:00 EST

BNP Paribas sues Russian grain trader for $20 mlnhttp://uk.reuters.com/article/idUKLDE70I08A20110119

8:26am GMT

MOSCOW, Jan 19 (Reuters) - BNP Paribas (BNPP.PA: Quote, Profile, Research) has filed a lawsuit for $20 million against one of the biggest Russian grain traders Rosinteragroservis (RIAS), according to a Moscow Arbitration Court document seen by Reuters on Wednesday.

RIAS declined to comment.

BNP Paribas had no immediate comment.

The court document said preliminary hearings are scheduled to take place on March 14.

Krasnodar-based, privately owned RIAS, is 164th in Forbes' Russian top 200 private companies' list.

According to data from trader Valars Group, RIAS was Russia's No.2 grain exporter in July-December 2009 after the International Grain Co, the Russian unit of Glencore.

It shipped 1.27 million tonnes of grain in the period, or 10 percent of the total Russian grain exports. (Reporting by Aleksandras Budrys; Editing by Alison Birrane)

Russian Banks Made Record Profits Last Year, Kommersant Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ai3ifkPZeNTM

By Stephen Bierman

Jan. 19 (Bloomberg) -- Russian banks made record total profits of 550 billion rubles ($18.4 billion) last year, according to initial figures, Kommersant reported, citing Gennady Melikyan, the central bank’s first deputy chairman.

The previous record was 508 billion rubles in 2007, the newspaper said, citing Melikyan.

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

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

Last Updated: January 19, 2011 00:05 EST

Banking System Earned a Record RUB550bn in 2010 http://www.bne.eu/dispatch_text14009

AtonJanuary 19, 2011

Kommersant reports today (19 Jan), citing the Central Bank of Russia's First Deputy Chairman Gennady Melikyan, that yesterday, the CBR published its preliminary estimate of pre_tax earnings in the banking system in 2010. These reached RUB550bn (it noted that the figures for Sberbank are tentative). The results are higher than the pre_crisis 2007 level of RUB508bn. To compare, in 2009, the banking system earned only RUB205bn, about half the amount recorded in the previous year. In Oct 2010, CBR chief Sergei Ignatyev announced forecasts for FY10 banking earnings of around RUB500bn.

On the one hand, a straightforward interpretation would be to point to the quick recovery of the banking sector. On the other hand, we believe it is premature to reach such a conclusion. We note that the results are still preliminary; they reflect pre_tax profits alone; and they include Sberbank's profit solely as an estimate. There are many other signs that suggest the banking sector is still in crisis mode. Profitability is still quite low: for example, Moody's estimates the RoA of the banking system in 2007 was around 3%, while in 2010 it stood at 1.7_1.8% (RoE was 23% in 2007 and 13% in 2010). Next, margins are also low at 3.5% last year, compared to 5.5% in 2007, according to Interfax. Another explanation for significant growth in the sector's bottom line is the decline in loan loss provisions in 2010 vs 2008 and 2009 and some banks also started reversing provisions in 2010. We recall that LLPs were the greatest income statement 'consumer' of operating profit in 2008_09.

Bottom line The results are generally positive for the banking system, but we urge investors not to overestimate the positive effect on a fundamental basis. The banking sector is recovering but we are still quite far from true 'recovery mode'.

Vnesheconombank reports higher RAS net profit for 2010

http://www.rbcnews.com/free/20110119114329.shtml

      RBC, 19.01.2011, Moscow 11:43:29.The net profit of the state corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank) rose by 26.8 percent year on year to RUB 28.901bn (approx. USD 967m) in 2010 under Russian Accounting Standards (RAS), according to the corporation's report seen by RBC today. The figure does not take into account the events that occurred after the reporting date.

      In the fourth quarter, net profit amounted to RUB 3.922bn (approx. USD 131m), soaring more than tenfold quarter on quarter.

Rusal Defends Refusal to Sell Norilsk Nickel Shares (Update1) http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a_5qJ0g3RPmw

By Yuriy Humber

Jan. 19 (Bloomberg) -- United Co. Rusal, facing investor questions for refusing to sell its stake in nickel producer OAO Norilsk Nickel to cut debts, said it continuously benefits from the shareholding.

“The price of the Norilsk stake is going up and that helps our balance sheet,” Oleg Mukhamedshin, deputy chief executive officer of the biggest aluminum producer, told Bloomberg TV. “We’re benefiting every day.”

Norilsk management led by Chief Executive Officer Vladimir Strzhalkovsky offered Rusal at least $12 billion last month for the aluminum maker’s 25 percent stake, seeking to end a four- year battle for control of the nickel producer. The sale should go ahead as it would increase Rusal’s market value by a “minimum 50 percent,” the aluminum maker’s second-largest owner, Mikhail Prokhorov, said Dec. 23. Rusal said Dec. 29 it had no intention of selling.

Rusal’s debt almost doubled after it bought Norilsk shares in 2008 before commodity prices collapsed, leading to a net loss of $6 billion that year. Still, holding Norilsk shares helped Rusal return to profit in 2009 as their value doubled. Norilsk has surged a further 77 percent since Jan. 1 last year.

Morgan Stanley would boost its Rusal valuation by HK$1.60, or more than 10 percent, if the aluminum maker sold Norilsk shares as that would help it to fund new development projects, analyst Dmitriy Kolomytsyn said in a report yesterday. Rusal’s market value is depressed by debt it built up through the purchase of the Norilsk stake, Prokhorov said last month.

Rusal’s debt repayments may be as much as $1.5 billion a year over four years, Troika Dialog said after the company restructured more than $7.4 billion of borrowing in 2009. The producer’s net debt fell to below $12 billion as of Sept. 30.

-Editors: Alan Soughley, Keith Gosman

To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net

To contact the editor responsible for this story: Alan Soughley at asoughley@bloomberg.net

Last Updated: January 19, 2011 00:28 EST

Rusal's Mukhamedshin Interview http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a_5qJ0g3RPmw

Jan. 19 (Bloomberg) -- Oleg Mukhamedshin, deputy chief executive officer at United Co. Rusal, the world’s largest aluminum producer, talks about the company's stake in OAO GMK Norilsk Nickel. Mukhamedshin also discusses Rusal's plan to look to yuan-denominated bonds to help refinance almost $5 billion in foreign loans this year. Rusal, which last year became the first from Russia to sell shares in Hong Kong, has hired four banks for a pilot 1 billion-yuan ($152 million) bond sale, Mukhamedshin said yesterday. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia."

RusAl Looks to Chinese Yuan to Refinance $5Bln in Loans http://www.themoscowtimes.com/business/article/rusal-looks-to-chinese-yuan-to-refinance-5bln-in-loans/429178.html

19 January 2011Bloomberg

United Company RusAl will look to yuan-denominated bonds to help refinance almost $5 billion in foreign loans this year as the biggest aluminum producer trims borrowing costs by extending its appeal to Asian investors.

The company, which last year became the first from Russia to sell shares in Hong Kong, has hired four banks for a pilot 1 billion yuan ($152 million) bond sale, deputy chief executive Oleg Mukhamedshin said in Hong Kong on Tuesday. More yuan bond sales may follow, he said.

“We have nearly $5 billion of foreign loans, which we are planning to refinance this year, and clearly there are a number of options for financing for this,” Mukhamedshin said.

RusAl hopes it can attract Asian investors by offering better returns than available on Hong Kong bank deposits, Mukhamedshin said.

“Until we see the details of the bond, it’s hard to say how much appetite there will be from investors, but in general terms it’s good that big companies are interested in issuing yuan bonds,” said Weiping Kong, head of fixed income at Haitong International Asset Management.

RusAl, which doesn’t have credit ratings, restructured almost $17 billion of obligations in 2009 as demand for metals slumped during the global recession.

RusAl shares rose 3 percent in Hong Kong trading and closed the day at HK$12.22 ($1.57). The benchmark Hang Seng Index was little changed, up 0.01 percent.

The company’s yuan bond sale will take place before April, Mukhamedshin said. One of the four banks hired is from Hong Kong, one from China, one from Russia and another from Europe, he said, without naming them.

The transaction would be only the second yuan-denominated bond offering by a Russian company, following the December sale by VTB Capital, the investment arm of the nation’s second-largest lender, VTB Group.

RusAl, which owns two plants in China, raised $2.2 billion from a share sale in January 2010. Its net debt was $11.7 billion at the end of the third quarter, Mukhamedshin said.

RusAl must lower its debt to three times earnings before interest, tax, depreciation and amortization, which were $1.26 billion in the first half of last year, before it can start paying dividends, according to the debt restructuring accord.

Separately, RusAl expects global demand for aluminum to rise 8 percent this year, with demand from China likely rising 12 percent, Mukhamedshin said.

Skolkovo Fund to offer grants to high-tech start-ups

http://www.rbcnews.com/free/20110119104240.shtml

      RBC, 19.01.2011, Moscow 10:42:40.Russia's Skolkovo Fund Management Company intends to grant RUB 36.2bn (approx. USD 1.2bn) to high-technology start-ups registered in the Skolkovo research and development center in the next three years, RBC Daily reported today citing the fund's Vice President Stanislav Naumov. The fund does not intend to demand repayment of the grants.

      Specifically, the fund plans to disburse RUB 10.6bn (approx. USD 355m) worth of grants in 2011, RUB 11.8bn (approx. USD 395m) in 2012, and RUB 13.8bn (approx. USD 462m) in 2013, Naumov said. According to Naumov, the Skolkovo Fund is prepared to finance 50 percent of all projects, and the remainder of funds will have to be provided by private companies.

Deripaska Will Build Apartments in Moscow City, Kommersant Says

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aodvNwsuuzt0

By Stephen Bierman

Jan. 19 (Bloomberg) -- Russian billionaire Oleg Deripaska will build apartments rather than offices in the Moscow City development project, Kommersant reported, citing an unidentified person.

The change in plans results from an oversupply of office space in the project and the need to comply with construction timelines set by the city, the newspaper said.

Construction may cost as much as $540 million, Kommersant said, citing Konstantin Kovalev, the managing partner at Blackwood, a Moscow real-estate agency.

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

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

Last Updated: January 19, 2011 00:42 EST

Ablyazov reportedly loses one of his largest assets in Russia (Eurasia Logistics)http://www.bne.eu/dispatch_text14009

Troika DialogJanuary 18, 2011

At end last week, Russian business dailies Vedomosti and RBC Daily published articles suggesting that Eurasia Logistics, a Russian-based operator of warehouses, had disposed of its Northern Domodedovo logistics complex to a consortium of Russian businessmen. According to the article, the transaction was closed at end 2010 and the overall deal was valued at $500 mln. This estimate probably refers to the total value of the asset, including debt. The complex was reportedly pledged as collateral against unquantified loans from EuroHypo, the loans were allegedly poorly serviced and the bank decided to seize the collateral while simultaneously striking an agreement to sell it to a third party.

The structure of the disposal remains murky, since media, citing representatives of the asset's new owners, reports that the asset was seized without any involvement of the previous owner, which contradicts Russian legal requirements for the handling of loan collateral (without approval of the borrower, the collateral of the defaulted loan may be

seized and subsequently sold at open tender only following a decision of the local court).

Northern Domodedovo is a class A, fully completed 100% warehouse complex with floor space of 0.56 mln m3, located close to Moscow's largest international airport Domodedovo. Eurasia Logistics is considered to be the most valuable asset of Mukhtar Ablyazov, the former controlling shareholder of Kazakhstan's BTA Bank, and Northern Domodedovo is probably the company's best facility.

BTA Bank, as part of its loan collection efforts, is currently pursuing legal cases against Ablyazov in Russian, Kazakh and UK courts. In early December 2010, the England and Wales High Commercial Court upheld a receivership order against Ablyazov's assets, appointing an external administrator (KPMG). Under the previous freezing order, Ablyazov could manage his assets "in the ordinary course of business" and actually managed to sell some of them. The alleged disposal of Northern Domodedovo may violate this order, and in today's communication to investors, BTA Bank stated that together with the administrators it is looking into the deal to determine its further actions. At the same time, the loss of a large and valuable component of the potential recovery pool, if it cannot be reversed, is clearly negative news for BTA Bank bondholders, especially holders of its recovery units. However, if BTA Bank proves that Eurasia Logistics violated the court order while disposing of the asset, it would most likely accelerate the handling of the case.

BTA 18 senior Eurobonds were quoted on Monday at 109.75% of par (YTM of 9.5%), while BTA 20 recovery notes were quoted at 8.25% of par.

Alexey Bulgakov

INTERVIEW: Otkritie Financial, the Charles Schwab of Russiahttp://www.bne.eu/storyf2466/INTERVIEW_Otkritie_Financial_the_Charles_Schwab_of_Russia

Ben Aris in Moscow January 19, 2011International investors might be wary of the Russian stock market, but not the Russians, who have proven to be savvy investors when it comes to the wild ride that Russian stocks often provide.

Otkritie Financial Corporation wants to become the Charles Schwab of Russia. It is early days yet, but since the onset of the global crisis in 2008 asset managers say that retail investors have increasingly abandoned mutual funds (known as PIFs in Russian) in favour of setting up private accounts with Micex to trade equities themselves; Micex reports that it now has over 400,000 individual accounts.

Otkritie hopes to cash in on this trend by providing discount brokerage services and a platform for Russian day-traders or those who want to invest their money directly into the

stock market. But like most things with Otkritie, it will be a slow and steady build: today, the company has some 20,000 personal trading accounts and 20 offices, compared with Charles Schwab's 8m accounts serviced by 300 offices.

Now the bank wants to pick up the pace a bit and after Russian state-owned banking giant VTB Group bought a 19.9% stake in March 2009 for $150m as part of a "strategic alliance," it has the means to do so. "We were growing arithmetically, but now we want to grow geometrically," says Vadim Belyaev, Otkritie's CEO in an exclusive interview with bne. "We see VTB as a competitor, but I am not sure they see us as one; we are very different sizes and we have a much more focused strategy."

Expanding abroad

The first new direction the bank wants to take is to diversify its client base into international markets and build on its equity sales and trading business, which previously was exclusively focused on Russian clients.

Flush with fresh capital, Otkritie went hunting for staff that could take it into international markets by poaching most of Renaissance Capital's equity research team in October: Tom Mundy, Berthold Maier, Richard Beston, Vinay Ruparelia and head of equity trading, Sunil Joshi, left for Otkritie, which is paying top dollar for the team.

Otkritie also recruited Pavel Averkiev as vice president of equity sales, who previously worked as a director of marketing at Prosperity Capital Management, Russia's biggest portfolio investor, and Wermuth Asset Management, another veteran Russian fund. In all, the bank plans to hire 90 new people to bring the total to 400.

Headhunters in Moscow say the aggressive new hires have single-handedly pushed remuneration for bankers back up almost all the way to pre-crisis levels and once again experienced A-list traders and sales people are in short supply in the Russian capital.

At the same time, the bank has been expanding its traditional banking business and bought three small banks and merged them into the parent bank. "The resulting bank has a retail focus that we will develop over the next five years and we are specifically targeting small and medium-sized enterprises (SMEs)," says Belyaev. "But the more general plan is to find corporate clients and offer them the full range of services, including leveraging the investment banking services to existing corporate clients to earn extra profits."

SMEs have become the watchword for most bankers in Russia these days. In the 1990s, everyone chased after Russia's blue chips that controlled access to the oil and raw material export revenues. However, with over 1,000 banks in the game, margins have been compressed to the point where this business is hardly profitable for smaller banks any more. SMEs with their smaller volumes but much larger margins have become the touchstone for most banking expansion strategies.

Otkritie's advantage is that thanks to its acquisition of Petrovsky Bank in St Petersburg, it has an extremely well developed retail network in Russia's northern capital with over 240 offices in the city. "This is one of the biggest urban office networks in Russia; it is bigger than [state-owned behemoth] Sberbank's network in St Petersburg," claims Belyaev. "We literally have a branch on almost every corner of the city."

Capturing St Petersburg, the second largest city in all of Europe, has given the bank a very solid foundation to build on, as regional expansion is another touchstone of banking strategy these days. Together with the bank's 110 offices in Moscow and another 60 in other Russian regions, Otkritie has built up a strong branch network not far off the 800 offices that the other leading commercial banks like Rosbank command. (Sberbank is in a league of its own with some 25,000 branches across the whole country.) "Following the mergers, we are in the process of rationalising the network, but the plan is to continue to expand selectively in various regions," says Belyaev.

He insists that his bank has no ambition to take on the leading commercial banks at their own game. The bank hopes to compete on the quality and range of its services, not in how many boots it can put on the ground. "Clearly, we need a network to get the initial deposits, but the goal is to change the way people think and teach them about the benefits of a diversity of products," says Belyaev, adding that already the brokerage and commercial banking services are contributing about half each to the bank's bottom line.

Finally, the bank is developing an asset management business and is in the market to buy an insurance company, as eventually both these business are expected to grow fast despite being extremely underdeveloped at the moment. "Our asset management business is very small, but it should exist to complete the range of services we offer," says Belyaev. "But we know how to wait and we have already been working a long time. The point is to be ready, so when things grow faster we will not be a start up, but able to scale up."

Belyaev says that a bank like Otkritie's future is tied to the future of Russia and the success that the government has in pushing through reforms. In fact, Otkritie's investments are an investment into this future, as without the growth of SMEs his bank will struggle to grow. "We see that there are a few huge corporate in the raw materials sector that are comfortable, but to get real economic growth we need to see the SME sector develop," says Belyaev. "Until the SMEs develop, we can't have real economic growth."

Microsoft switches Russian sales to roublehttp://www.moneycontrol.com/news/world-news/microsoft-switches-russian-sales-to-rouble_514458.html

Published on Wed, Jan 19, 2011 at 11:50   |  Updated at Wed, Jan 19, 2011 at 12:06  |  Source : Reuters

The world's top software producer, Microsoft, will shift its trade with Russian partners to roubles starting in March to ease currency risks for local clients.

Russia will become one of the few countries where Microsoft sells its products for local currency as the majority of Microsoft's global trading remains dollar-based.

Russia, which wants to position Moscow as one of the world's financial centres by 2020, aims to increase the global role of the rouble.

As part of the plan, the MICEX exchange has launched direct currency trading between the rouble and the Chinese yuan in late 2010.

"The transition to the local currency signals our confidence in the stability and the potential development of the Russian IT market," Microsoft Russia president Nikolay Pryanishnikov told a conference on Tuesday.

The fixed exchange rate will vary from 29 roubles per dollar for retail partners to 33 roubles per dollar for corporate clients, he said. The rouble last traded at 29.9 against the greenback.

"Earlier, Russian market volatility did not allow us to switch to the rouble but now we are taking on the currency risk, previously laid on our buyers," Pryanishnikov said.

"We expect this will increase the number of partners and sales volumes in Russia and serve as an example for other companies to launch rouble-based price lists."

Media Analyst Pinpoints Problems with Russian Sell-off of State Media Holdingshttp://pr-usa.net/index.php?option=com_content&task=view&id=592999&Itemid=29

Announcing publication of a timely analysis of Russia's plans to divest the state of its assorted media properties.

"Is the Russian government trying to cash in on the sale of worthless media properties? That pointed question was asked by media business analyst William Dunkerley in his analytical report "Medvedev's Tough Sell" carried in the January 19 edition of the Moscow Times. He questions whether all of the government's media holdings actually have any commercial value. Many are losing money, he points out.

In the most recent State of the Nation address, President Dmitry Medvedev announced intentions to divest the government of its extensive media holdings. Dunkerley applauds Medvedev's desire to get the government out of the media business and let media decisions to be made independently. His analysis, however, calls into question the practicality of the sell-off plan.

The analysis can be seen here: http://www.themoscowtimes.com/print/article/medvedevs-tough-sell/429191.html

The analysis identifies a number of obstacles that might keep Medvedev's sell-off plan from ever achieving its objectives. Dunkerley concludes it would be more productive if the state were to "create the conditions for truly consumer-centered media outlets to emerge and thrive."

Dunkerley is principal of William Dunkerley Publishing Consultants, a leading firm providing business consulting and organization development services. He is a recognized expert on the business needs of media enterprises in the former Soviet Union and Eastern Europe. His firm is based in New Britain, CT, USA.

Russia: New Hyundai plant commences productionhttp://www.automotiveworld.com/news/emerging-markets/85512-russia-new-hyundai-plant-commences-production

Wednesday, January 19, 2011, AutomotiveWorld.com

Hyundai has officially commenced production at its plant in St Petersburg. The company says this, its sixth plant outside South Korea, is its most modern overseas plant.

Hyundai Motor Manufacturing Russia (HMMR), Hyundai's wholly-owned subsidiary, was officially opened in September 2010. It will produce the OEM's four-door Solaris sub-compact sedan, designed specifically for the Russian market.

The plant has output capacity of 150,000 vehicles per year. Hyundai's production target for HMMR in 2011 is 105,000 vehicles. The plant currently employs more than 1,300 workers, many of whom were trained at Hyundai factories in South Korea and the Czech Republic.

"This is a historic moment, not only for Hyundai, but for Russia, as we are the first foreign automaker to operate a full-cycle manufacturing plant here," said Gui-Il Chun, general director of HMMR.

Solaris' adaptations for the Russian environment include increased ground clearance of 160mm, larger-than-average four-litre washer fluid reservoir with fluid-level sensor, a 60Ah battery for better cold-start performance, and a heater duct for rear-seat passengers.

These are standard features, while options include front-seat heaters, side-mirror heaters, and a heater for the windshield wiper rest.

At present Hyundai has manufacturing facilities in China, India, the US, Turkey and the Czech Republic. In late 2010, the company started building a third plant in China. It expects to break ground on a plant in Brazil later this year.

Published on Wednesday, January 19, 2011

UPDATE 1-Russia's X5 Retail Q4 sales up 35 pcthttp://in.reuters.com/article/idINLDE70I09X20110119

1:09pm IST

* Q4 up 35 pct vs 21 pct increase in previous quarter

* Newly acquired Kopeika chain included from Dec. 1

* Growth also helped by store openings, spending recovery

* FY 2010 sales up 24 percent, within forecast range

(Adds details)

MOSCOW, Jan 19 (Reuters) - X5 Retail Group (PJPq.L: Quote, Profile, Research), Russia's top grocer by sales, posted a 35 percent year-on-year increase in fourth-quarter sales helped by a consumer spending recovery, new openings and the acquisition of Kopeika.

Sales came in at 106.3 billion roubles ($3.56 billion), including Kopeika results from Dec. 1, against 78.6 billion roubles in the final quarter of 2009, X5 said on Wednesday.

X5, which bought Kopeika for $1.65 billion, added 839 stores in the fourth quarter, of which 179 stores organically.

Like-for-like sales, which exclude new stores, were up 10 percent, above the 6 percent rise recorded in the previous quarter, helped mainly by food price inflation which spiked in the second half of the year due to a severe summer drought.

X5, just under 50 percent owned by billionaire Mikhail Fridman's Alfa-Group, said the average bill was up 8 percent, while the number of transactions grew 2 percent.

Full-year consolidated sales totalled 341.6 billion roubles, having increased 24 percent in rouble terms within its growth forecast 'in the low-20 percent range'.

For 2011, the company reiterated top-line growth forecast of 40 percent, with organic growth seen in the low-20 percent range and the rest set to be contributed by Kopeika. [ID:nLDE6BM07N] ($1=29.90 Rouble) (Reporting by Maria Kiselyova, Editing by John Bowker)

For the Record http://www.themoscowtimes.com/business/article/for-the-record/429205.html

19 January 2011

Evraz Group said Tuesday that crude steel production climbed 7.2 percent in the fourth quarter from the previous three months to 4.15 million tons. (Bloomberg)

Novatek reported Tuesday that gross production in 2010 totaled 37.78 billion cubic meters of natural gas, up 15.3 percent over 2009. (MT)

Activity in the Oil and Gas sector (including regulatory)

Russia eyes higher oil product tax from March-paperhttp://in.reuters.com/article/idINLDE70I02620110119

11:41am IST

MOSCOW, Jan 19 (Reuters) - Russian companies may face higher oil products export duties from March, with the Energy Ministry proposals approved this week at a meeting chaired by Deputy Prime Minister Igor Sechin, Kommersant business daily reported.

Under the plan, the crude oil export duty could be lowered by around 7 percent. At the same time, the unified export duty on oil products, both light and dark duties taken together, could be hiked from 60 to 66 percent of the duty levied on crude oil.

Russia's second largest oil producer, LUKOIL , and mid-sized firm opposed the plans at Tuesday's meeting with Sechin, Kommersant said, citing sources.

The companies -- which analysts say stand to lose out from the proposed tax changes -- declined to comment when contacted by the paper, it added.

Alliance Oil and Gazpromneft , which have high refining margins, may also be negatively affected.

On the flipside, companies with low refining cover, such as Surgutneftegaz , Tatneft and TNK-BP, could benefit if the new regime is introduced, Citi analysts said in a note last week. (Writing by Toni Vorobyova; Editing by Michael Urquhart)

Energy Ministry targets export duties rebalancing for March http://www.bne.eu/dispatch_text14009

Troika DialogJanuary 19, 2011

The Energy Ministry is proposing to set the export duty on oil products at 66% of the duty on crude, and reduce the top rate of the crude export duty from 65% to 60% as soon as March, Kommersant reports. The proposal has the backing of Deputy Prime Minister IgorSechin, while Bashneft and LUKoil oppose it. It is our understanding that the Finance Ministry also remains opposed to the plan, as, on our estimates, the state budget could lose about $3 bln from the changes. As it stands now, the export duties on oil products are due to be gradually equalized at 60% of the export duty on crude by 2013.

We expect the main winners from the rebalancing to be companies with a higher upstream component - Tatneft, Surgutneftegaz (even if it means shuttering parts of the Kirishi refinery) and TNK•BP Holding, with the net losers likely to be Bashneft and Gazprom Neft, though not to any significant extent. Alliance Oil Company would also lose from this, marginally, in 2011 and 2012, while being a net gainer by 2013, when its crude production is due to surpass processing and lighter products become almost exclusive in the product export mix. We have reservations whether this transitional system can be introduced so soon. In any case, this type of rebalancing, which will create winners and losers among corporates, seems rather illogical. The Energy Ministry should, in our view, start with repealing the hike in MET over 2012-13, or even cut it.

Rosneft: TNK-BP owners won't derail BP deal-paperhttp://af.reuters.com/article/energyOilNews/idAFLDE70I01H20110119

Wed Jan 19, 2011 5:40am GMT

MOSCOW Jan 19 (Reuters) - Rosneft expects its deal with BP to go ahead and the British company to resolve any issues with the Russian shareholders of its TNK-BP joint venture, Rosneft's CEO was quoted as saying.

"We are sure that BP will resolve all the issues," Russian business daily Vedomosti quoted Eduard Khudainatov as saying.

An official for AAR, the Russian consortium which co-owns TNK-BP with BP, told Reuters on Monday that the deal between Rosneft and the British firm to develop Arctic oil and gas could be through TNK-BP.

Stan Polovets, the AAR chairman, said that under the consortium's agreement with BP, all new projects in Russia and Ukraine should be executed via TNK-BP.

AAR declined to comment on the Khudainatov statement, Vedomosti said.

BP and state-controlled Rosneft last week agreed to a share swap under which they plan to jointly explore for offshore oil and gas in the Arctic. (Writing by Toni Vorobyova; Editing by Anshuman Daga)

Foreigners Tried to Stop Putin’s Asia Oil Link, Transneft Says

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=apbPc.lvRiUo

By Stephen Bierman

Jan. 19 (Bloomberg) -- Foreign states tried to derail Russian Prime Minister Vladimir Putin’s project to build a network of oil links to supply Asian markets with Siberian crude, national pipeline operator OAO Transneft said.

Representatives of foreign governments met with and funded Russian environmental and public interest groups in the Far East region that sued to stop or delay construction of the pipelines, Transneft Chief Executive Officer Nikolai Tokarev said in comments broadcast on state television today.

“Russia now has a powerful corridor to Asia-Pacific markets and, naturally, many states don’t like Russia having this capacity,” Tokarev said, without mentioning any countries by name.

Transneft finished building the first phase of its East Siberian Pacific Ocean pipeline in 2009, a year behind schedule. The Moscow-based company made its first direct deliveries to China on Jan. 1 via a spur of that link.

When completed as early as next year, the ESPO network will cost 770 billion rubles ($26 billion) and span 4,700 kilometers (2,900 miles), longer than the distance from London to Tehran. It will carry oil from Taishet, beyond the west Siberian basin where most of Russia’s oil is produced, to the Pacific port of Kozmino near North Korea and China.

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

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

Last Updated: January 19, 2011 01:55 EST

Diesel Exports Halted As Russian Crude Tax Dispute Drags Onhttp://www.oilandgasinsight.com/file/95531/diesel-exports-halted-as-russian-crude-tax-dispute-drags-on.html

January 2011 | Industry News

BMI View: The suspension of diesel exports from Belarus is likely to last until an agreement on crude supply is reached with Russia. In the meantime, Belarus has already started formalising its policy of diversifying crude imports by signing a transit deal with Ukraine to use the Odessa-Brody pipeline.

Belarus has reacted to Russia's decision to cut off crude supplies by halting fuel exports to Europe and striking a deal to import crude via the Odessa-Brody pipeline through Ukraine. The move to cease fuel exports in order to meet domestic demand has already had a major impact on European diesel markets but in our view will prove only a stopgap measure for Belarus, which needs to reach a crude supply agreement with Russia as soon as possible. By agreeing to import oil via Ukraine, however, Belarus will reduce its dependence on Russia, strengthening its position when bargaining for supplies to provide a long-term solution to supply shocks.

The Sense Of Duty

In the past Russian companies were exempt from Russian export duties on crude sold to Belarus. In line with broader efforts to phase out subsidies to former satellites, however, in April 2007 Russia imposed a limited excise duty for Belarus at 35.6% of the usual rate on crude exports, simultaneously encouraging Belarus to increase excise duty on product exports to compensate. As a result, Belarus was able to continue importing crude cheaply and exporting both refined products ...

Gazprom

SOCAR plans to double gas sales to Gazprom in 2011http://abc.az/eng/news/main/50987.html

Baku, Fineko/abc.az. This year State Oil Company of Azerbaijan expects to double natural gas supplies for Russia’s gas monopoly Gazprom.

SOCAR first vice-president Khoshbakht Yusifzadeh has stated that in 2011 they expect to deliver 1.5 bn cu m of Azeri gas to Russia.

He linked the increase in supplies launched in 2010 with completion of reconstruction at Siyazan compressor station and repair work.

In 2010, SOCAR supplied 799.751 million cu m (including 40.317 million cu m in December) of gas to Russia. At that, Gazprom has become its major importer: 54.5% of country’s entire export, which in 2010 totaled 1.467 bn cu m of gas, including 115.923 million cu m in December, fell on the share of Gazprom.

SOCAR exports to Russia in compliance with a contract with Russia’s Gazprom. While SOCAR’s minimal commitment is 500 million cu m in 2010, it was expected to deliver 1 billion cu m to the Russian monopoly this year, up to 2 billion cu m in 2011, and over 2 billion cu m in 2012.

19.01.2011 10:45

City Could Lose Gazprom Taxeshttp://www.times.spb.ru/index.php?action_id=2&story_id=33392

By Nadezhda Zaitseva and Anatoly TyomkinVedomostiThe St. Petersburg budget could lose about 20 billion rubles in taxes from Gazprom Neft if the company selects a site for its office complex in another region of Russia after the controversial Okhta Center skyscraper plan was scrapped.

The subsidiary oil firm of state gas behemoth Gazprom pays about 25 billion rubles ($836 million) every year in taxes to the city budget, said Sergei Kupriyanov, a representative of Gazprom. In 2008, the company’s press service said it paid 21 billion rubles in taxes.

The company was registered as a taxpayer in St. Petersburg in the middle of 2006. Now the city could lose a major source of revenue, fears one senior City Hall official. At the beginning of December, St. Petersburg Governor Valentina Matviyenko reversed her earlier decision permitting the construction of a 400-meter tall business center across the Neva River from Smolny Cathedral that would house the company’s headquarters.

Gazprom Neft will pay taxes to the region in which its new office and business center is constructed, said Kupriyanov.

The administration of the Leningrad Oblast weighed into the fight for Gazprom Neft’s tax contributions at the end of last year, offering the company four plots of land of 30 to 40 hectares for the construction of its office and business center. The plots are located in Utkina Zavod, Kudrovo, Veryovo (in the Gatchinsky district) and in Novoye Devyatkino.

According to Gazprom’s press service, the company is interested in the plot of land near Kudrovo at the intersection of the ring road and Murmanskoye Shosse. The location is convenient in terms of transport access and infrastructure, the company said via its press service, adding that it was too soon to speak of a final decision. The north of St. Petersburg, for example Ulitsa Savushkina, is potentially interesting for the company, but the company has not yet received any proposals from the city authorities, it said.

City Hall is in the process of selecting a plot, said the press secretary of Deputy Governor Roman Filimonov.

Kudrovo is not a bad location; it is removed from the business districts and city center, but the interchange with the ring road would make it possible for a fairly large business zone to exist there, said Zosya Zakharova, head of the projects and analytical research department at ARIN, the property research and development agency. Ulitsa Savushkina, on the other hand, is already plagued by traffic jams, and would grind to a complete standstill with the appearance of such a major project in its vicinity, the expert said.

There are many vacant land plots on the outskirts of St. Petersburg that could be redeveloped, but major preparatory work would be required, Zakharova added.

The arrival and departure of a major tax contributor cannot take place without the involvement of the federal center and administrative resources, said Alexander Khodachek, branch director of the State Graduate School of Economics. Gazprom Neft re-registered in St. Petersburg not for the purpose of building the skyscraper, but in order to be nearer to the developing export points of raw hydrocarbon materials in Primorsk and Ust-Luga, he said.

The 2011 revenue of the LenOblast budget is 48 billion rubles ($1.6 billion), while Petersburg has 351 billion rubles. “Easy” revenue — which comes from tax payments by large companies instead of from the creation of new production facilities — can be lost just as easily, and the city authorities should always be prepared for such a risk, said Khodachek.

Serbia: Gazprom Neft to buy 19% more shares in Naftna Industrija Srbije (NIS)http://www.balkans.com/open-news.php?uniquenumber=89770

RIA Novosti - 19.01.2011Gazprom Neft representatives elected NIS board chairman, CEO Serbian minister to talk economy, financial aid in Moscow Russia's Gazprom Neft, the oil arm of gas giant Gazprom, plans to buy 19.12% in Serbia's Naftna Industrija Srbije (NIS) oil firm, in which it already owns 51%, at 4.8 euros per share, NIS said on Monday. "The offer was made as part of obligations the company (Gazprom Neft) accepted when becoming a NIS shareholder," a Gazprom Neft spokesperson told RIA Novosti news agency. bne.

Oil extraction at Prirazlomnoye by Q4 2011http://barentsnova.com/node/811

Jan 19 2011

Gazprom is planning to launch Prirazlomnoye gas extraction in Q4, 2011, informs rbc with a reference to the Gazprom's corporate magazine.

Prirazlomnaya platform was delivered to Murmansk in late November 2010. In the beginning of spring 2011, concreting will be performed. By the end of June-early July, the platform will start its way to the offshore field in the Pechora Sea after the ice is gone.

Discovered in 1989, Prirazlomnoye field is located on the shelf of the Pechora Sea, 60 km away off the shore. The field is 72 mln tons rich in oil deposits (apprx 6,6 mln tons to be extracted annually). The sea depth at spot is 19-20 metres. The license for Prirazlomnoye development is owned by Gazprom Neft Shelf (100% daughter of Gazprom).