Russia 100412

Basic Political Developments RIA: Iran boosts air defenses with new missile system - Russian defense industry

officials have repeatedly said that Russia is interested in fulfilling the contract, which is worth hundreds of millions of dollars, but the future of the contract would largely depend on the current situation in international affairs and the Kremlin's position.

RIA: Russian firm joins world's Top 20 arms producers - Almaz-Antei is one of Russia's largest air defense manufacturers, specializing in production of small, medium and long-range air defense systems, including the S-300 Favorit and S-400 Triumf systems.

RIA: Japan seeks larger role in economy of Russia's Far East - Japan's government and Japanese businesses are interested in cooperation and investment in Russia's Far East, Tokyo's ambassador to Russia Masaharu Kono said on Monday.

RIA: Russian president departs on American tour (WRAPUP) - Russian President Dmitry Medvedev will depart on Monday on a five-day visit to North and South America to attend two international summits and discuss bilateral ties with Argentina.

Itar-Tass: Medvedev to start five-day American tour on Monday - Medvedev will attend the Nuclear Security Summit in Washington DC on April 12-13, pay an official visit and hold negotiations with the Argentinean president in Buenos Aires on April 14, and discuss cooperation with colleagues from the BRIC Group (Brazil, Russia, India and China) on April 15-16.

Moscow Times: BRIC Leaders to Discuss Expansion of Trade Currencies - "Trade in national currencies will be on the agenda of BRIC leaders," Arkady Dvorkovich, President Dmitry Medvedev's top economic adviser, told reporters Friday.

RIA: Global nuclear security demands effective national systems - Kremlin aide - Global nuclear security can only be ensured if "all states have effective national [nuclear security] systems", a Russian presidential aide said Sunday. Sergei Prikhodko, who spoke shortly before the April 12-13 nuclear security summit in Washington, D.C., said Russia maintains its nuclear security at a proper level.

Washington Post: Russia cast as nuclear security leader despite flaws New Europe: US, Russia’s new world order RIA: Russian judge shot dead in Moscow - Chuvashov heard the trial of the

"White Wolves" skinhead group in Moscow City Court, sentencing nine gang members to up to 23 years in prison in February. He also worked on the case of the Federal Drug Control Service officer Alexander Bulbov, who was accused of embezzling $3.2 million and released on bail in November 2009 after 25 months in pre-trial detention.

Interfax: Investigators believe Moscow court judge could have been murdered by nationalists – source (Part 2)

Interfax: Murdered Moscow judge handled felony cases, including case of Ryno gang

RIA: New law allows fugitive businessman Gutseriyev to return to Russia - A new business law will allow fugitive Russian businessman Mikhail Gutseriyev, the former head of oil firm RussNeft, to return to Russia, a business daily reported on Monday.

African Press Agency: Russia-Uganda- Arms deal controversy  Barentsnova: Kirkenes: meeting of Russian and Norwegian state comptrollers Arab Times: Dubai court jails two over Chechen warlord murder RIA: Dubai court jails Tajik, Iranian over Chechen army officer murder In the Stavropol region are looking for intruders that robbed the Assistant to the

President of Chechnya on 7 million rubles - source Russia Today: Police hunt Moscow Metro bomber's husband in southern Russia RIA: Three police officers killed in clash in Russia's North Caucasus Novinite: 3 Russian Officers Killed by Extremists in Dagestan ABNA.ir: The Wave of Islamophobia Spared The Perm Region – Russia ABNA.ir: Islamophobia Countinues: The Moscow Police Are Afraid of Girls

Wearing Head Scarves Russia Profile Weekly Experts Panel: the Right Response to Terrorism - The

suicide bombings of Moscow’s metro last week sparked an impassioned public debate about how best to deal with domestic terrorism. While some politicians and commentators called for draconian counter measures, including mass-finger printing and the return of the death penalty, other sections of the press fretted that the government might use the attacks to justify a crack-down on civil liberties. President Dmitry Medvedev himself mixed talk of “destroying” terrorists with an emphasis on the need for economic and social modernization of the North Caucasus. What is the right response to terrorism? Are fears of a political crackdown in Russia misplaced? Will Medvedev continue on the path of modernization, including modernizing the security services? Or will he succumb to the temptation of a political crackdown to bolster his electoral position with a “tough guy” image?

Moscow Times: Moscow Officials Walk Out Over Luzhkov Gibe - Two top Moscow government officials stormed out of a hearing Friday at the Public Chamber during a heated debate over the future of City Hall’s long-term development plan.

KYRGYZSTANo RIA: Kyrgyzstan hopes to get more than $150 million aid from Russiao Reuters: Kyrgyz interim govt says Russia to give aid o 24.kg: Russia to provide real support of investment projects in Kyrgyzstan o Zeenews: Special operation against ousted Kyrgyz President?o Apa.az: STRATFOR: The new government in Kyrgyzstan is loyal to

Moscow, which means that the negotiations over the use of Manas military base have nothing to do with Bishkek - “The challenges that the new government of Kyrgyzstan will face are really difficult to fix easily”, - STRATFOR’s expert Marco Papic said in an interview with APA’s Washington correspondent on April 11th.Washington Post: Russia blamed for fueling unrest in Kyrgyzstan

POLISH PLANE CRASH

o RIA: Russia builds road to remove wreckage of Polish president's planeo Russia Today: Russia mourns for Poles killed in plane crash near

Smolensko RIA: Forensic tests on Polish plane crash victims "complete"o RIA: Search for body parts continues at Kaczynski's plane crash siteo Interfax: Patriarch Kirill and Patriarch Theodore mourn over people killed

in Smolensk air crasho Focus: Russian press on Smolensk plane crash (ROUNDUP) o The News: Ombudsman’s body identified - The body of the Ombudsman

Janusz Kochanowski, one of many of Poland’s prominent politicians who died in the plane crash in Smolensk on Saturday, has been formally identified.

o Bloomberg: Solidarity ‘Godmother’ Walentynowicz Dies in Katyn Plane Crash

o Wall Street Journal: Clues Sought in Crash of Polish Plane - Many Russian Jets Lack Safety Equipment Common on Western Commercial Aircraft; No Engine Problems Reported

Moscow Times: Guilt by Association - The month of March ended very badly for Russia, and the worst is yet to come.

Moscow Times: Medvedev Delivers Putin’s Brainchild - Some guests at the Friday ceremony, which brought together bankers, executives from partner companies and officials from the European countries involved, exchanged baffled comments about why Putin might have shied away.

Apa.az: Ukraine, Russia to start actual work on border demarcation in 2010 Moscow Times: Putin Discusses $6Bln Loan to Ukraine for Reactors Russia Today: 12 April, 2010 in Russian Newspapers

o Izvestiya: A nuclear-free spring, American-styleo Trud: All pilots served in the military - Trud learned who the pilots of

Polish aircraft №1 were, as well as what security measures were present on board Kaczynski’s presidential plane.

Moscow Times: Today in Vedomostio Transneft Could Issue IPO o President, Ministers to Publish Income Statements o Paying for Credit - The Central Bank believes that companies distort their

financial statements and is encouraging them to post their statements on the FTS’s web site. Businesses do not like the idea.

o Editorial: Russia and Poland at turning point Reuters: PRESS DIGEST - Russia - April 12

o KOMMERSANTo People in Moscow mourn the Polish president's delegation who died in an

airplane crash near Smolensk on Saturday, the paper writes. o The paper runs an interview with the deputy head of the Kyrgyz interim

government, who says Kyrgyzstan has $50 million in the treasury. o Ukrainian Prime Minister Nikolai Azarov asks Russia for a $4 billion

discount on gas prices in 2010, the daily says.

o VEDOMOSTIo Russia's air carrier Aeroflot may earn an extra 10-15 percent on summer

tourist flights, the daily writes. o Wal-Mart is still interested in acquiring a stake in Russian hypermarket

chain Lenta from the investment fund TPG, the paper says. o Insurance companies in Russia raised prices for medical insurance by up

to 50 percent in 2010, the paper reports. o VREMYA NOVOSTEIo Gazprom's CEO Alexei Miller will hold talks with the CEO of Italy's oil

and gas group Eni Paolo Scaroni on Monday, the paper writes. o ROSSIISKAYA GAZETAo Russia's Foreign Minister Sergei Lavrov has proposed suspending the

adoption of Russian children by Americans until an agreement on adoption is signed, the daily says.

BBC: Ice skating funding melts away in Russia - It is just four years until Russia hosts the Winter Olympics in Sochi, but already questions are being asked about funding issues.

National Economic Trends Interfax: Russian govt to consider main 2011-2013 tax avenues RBC: Gov't to consider changes to tax policy Reuters: Russian rouble hit new highs as c.bank shifts boundary Cbonds: Russian Finance Ministry: budget deficit totals Rub 307.6 bln in Q1 Bloomberg: Russian Second-Quarter Growth Outlook Raised to 8.3% by RenCap Cbonds: Eurobonds offered by Russian issuers reach nearly $8 bln Moscow Times: Federal Spending Increases While Strong Ruble Causes Concern Moscow Times: Central Bank Head Positive on 2010 Outlook

Business, Energy or Environmental regulations or discussions Russian markets -- Factors to Watch on April 12 Bloomberg: Russia Stocks Gain Second Day as Greece Bailout Boosts Oil Bloomberg: Gazprom, TMK, Razgulay Group: Russian Equity Market Preview UPDATE 1-Globaltrans sees recovery after 2009 profit fall Diamond Intelligence: ALROSA MAY SUPPLY AT LEAST $1.4 BILLION

WORTH OF ROUGH TO RUSSIAN DIAMOND MANUFACTURERS THROUGH 2012

Bloomberg: Rusal Returns to Profit on Norilsk Stake, Price Gain (Update2) Reuters: UPDATE 1-UC RUSAL 2009 swings to profit, sees strong 2010 Steel Orbis: NLMK incorporates Berezovsky Electrometallurgical Plant within

NSMMZ Financial Times: TeliaSonera's plans for Russian telecoms group at risk Reuters: UPDATE 1-Russia's Magnit sales soar in March on new shops Moscow Times: For the Record

o Qatari Energy Minister Abdullah bin Hamad al-Attiyah met with Deputy Prime Minister Igor Sechin to “coordinate” before the Gas Exporting

Countries Forum later this month, the state-owned Qatar News Agency reported Friday. (Bloomberg)

o Russian seaports handled 123 million tons of cargo in the first quarter, an increase of 11 percent from the year-earlier period, with exports rising 13 percent to 96.6 million tons, the Association of Commercial Seaports said Friday. (Bloomberg)

o Russian banks will have 180 billion rubles ($6 billion) set aside for bad loans by the middle of the year, compared with 220 billion rubles at the start of 2010, Central Bank First Deputy Chairman Gennady Melikyan told reporters Friday. (Bloomberg)

o Russneft founder Mikhail Gutseriyev will likely return to Russia in the coming weeks, Vedomosti reported Friday. (Bloomberg)

o The Association of South East Asian Nations may invite the United States and Russia to a summit of Asia’s largest economies in October as members struggle to forge an effective economic partnership, Indonesia’s foreign minister said Friday. (Bloomberg)

o Pharmacy chain 36.6 swung to a net loss of 229 million rubles ($7.8 million) in the third quarter, compared with profit of 77.5 million rubles a year earlier, after sales slumped, the company said Friday. (Bloomberg)

o Baby food maker Nutritek said late Thursday that it was urgently seeking ways to escape bankruptcy and has postponed its secondary share placement while it works on a plan. (Reuters)

o TNK-BP said Friday that its exploration budget would reach $400 million this year. (Bloomberg)

o Venezuelan President Hugo Chavez called U.S. officials “stupid” on Thursday for criticizing his arms purchases from Russia and said he would keep buying weapons until the country is ready to defend itself. (Reuters)

o Norilsk Nickel is exploring the sale of Stillwater Mining, a Montana platinum and palladium miner, after prices for the precious metals rebounded sharply in recent months. (AP)

Businessneweurope: Russia is a private equity desert - The Kremlin has started a big push to modernise the Russian economy, but while in the West anyone with a really good idea and a bit of development under the belt can usually find cash to continue, in Russia the nascent private equity business has been given a bloody nose and will take years to recover.

Activity in the Oil and Gas sector (including regulatory) RBC: Russia likely to hike up oil export duty - Russia's oil export duty is likely to

climb $15 or 5.6 percent to $281-284 per tonne starting May 1, 2010, head of the Finance Ministry's analytical department Alexander Sakovich told journalists today.

Oil and Gas Eurasia: Sakhalin Exports Over 3.5 Million Tons of Crude in 1Q Bloomberg: Transneft Investors Urge Share Sale to Fund Pipe, Vedomosti Says RBC: Transneft minority shareholders call for IPO Oil and Gas Eurasia: NOVATEK Courts Qatar For Yamal-LPG Project Oil and Gas Eurasia: TNK-BP To Increase Exploration Drilling 37 Percent

Ukrainian News: Russian-British TNK-BP Interested In Development Of Ukrainian Black Sea Shelf

Your Oil and Gas News: The Yamal Asset of TNK-BP Is Developing Unique Fields of Yamal and the Krasnoyarsk Territory

Gazprom Bloomberg: Gazprom Raises Gas Output Target on European Demand (Update1) Power-Gen Worldwide: Belarus ready to consider selling control of gas pipelines

to Gazprom AFP: Italy's Eni blocking South Stream progress: Gazprom Today’s Zaman: Gazprom-SOCAR gas deal: Should Azerbaijan commit to a

long-term contract? GL Group: Will Nord Stream debut in 2011 cause major EU foreign policy shift? New Europe: Door ajar for Gazprom to have power over Ukrainian pipelines BarentsObserver: Shtokman symphony - The ”Shtokman symphony” is written in

honor of the world’s largest offshore natural gas field located some 600 kilometers north of the Kola Peninsula in the Russian part of the Barents Sea.

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

Full Text Articles

Basic Political Developments

RIA: Iran boosts air defenses with new missile systemhttp://en.rian.ru/world/20100412/158529509.html

00:4212/04/2010

Iran has developed and successfully tested its first domestically-built air defense system capable of destroying aircraft at low and medium altitudes, Press TV cited the country's defense minister as saying.

Ahmad Vahidi announced on Sunday that the new system, dubbed Mersad (Ambush), is equipped with a sophisticated radar, an advanced launcher, and modern guidance and target acquisition electronics.

"The system is highly dynamic, capable of combat in electronic warfare and can be linked with other radar and air defense systems," Vahidi said.

According to the minister, the Mersad system will incorporate Iran's domestically manufactured Shahin missile, which is an upgraded version of the U.S.-made Hawk missile supplied to Iran in the 1970s.

"Its [the Shahin's] production has begun and a sizeable number will be delivered to the armed forces this year," Vahidi said.

The minister did not specify the effective range of the new system, but the Hawk missile has a range of 15 miles.

The development of an advanced air defense system could mean that Tehran has achieved a significant level of self-sufficiency in protecting its nuclear facilities from potential airstrikes.

Both the United States and Israel have not ruled out military action if diplomacy fails to resolve the dispute over Iran's controversial nuclear program.

Iran laid hopes in the past on Russian-made air defense systems, including the S-300, but the delay in the implementation of the 2005 contract on the delivery of at least five S-300 systems has apparently forced Tehran to expedite its own missile development.

Russian defense industry officials have repeatedly said that Russia is interested in fulfilling the contract, which is worth hundreds of millions of dollars, but the future of the contract would largely depend on the current situation in international affairs and the Kremlin's position.

MOSCOW, April 12 (RIA Novosti)

RIA: Russian firm joins world's Top 20 arms producershttp://en.rian.ru/world/20100412/158530708.html

03:4012/04/2010

Russia's Almaz-Antei company has moved to 18th place on the global list of Top 100 defense firms compiled by a respected Swedish think tank.

According to the SIPRI Yearbook 2010, released by the Stockholm International Peace Research Institute, Almaz-Antei sold $4.3 billion-worth of weaponry in 2008.

Almaz-Antei is one of Russia's largest air defense manufacturers, specializing in production of small, medium and long-range air defense systems, including the S-300 Favorit and S-400 Triumf systems.

The S-400 Triumf (SA-21 Growler) is designed to intercept and effectively engage airborne targets including stealth aircraft, and cruise and ballistic missiles at ranges of up to 3,500 kilometers (2,200 miles) and speeds of up to 4.8 kilometers (3 miles) a second.

Almaz Antei has recently announced that it is currently developing six new types of air defense/missile defense systems, including the fifth-generation S-500 air defense complex, which is expected to enter production in 2012.

The SIPRI Yearbook includes reports detailing research into international security, armaments and disarmament, major armed conflicts and multilateral peacekeeping operations, and is highly valued and respected by military experts worldwide.

STOKHOLM, April 12 (RIA Novosti)

RIA: Japan seeks larger role in economy of Russia's Far East http://en.rian.ru/business/20100412/158536147.html

12:3812/04/2010VLADIVOSTOK, April 12 (RIA Novosti) - Japan's government and Japanese businesses are interested in cooperation and investment in Russia's Far East, Tokyo's ambassador to Russia Masaharu Kono said on Monday.

The ambassador met in Khabarovsk with the Russian president's envoy to the Far Eastern Federal District, Viktor Ishayev.

"The Far East is the Russian region closest to Japan," Kono told Ishayev, according to Ishayev's press service. "Japan's government and businesses are interested in cooperation with Russian Far East."

"Our economies are complementary. Keeping in mind that Japan has high technologies, we must cooperate," Ishayev was quoted as saying.

The presidential envoy identified container transport, aviation, the oil and gas sector and tourism, as well as the building of a spaceport, as the main areas of potential Russian-Japanese cooperation in the Far East, a press service representative said.

Ishayev said the Far Eastern Advisory Council on Business Development would assist Japanese businessmen interested in launching new enterprises in the region, the spokesman added.

The meeting was held in advance of Ishayev's visit to Japan at the end of the month, when he will acquaint Japanese businessman with the largest investment projects in the Far East and hold a series of negotiations.

"I am sure we will have serious and constructive dialogue in Japan," Ishayev said.

RIA: Russian president departs on American tour (WRAPUP)http://en.rian.ru/russia/20100412/158532101.html

07:0012/04/2010

Russian President Dmitry Medvedev will depart on Monday on a five-day visit to North and South America to attend two international summits and discuss bilateral ties with Argentina.

NUCLEAR SECURITY SUMMIT IN WASHINGTON

On the first leg of his tour, President Medvedev will attend a nuclear security summit in Washington on April 12-13.

The two-day global conference on nuclear security will focus on the vulnerability of stockpiles of nuclear materials and securing them against the threat of terrorist acquisition.

During the 47-nation summit, world leaders are expected to make concrete commitments to ensure that their national stocks of separated plutonium and enriched uranium are not at risk of being stolen, smuggled or sold to terrorists.

The U.S. summit comes after the signing last week of a new strategic arms reduction treaty by Medvedev and his U.S. counterpart Barack Obama in Prague.

FIRST OFFICIAL VISIT TO ARGENTINA

The Russian president will visit Argentina on April 14 for the first time in the history of diplomatic relations between the two countries.

In Argentina, Medvedev will meet with the country's president Cristina Fernandez de Kirchner and other top officials to discuss the development of bilateral relations in the sphere of energy and high-technology.

The sides are expected to issue a joint statement and sign a number of documents, including an intergovernmental agreement on cooperation in culture and education.

Trade between Russia and Argentina has risen fivefold since 2003, reaching almost $2 billion in 2008, but fell to $1.35 last year mainly due to the global financial crisis.

BRIC SUMMIT IN BRAZIL

on April 15-16, the president will take part in the BRIC (Brazil, Russia, India and China) summit in the Brazilian capital Brasilia along with Brazilian President Lula da Silva, Indian Prime Minister Manmohan Singh and Chinese President Hu Jintao.

The meeting will focus on improving the current global economic situation and strengthening cooperation between the four countries.

The BRIC group is also expected to agree on a common stance for the G20 meeting in Washington, which will take place in late April.

The leaders will also discuss the outcome of the nuclear security summit in Washington and the new nuclear arms reduction treaty signed by the Russian and U.S. presidents in Prague.

The first BRIC summit was held in the Russian Urals town of Yekaterinburg in June, 2009. The leaders issued a declaration calling for the establishment of a multi-polar world order.

MOSCOW, April 12 (RIA Novosti)

Itar-Tass: Medvedev to start five-day American tour on Monday

http://www.itar-tass.com/eng/level2.html?NewsID=15013284

11.04.2010, 21.15

MOSCOW, April 11 (Itar-Tass) -- President Dmitry Medvedev starts a five-day American tour on Monday. He will visit the United States, Argentina and Brazil.

Medvedev will attend the Nuclear Security Summit in Washington DC on April 12-13, pay an official visit and hold negotiations with the Argentinean president in Buenos Aires on April 14, and discuss cooperation with colleagues from the BRIC Group (Brazil, Russia, India and China) on April 15-16.

“Heads of the delegations to the Washington summit will share a dinner and discuss the threat of nuclear terrorism on April 12,” presidential aide Sergei Prikhodko said. “There will be two meetings and a lunch for delegation heads on April 13. The interlocutors will discuss national and international efforts in the provision of nuclear security and the role of the International Atomic Energy Agency (IAEA) in the provision of physical protection of nuclear material. The media will have no access to the meetings.”

“The summit will post a communique and an action plan. Each member country will release a national nuclear security memorandum, and the memoranda will be published on the summit website,” he said.

“Russia initiated the first nuclear security forum in the G-8 format, and the forum took place in Moscow in April 1996,” Prikhodko said. This time, the United States invited chiefs of state and prime ministers of 45 countries and heads of four international organizations to the summit.

Medvedev will pay the first official visit to Argentina on Wednesday. He will hold negotiations with President Cristina Fernandez de Kirchner and sign a number of bilateral documents. “The visit is particularly important because it takes place in the year of the 200th anniversary of Argentinean statehood and the 125th anniversary of bilateral diplomatic relations,” Prikhodko said.

The president will come to Brazil on Thursday for the second BRIC summit. The first summit took place in Yekaterinburg, Russia, on June 16, 2009. The summit will start with a dinner attended by Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao, Brazilian President Luiz Inacio Lula da Silva and South African President Jacob Zuma. The latter will be visiting Brazil to attend a summit of the IBSA Group (India, Brazil and South Africa). The participation of Zuma in the dinner does not mean the enlargement of the BRIC Group.

BRIC members will have negotiations and give a press conference on Friday.

Medvedev may have bilateral meetings on the sidelines of the Washington and BRIC summits, Prikhodko said. For instance, he will meet with Spanish Prime Minister Jose Luis Rodriguez Zapatero in Washington DC on Tuesday and with Chinese President Hu Jintao in Brasilia on Thursday.

There will be no meeting with Georgian President Mikhail Saakashvili, who plans to attend the Washington summit, because Russia and Georgia do not have diplomatic relations, Prikhodko said.

Moscow Times: BRIC Leaders to Discuss Expansion of Trade Currencies http://www.themoscowtimes.com/business/article/bric-leaders-to-discuss-expansion-of-trade-currencies/403699.html

12 April 2010Combined Reports

The leaders of Brazil, Russia, India and China will discuss broadening the array of world currencies used in international trade at their summit Friday as they seek to lessen their dependence on the dollar.

"Trade in national currencies will be on the agenda of BRIC leaders," Arkady Dvorkovich, President Dmitry Medvedev's top economic adviser, told reporters Friday.

The leaders will also discuss using special drawing rights from the International Monetary Fund for trade, he said.

"We continue to think that this instrument has good potential, although our G8 partners have not agreed with this yet," Dvorkovich said, referring to SDRs. "Our BRIC partners, including China, support us more in this. It is possible we will discuss a common position."

Medvedev and his fellow BRIC leaders will meet in Brasilia on Friday for their second summit. At their first conference in Yekaterinburg in June, the leaders called for emerging economies to have a greater voice in international financial institutions and for a more diversified global monetary system.

Russia has regularly sought to promote regional currencies in trade and diversify its reserves, the world's third-largest stockpile, to reduce risks posed by the dollar's dominance. Medvedev last year questioned the dollar's future as a reserve currency and called for a mix of regional currencies to make the world economy more stable. He said a new supranational currency could reduce vulnerability to movements in the dollar.

China is also seeking greater use of its currency to reduce reliance on the dollar after Premier Wen Jiabao said last month that he was "worried" about holdings of dollar-denominated assets.

Plans to consider allowing the yuan to trade against the ruble will not increase the currency's volatility because the Central Bank would limit fluctuations, Dvorkovich said. "We do not see a danger here," he added.

Beijing has faced criticism, in particular from the United States, for keeping the yuan artificially low, but Dvorkovich said it was not their place to interfere.

"This is part of China's sovereign policy, and there couldn't be any international decision on this issue," he said.

The BRIC summit may help consolidate the four countries' positions on issues including reform and regulation of financial institutions and coordination of macroeconomic policies.

"We see that the role of BRIC is to guarantee timely solutions to these issues," Dvorkovich said.

Russia and Brazil will separately discuss cooperation in aerospace, energy, telecommunications and agriculture, he said.

Trade between the countries fell 32 percent last year to $4.6 billion, according to the Economic Development Ministry.

Before going to Brazil, Medvedev will visit Argentina on Wednesday and Thursday to meet with his counterpart Cristina Fernandez de Kirchner and the country's business community, Dvorkovich said.

"The potential of Argentine companies is underused in Russia, and there are possibilities to expand investment and cooperation in trade," Dvorkovich said. "Unfortunately, apart from Argentine restaurants in Moscow, I don't know of anything else."

Russia could offer Argentina its expertise in hydroelectric energy, he said.

"A considerable part of Argentina's hydro energy system works on Russian equipment," Dvorkovich said.

Trade between Russia and Argentina fell to $1.35 billion last year from almost $2 billion a year earlier, according to the Economic Development Ministry.

(Bloomberg, Reuters)

RIA: Global nuclear security demands effective national systems - Kremlin aidehttp://en.rian.ru/russia/20100411/158528472.html

23:1311/04/2010

Global nuclear security can only be ensured if "all states have effective national [nuclear security] systems", a Russian presidential aide said Sunday.

Sergei Prikhodko, who spoke shortly before the April 12-13 nuclear security summit in Washington, D.C., said Russia maintains its nuclear security at a proper level.

"All nuclear materials and installations on Russian territory are reliably protected," he told journalists.

The U.S. summit, bringing together almost 40 heads of state, will focus mainly on the vulnerability of nuclear materials and securing them against the threat of terrorist acquisition.

The summit comes after the signing on Thursday of a new strategic arms reduction treaty by U.S. President Barack Obama and Russian President Dmitry Medvedev in Prague.

The document that replaced the START 1 treaty, which expired in December 2009, is expected to bring Moscow and Washington to a new level of cooperation in the areas of nuclear disarmament and arms control.

The new strategic arms pact stipulates that the number of nuclear warheads is to be reduced to 1,550 on each side, while the number of deployed and non-deployed delivery vehicles must not exceed 800 on each side.

Under the deal, which will be valid for 10 years unless superseded by another agreement, strategic offensive weapons will not be based on the territory of any third country.

MOSCOW, April 11 (RIA Novosti)

Washington Post: Russia cast as nuclear security leader despite flawshttp://www.washingtonpost.com/wp-dyn/content/article/2010/04/11/AR2010041102963_pf.html

By Steve GuttermanReutersSunday, April 11, 2010; 6:16 PM

WASHINGTON (Reuters) - The nuclear security summit starting on Monday is a chance for Russia to promote itself as a global leader on the crucial issue, but experts say Moscow must do more to safeguard its own big stocks of bomb ingredients.

Almost two decades after the Soviet collapse spawned nightmares about the seizure of nuclear materials from poorly guarded facilities or theft by desperate employees, Russia says its nuclear materials are reliably protected.

It has recast itself as a champion of nuclear security worldwide, initiating an international treaty against nuclear terrorism that came into force in 2007 and joining the United States in creating a global grouping to set strategies.

Following last week's signing of a nuclear arms reduction treaty with President Barack Obama, the summit gives Russian President Dmitry Medvedev another chance to portray his country as a linchpin of international security.

"Russia wants to be seen as a leader, with the U.S. and other countries, of the global effort to prevent nuclear terrorism," said Matthew Bunn, a nuclear expert at Harvard University. "And they are a leader, in important ways."

But despite dramatic improvements in the protection of Russia's nuclear materials, funded in large part by billions of dollars in U.S. assistance, experts say threats remain.

"To say this problem was left behind in the 1990s would be wrong," said Vladimir Chuprov, Greenpeace Russia's energy projects chief. "Russia remains a risk zone in terms of the physical security and physical protection of nuclear materials."

The most glaring gaps have been fixed, vastly reducing the chances of a break-in at one of the 235 buildings across Russia where highly enriched uranium or plutonium separated from spent fuel are kept. There are also more than 100 weapons-related sites, including temporary areas such as rail transfer buildings.

INSIDER THEFT

"You don't have gaping holes in fences anymore," Bunn said, or "no detector at all to set off an alarm if someone is carrying plutonium out in their suitcase."

But the potential for theft by insiders -- who have been involved in all explained thefts of highly enriched uranium or plutonium -- is still a concern, particularly in a country where corruption is widespread.

Imperfect accounting for nuclear materials is a related weakness, he said, and some materials are protected with "wax or lead seals that are pretty much the same technology Louis XIV was using to seal his letters."

Many sites are guarded by inexperienced and poorly paid Interior Ministry conscripts, and official complacency is also a potential problem.

"One key question is whether the Russian government will really assign the resources needed to sustain the security measures that have been put in place for the long haul," Bunn said.

Like the 'New START' treaty Medvedev and Obama signed on Thursday, joint efforts to improve nuclear security showcase cooperation between the Cold War foes in tackling the threatening legacy of their nuclear arms race.

Iran's defiant nuclear program is not a focus of the summit but will likely be discussed on the sidelines. Russia has signaled it could support new sanctions against Tehran but would not back measures it considers misdirected or overly harsh.

(Editing by Philip Barbara)

New Europe: US, Russia’s new world order

http://www.neurope.eu/articles/US-Russias-new-world-order/100084.php

Author: Kostis Geropoulos11 April 2010 - Issue : 880

The signing of a new US-Russian nuclear arms control treaty by US President Barack Obama and his Russian counterpart Dmitry Medvedev on April 8 in Prague marks a new phase in warmer ties between Washington and Moscow, taking into account each other’s spheres of influence and setting a tone for other countries that possess nuclear weapons or have nuclear intentions.“There is no question that the signature of this treaty is a very tangible and important step forward,” James Collins, who was the US ambassador to Russia from 1997 to 2001 and is now at the Carnegie Endowment for International Peace, told New Europe on April 8 by phone from Washington DC. “It certainly is going to strengthen the view that we are working together on nuclear matters whether it is strategic arms or proliferation.”Chris Weafer, chief strategist at Moscow’s UralSib bank, told New Europe by phone from London on 8 April that with the Obama and Medvedev administration it definitely seems that US-Russia relations have moved into a new phase. “The relationship between the US and Moscow is substantially better and moving forward towards cooperation and recognizing both countries’ areas of special interest or privileged interest as Medvedev calls Central Asia and cooperating rather than competing. This is very much the new order,” Weafer said.However, Russian Foreign Minister Sergei Lavrov warned earlier last week that Moscow reserves the right to withdraw if the Obama administration’s planned US missile defense system for Europe grows into a threat. And the US could still use nuclear weapons against non-nuclear states and nuclear weapons will remain in Europe. “Both sides have to be fairly careful because there are relatively conservative elements or hawkish elements on both sides so neither government or neither administration can push ahead too aggressively in case there is a backlash against them at home. It is a case of one careful step at a time and it would not surprise me that Lavrov would make these comments. But I would see that for domestic consumption,” Weafer said.A withdrawal clause in the New START Treaty is nothing unusual, Collis told New Europe, adding that it would be the Russians’ right to withdraw from the treaty if they determined that whatever the US did on missile defense or some other way threatened Russian national security. And the same would be true for the United States if it was found that there were actions by the Russians side under this treaty that threatened national security, Collis said, adding that missile defense remains a very major issue for the Russian side. “The relation between offence and defense is certainly going to be a component of whatever negotiation on arms control comes on the next phase,” Collins said.The signing came about a year after Obama laid out his vision of a nuclear-free world at the Prague Castle. “Today is an important milestone for nuclear security and non-proliferation, and for US-Russia relations,” Obama said at a joint press conference, while Medvedev called the agreement a “win-win situation” and the ceremony a “truly historic

event.”Obama said the treaty was a step towards a goal that may not be achieved in his lifetime. “One of the steps that I called for last year was the realization of this treaty, so I am glad to be back in Prague today,” he said. He said that Russia and the US, who hold over 90% of the world’s nuclear arms, intended to “show significant leadership” to the rest of the world in nuclear non-proliferation. They sealed the pact ahead of a high-level nuclear safety summit in Washington on 12-13 April and a five-yearly United Nations conference in May, which will evaluate adherence to the Nuclear Non-Proliferation Treaty (NPT).After the signing, Medvedev remarked that he and Obama had “established a very good personal chemistry” during the lengthy and tough negotiations. Some experts note that Russian Prime Minister Vladimir Putin appears to have taken a small back step during the negotiations. “Both Russia and the US are basically using the fact that both have kind of new, modern, younger leaders to forge this new phase of cooperation rather than competition,” Weafer said. However, Collins said that he doesn’t believe that there is a lot of difference on these issues between Putin and Medvedev. “They’re working in tandem. They’re working pretty closely on issues of this importance and this is how the American government has approached this - quite wisely,” Collins said. He noted that there has been less of the personalization of relations between the US and Russia during the Obama administration. “There is every effort to ensure that this is not a relationship that depends on the two men and to broaden the base of engagement across a wide base of areas,” he said. “Their relationship is a good one; it has been a productive one, but I also don’t believe that either of them is interested in making the relationship the centerpiece of what is getting accomplished,” he said, adding that both sides are trying to find a common ground on a practical basis.Weafer noted that compared to the Putin-Bush relationship, during the Obama-Medvedev relationship there is almost an understanding of each others’ spheres of influence. Russia has a better engagement with Hamas or places like Iran, Latin America and Cuba – that the US has a difficulty dealing with – and by working together both countries can maintain stability that suits both rather than trying to compete, Weafer said. “Rather than trying to derail Russia’s relationship with these countries, it seems as if Washington is now happier that Moscow has access to these countries and perhaps has influence in these countries and then, as long as the Moscow-Washington relationship is good, then to some extent the situation in Iran and with Hamas and Latin America and Cuba can be contained by Russia. The geopolitical process particularly between Russia and the US and their various spheres of influence is becoming a lot more streamlined and possibly a lot more efficient,” he said. The result is a more measured approach by both countries.Regarding Iran, for example, Russia is keeping the back channel open to Tehran, while considering a move towards some sanctions. “We and Russia are certainly closer than we used to be and have been in the past. I suspect this treaty certainly cannot not do anything but help in finding common ground,” Ambassador Collins said, reminding that negotiations are taking place in New York among the UN Security Council’s five permanent members plus Germany on possible new sanctions against Iran.

RIA: Russian judge shot dead in Moscowhttp://en.rian.ru/russia/20100412/158534295.html

10:2912/04/2010

Russian federal judge Edward Chuvashov was shot dead in downtown Moscow on Monday, a law-enforcement source told RIA Novosti.

"An unidentified person shot Chuvashov in the entrance to an apartment block and then fled," the source said, adding that investigators were working at the scene.

Chuvashov heard the trial of the "White Wolves" skinhead group in Moscow City Court, sentencing nine gang members to up to 23 years in prison in February.

He also worked on the case of the Federal Drug Control Service officer Alexander Bulbov, who was accused of embezzling $3.2 million and released on bail in November 2009 after 25 months in pre-trial detention.

MOSCOW, April 12 (RIA Novosti)

April 12, 2010 11:59

Interfax: Investigators believe Moscow court judge could have been murdered by nationalists – source (Part 2) http://www.interfax.com/newsinf.asp?id=157858

MOSCOW. April 12 (Interfax) - Investigators regard the main theory behind the murder of Moscow City Court judge Eduard Chuvashov with the involvement of members of radical nationalist groups, a source in law enforcement told Interfax.

Chuvashov was shot dead at about 9:30 a.m. in the stairway of his apartment building in the center of Moscow while he was leaving his apartment.

The Interfax source recalled that Chuvashov took part in trials of members of ultra-right groups charged with grave crimes and felonies.

The source said that Chuvashov always acted out of principle and brought severe sentences proceeding from the letter and spirit of the law.

Last February he sentenced 12 skinheads from the so-called White Wolves group to terms ranging from 6.5 to 23 years.

The source said that the judge was threatened many times and on web forums ultra-right organizations urged their supporters to do away with the judge.

In relation to the threats Chuvashov was even offered federal security services. However, he always refused the services of a bodyguard saying that law and justice protect him, the source said.

ml dp

April 12, 2010 10:58

Interfax: Murdered Moscow judge handled felony cases, including case of Ryno ganghttp://www.interfax.com/newsinf.asp?id=157838

MOSCOW. April 12 (Interfax) - Eduard Chuvashov, the judge of the Moscow City Court murdered in the center of Moscow on Monday, specialized in a handling grave crimes and felonies, press secretary of the court Anna Usachyova announced.

"He handled complex criminal cases as the crime judge of the Moscow City Court," she said to Interfax.

She confirmed that Chuvashov had brought the indictment in the high-profile case of the nationalist group led by Artur Ryno and Pavel Skachevsky.

ml dp

RIA: New law allows fugitive businessman Gutseriyev to return to Russiahttp://en.rian.ru/business/20100412/158535481.html

11:5512/04/2010

A new business law will allow fugitive Russian businessman Mikhail Gutseriyev, the former head of oil firm RussNeft, to return to Russia, a business daily reported on Monday.

On April 7, Russian President Dmitry Medvedev signed amendments to a number of legislative acts enhancing the legal protection of people involved in entrepreneurial activity, Vedomosti reported. Medvedev, who has a legal background, has vowed to improve the investment and business climate in the country.

The amendments scrap a clause on the violation of license terms from the articles on illegal entrepreneurship and illegal banking, a charge that the authorities used against Gutseriyev to accuse him of excess oil extraction, the paper said.

Gutseriyev resigned as RussNeft president and left Russia in 2007, citing "unprecedented pressure" from the Russian government. He was for a time on a police wanted list after he failed to appear for questioning on tax charges.

Some time later, tax charges against the businessman were lifted but Gutseriyev has until now been accused of illegal entrepreneurship, the paper said.

In January 2010, Gutseriyev closed a deal to regain control of RussNeft.

"Now nothing is stopping Gutseriyev returning to Russia. This is what he will do in the next few weeks," a person close to the businessman told Vedomosti.

MOSCOW, April 12 (RIA Novosti)

African Press Agency: Russia-Uganda- Arms deal controversy  http://www.apanews.net/apa.php?page=show_article_eng&id_article=122017

Controversy erupts in Uganda over arms deal with Russia  

APA-Moscow (Russia) A controversy has arisen among Ugandan government officials over a report published last week by Vedomosti, a reputable Russian business newspaper, that Rosoboronexport, the state arms exporter, has signed two contracts worth more than $1 billion for the supply of 16 Su-30 Flanker fighter jets to Algeria and six to Uganda, APA learns in Moscow on Sunday.

According to the newspaper’s source in the defense industry, Russia signed a contract with Uganda for six Su-30MK2 planes, worth approximately $200 million, in March. However, it is the first contract for heavy fighters signed by Uganda, which earlier considered buying the lighter MiG-29 jets.

Mikhail Barabanov, editor-in-chief of the Moscow Defense Brief magazine, commenting on the deal explained that "the change of decision is not surprising, as Uganda is considered a military superpower in sub-Saharan Africa."

The Russia’s state-owned radio, the Voice of Russia (VOR), also quoted a Moscow military-diplomatic source saying Uganda was planning to sign an agreement for the purchase of six Su-30 fighter planes and pay for them with oil money.

"Since Uganda is short of real money to pay for the planes, Russian LUKoil is negotiating its potential participation in developing large oil fields in Uganda, implying a possible swapping," the VOR radio reported.

The Ugandan government summoned Russia’s envoy to Kampala to protest against the Russian media reports that Uganda had bought fighter jets paid for by promises of crude oil. Defence Minister Crispus Kiyonga told Ugandan parliament last week in the wake of

the controversies surrounding the proposed deal that the government has communicated to Moscow asking for the press reports to be withdrawn or explained.

Meanwhile, the Member of Parliament for New Mbale Municipality, Jack Wamanga, a former diplomat who served in Moscow, said : "It’s rare for such a Russian publication to publish an article on such countries like Uganda. There must be something."

Mr. Guma Gumisiriza (Ibanda - NRM) also defended the government, arguing that the country’s security must be beefed up with modern technology. "If there are any purchases, it’s proper and befitting but certainly not using oil money because the oil is still in the ground," he said.

Earlier, Energy Minister Hillary Onek denied any knowledge of the oil-for-jets deal saying "That’s news to me. We have never had any such negotiations. As far as I know, we have not negotiated with any of the companies as reported."

Information Minister Kabakumba Masiko reassured the nation that the revenue from oil sales would be used for long-term infrastructure projects.

"One thing that should be clear is that oil money is not in any way going to be used for recurrent expenditure like those. It is only going to be used for solid permanent infrastructure like roads, energy, science and technology," she stressed.

  KKK/daj/APA 2010-04-11

Barentsnova: Kirkenes: meeting of Russian and Norwegian state comptrollershttp://barentsnova.com/news/show/1700

2010-04-12

Kirkenes: April 13, Russian Accounts Chamber meets Auditor General of Norway to discuss radiation security and environment protection.

The meeting of Sergey Stepashin and Jørgen Kosmo expects signing of a Memo on environmental cooperation. The meeting will also be participated by chairman of Murmansk regional Duma Evgeny Nikora, Evgeny Evstratov – deputy director general of Rosatom (state-owned corporation on atom energy), Vasily Omelchuk – director of OAO Concern Energoatom’s affiliate “Kolskaya Nuclear Station”, Sergey Agarkov – chairman of Murmansk Accounts Chamber, and other federal and regional officials.

Beside environmental talks, Sergey Stepashin and Jørgen Kosmo will lay wreaths to the monument in Dolina Slavy (Valley of Glory, Murmansk-Pechenga road 74-76 km, the place of fierce battle against Hitler’s troops in 1941) and to the monument to Soviet soldier in Kirkenes.

Arab Times: Dubai court jails two over Chechen warlord murder http://www.arabtimesonline.com/NewsDetails/tabid/96/smid/414/ArticleID/152274/reftab/149/t/Dubai-court-jails-two-over-Chechen-warlord-murder--/Default.aspx

DUBAI, April 12 (Reuters) - A Dubai court convicted two men on Monday of involvement in the 2009 assassination of Chechen military commander Sulim Yamadayev in Dubai, and handed them a life sentence.The men, Makhsood Jan Asmatov of Tajikistan and Iranian Mehdi Taqi Dahuria, were charged with aiding and abetting in the murder of Yamadayev, who was shot dead in the car park of a luxury seaside apartment block with a Russian-made handgun.Yamadayev fought against Russia in the first Chechen war of 1994-96 when Moscow suffered a humiliating defeat and had to pull out of the separatist southern province.But like some other leading rebels, he switched to the Russian side after then-President Vladimir Putin sent troops in 1999 to retake mainly Muslim Chechnya.Yamadayev became the commander of the Vostok battalion, a unit of battle-hardened former rebels which played a key role in subduing large-scale separatist resistance in Chechnya. In 2005 he was named a "Hero of Russia", the top national honour.Sulim Yamadayev, a foe of Chechen leader Ramzan Kadyrov, had challenged Kadyrov for control of local security forces until 2008, when he was dismissed from command of an elite battalion and forced to flee.Dubai police named Adam Delimkhanov, an adviser to Kadyrov, as the person who masterminded the murder. Delimkhanov has repeatedly denied any involvement.

RIA: Dubai court jails Tajik, Iranian over Chechen army officer murder http://en.rian.ru/russia/20100412/158534700.html

11:1112/04/2010

A Dubai court sentenced on Monday two men to 25 years in prison for their roles in the murder of the commander of a Russian Defense Ministry battalion in Chechnya.

Sulim Yamadayev, a Hero of Russia who commanded the elite Vostok Battalion in Chechnya, died in Dubai on March 28, 2009. He was shot in the chest with three bullets from a gold-plated gun in the car park of a luxury apartment complex where he was living with his wife and children.

Tajik businessman Makhsudzhon Ismatov and Iranian Mahdi Lorniya were accused of planning the murder and assisting the man who pulled the trigger. They will be deported to their home countries after serving their terms, which are equivalent to a life sentence in the Gulf state.

Lorniya previously worked in Chechen President Ramzan Kadyrov's stables.

Police said the gun used in the killing had been handed over to them by a Chechen delegation led by Kadyrov that visited the United Arab Emirates in 2008.

The Dubai court rejected in December a request for Kadyrov to be summoned to give evidence at the trial.

The name of the man suspected of pulling the trigger has not been disclosed. Investigators said he acted on information received from Ismatov, who is believed to have helped the man to flee the Emirates.

Dubai police have accused Adam Delimkhanov, Kadyrov's close friend and a lawmaker in Russia's lower house of parliament, of ordering the assassination. Both strongly denied any link to the murder.

Both Kadyrov and Yamadayev were former militants who joined Russia's federal troops. Chechnya saw two separatist wars in the late 1990s-early 2000s. The Vostok Battalion answered to the federal Defense Ministry and clashed on occasion with forces loyal to the Chechen president.

Sulim's brother Ruslan Yamadayev, a former member of the Russian parliament's lower house, was gunned down in central Moscow in September 2008. He was a prominent opponent of Kadyrov, who denied any involvement in his killing.

DUBAI, April 12 (RIA Novosti)

12.04.10 10:10 In the Stavropol region are looking for intruders that robbed the Assistant to the President of Chechnya on 7 million rubles - source http://www.interfax-russia.ru/South/news.asp?id=137344&sec=1672

GOOGLE TRANSLATION

Stavropol. April 12. Interfax-South - Police Kavminvod looking for five unknowns, who broke into the house of Assistant to the President of Chechnya in Pyatigorsk, stole 7 million rubles, told Interfax-South on Monday a source in law enforcement. "On the eve of Sunday around 22:15 Moscow time in Pyatigorsk in the horticultural association, five masked men entered the house of Assistant to the President of Chechnya. Threatening a gun owner and his wife, they tied them up and stole 7 million rubles and jewelry," - said the agency interlocutor . He said the attackers fled the scene. Assistant to the President and his wife were not injured.

Russia Today: Police hunt Moscow Metro bomber's husband in southern Russiahttp://rt.com/Top_News/2010-04-12/terrorism-dagestan-metro-attack.html/print

12 April, 2010, 10:19

Russian security forces launched a raid on Sunday isolating militants in a forest in the southern republic of Dagestan. The gang is allegedly led by Magomedali Vagabov, husband of one of the Moscow Metro suicide bombers.

The militants are thought to have links to Al Qaeda and are suspected of masterminding several terrorist attacks.

So far three Russian soldiers have been killed and seven injured in the raid, reports news agency Ria Novosti, referring to the republic’s the law enforcement body.

Magomedali Vagabov is on the international wanted list for terrorism offences.

His wife, Maryam Sharipova, was one of the two women who blew themselves up in the Moscow Metro on the 29th of March, killing 40 people.

RIA: Three police officers killed in clash in Russia's North Caucasushttp://en.rian.ru/russia/20100412/158534650.html

11:0612/04/2010

Three police officers were killed and seven injured during a clash with militants in Russia's North Caucasus republic of Dagestan, local police said on Monday.

The clash took place on Sunday morning after a group of militants, suspected for attempting to kill police officers and planning terrorist attacks, were surrounded in a forest in the Karabudahkentsky district of Dagestan, the police source said.

A high-ranking source from the Dagestan security services said Anvar Sharipov, the brother of Moscow metro bomber Miriam Sharipova, was among the militants. The information has not been officially confirmed.

Miriam Sharipova blew herself up in the Moscow metro on March 29 in a series of two blasts that killed 40 and injured dozens more.

Earlier in April, following terrorist attacks in the Moscow metro and in Dagestan, Russian President Dmitry Medvedev ordered the creation of a special anti-terrorism task force in the North Caucasus Federal District.

Russia has been fighting militants in the North Caucasus for almost two decades, including two brutal wars against separatists in Chechnya.

MOSCOW, 12 April (RIA Novosti)

Novinite: 3 Russian Officers Killed by Extremists in Dagestanhttp://www.novinite.com/view_news.php?id=115130

World | April 12, 2010, Monday

Three Russian Interior Ministry officers have been killed by extremists in Dagestan believed to be connected with the recent Moscow Metro bombing.

The three men were shot during an anti-terrorist operation in the Karabudahkenskiy Region of Dagestan. Three other officers have been wounded, an Interior spokesperson announced quoted by BGNES.

The operation was directed against a terrorist group headed by Magomedali Vagabov, who is believed to be the husband of one of the two suicide terrorists who blew themselves up in the Moscow Metro on March 29, 2010, killing 40 people.

ABNA.ir: The Wave of Islamophobia Spared The Perm Region – Russiahttp://abna.ir/data.asp?lang=3&id=183843

According to Ahlul Bayt News Agency (ABNA.ir), Perm Region is one of the few Russian regions that have been spared the wave of Islamophobia, an overvalued after the explosions in the Moscow metro, said the head of the Spiritual Administration of Muslims of Perm Muhammedgali Huzin.

«I can not remember that for the past 10 years, we have encountered some anti-Islamic sentiments. It is impossible, given that this is our land, on which we live a thousand years “, – stressed Huzin.

« In areas densely populated by the Tatar-Bashkir population of many mixed families, among representatives of various faiths a large number of friends, many common business. These social ties are unbreakable so that no xenophobic manifestations, thank God, no “- he added.

According to the source agencies, denominational world – the credit society Perm. “We were able to create and present a model of good neighborliness society: Muslims live in the Kama area, Old Believers, Catholics, Orthodox Christians, Jews, among whom there can not be friction. We sit at one table, we communicate, work together to fight society’s ills “, – said the head of the Permian DUM.

« And today we do not need to prove that we are united, that we are to condemn, etc. People just understand that we do not simply tolerated or tolerant society, but society, whose members respect each other “- he explained.

End Item / 143

ABNA.ir: Islamophobia Countinues: The Moscow Police Are Afraid of Girls Wearing Head Scarveshttp://abna.ir/data.asp?lang=3&id=183844

According to Ahlul Bayt News Agency (ABNA.ir), in Moscow continued checks and searches at Muslim women wearing the hijab. Ordinance adopted at the level of the Russian leadership of law enforcement agencies. Thus, law enforcement agencies recognize: the most dangerous man for them – a girl in a scarf.

«Do you really think that a girl in a scarf will blow up the metro? Under your attention, other police officers, under the attention of passers-by? “- I asked another policeman who stopped me to believe the documents. DPS officer even not listening to me: “I am sure that you do not represent any danger, but I ordered – check all the girls in headscarves,” – he replied.

Order of the operational headquarters for the disclosure of terrorist attacks on Mar. 29, 2010 is not advertised in the media. Probably, because, in essence, is a racist. This document prescribes verify the documents of “women of Caucasian appearance, which are types of scarves hijab. This was said on condition of anonymity employee of one of the police department of Moscow. According to him, the disposal of many police officers in fact ignored, because they understand the senselessness of this document.

Recall, as a result of statements of politicians, representatives of power structures and the mass propaganda media Islamophobia in Moscow came to a new level: in the capital began attacks on Muslim women and people of the North Caucasus.

End Item / 143

April 9, 2010Russia Profile Weekly Experts Panel: the Right Response to Terrorismhttp://www.russiaprofile.org/page.php?pageid=Experts%27+Panel&articleid=a1270836267

Introduced by Vladimir FrolovRussia Profile

Contributors: Vladimir Belaeff, Stephen Blank, Ethan S. Burger, Sergei Roy

The suicide bombings of Moscow’s metro last week sparked an impassioned public debate about how best to deal with domestic terrorism. While some politicians and commentators called for draconian counter measures, including mass-finger printing and the return of the death penalty, other sections of the press fretted that the government might use the attacks to justify a crack-down on civil liberties. President Dmitry Medvedev himself mixed talk of “destroying” terrorists with an emphasis on the need for economic and social modernization of the North Caucasus. What is the right response to terrorism? Are fears of a political crackdown in Russia misplaced? Will Medvedev continue on the path of modernization, including modernizing the security services? Or will he succumb to the temptation of a political crackdown to bolster his electoral position with a “tough guy” image?

In the immediate aftermath of the double metro bombing rumors began to swirl that the Kremlin would respond to terror by folding up President Dmitry Medvedev’s program of expanding economic and political freedom in Russia.

Indeed, the political incentives to look tough on terror by increasing the role of security services are real. Parliamentary leaders have already called for tougher action against terrorists and their accomplices, and even for measures to curtail press freedom.

The head of the Federal Investigative Committee Alexander Bastrykin has called for fingerprinting the entire population of the Caucuses, while others in the security services are grumbling that Medvedev’s policies of expanding civil liberties and curtailing the powers of the police, particularly his tough fight against police corruption, could be inviting terrorists to strike at the heart of Russia.

Some even predicted the return of Prime Minister Vladimir Putin to the presidency before the presidential election of 2012.

But succumbing to such temptations right now, it may seem, would provide the terrorists with their greatest victory. Their real target is Russia’s modernization and Medvedev’s program to unleash local modernizing forces to drag the North Caucuses out of its primordial state of incompetent government, corruption, nepotism and thuggery.

Making Russia a less modern state and a less free country would be like playing by the terrorists’ book.

Medvedev seems to be going in the opposite direction, as he made clear in his speech in Dagestsan a few hours after another suicide bombing occurred in the Dagestani town of Kyzlyar.

Efforts to improve governance, stimulate economic growth and modernize social infrastructure in the North Caucuses will continue. Better governance with greater public accountability of local officials will be key, as well as efforts to marshal private investment by wealthy Russian businessmen with local Caucasian roots.

Medvedev also let it be understood that greater accountability and efficiency will be demanded of the security services with regard to preventing or preempting further terrorist attacks. These are exactly the goals of his reform of the Interior Ministry, and he made it plain that the reform may not stop there.

Are fears of a political crackdown in Russia misplaced? Will Medvedev’s team veer off the course of modernization under pressure from terrorists and roll back its plans to expand political and economic freedom in Russia? Will Putin replace Medvedev at the helm were terror attacks to continue? How is Medvedev handling his first major terrorist attack in the heart of Moscow? Will he continue on the path of modernization, including modernizing the security services as befits a democratic country? Or will he succumb to the temptation of a political crackdown to bolster his electoral position with a “tough guy” image?

Ethan S. Burger, Adjunct Professor, Georgetown University Law Center, Washington, D.C.:

The desire for revenge and retribution is an understandable human reaction, but one can never bring the dead back to life. The killing of innocent human civilians by suicide-murderers is never justified irrespective of the political cause they may support. In fact, their actions are usually counterproductive, for each act of terrorism will usually trigger a reaction, which too is likely to harm innocent individuals. In fact, terrorist acts represent links in the cycle of violence which very often set in motion forces than make the situation worse.

Honor killing and revenge motivates many of those in the North Caucasian insurgency involved in killing innocent individuals - who usually have no ability to influence policy anyway. Acts of terrorism usually – though not always - strengthen extremists on the other side, who in their rush to retaliate often adopt misguided policies of increased repression or limitations on civil rights, freedom and human rights in some manner.

With respect to separatists, when the toll of their actions is sufficiently high it can on occasion lead to political compromise. One example is the success of the National Liberation Front (FLN)’s campaign for Algerian independence from France, but at least Algeria was a potentially viable country, unlike Chechnya. In South Africa the fight against minority rule was certainly justified, but when civilians were killed anti-Apartheid activists harmed their cause and lessened the support of persons who otherwise might have been sympathetic to them.

It is troubling to read that the Russian Ministry for Internal Affairs is preparing to require registration for all photocopiers, ostensibly to hamper communication between potential terrorists. This idea is patently absurd in the age of the Internet.

Politicians may talk tough, but it is impossible to defend every target from all potential threats against persons willing to die for their cause. Unfortunately, moderate political leaders tend to disappear in times of crisis. Neither the Russians nor the Chechens have

produced a Nelson Mandela or Anwar Sadat to my knowledge, or if they have, they have probably chosen to live abroad. Perhaps there might be some less capable people on either side ready to work toward a negotiated solution to what is really not an intractable problem. Unfortunately, this is usually possible only when the small number of extremists on both sides can be constrained by those who share their political objectives.

Vladimir Belaeff, President, Global Society Institute, Inc., San Francisoco, CA:

As we can see at present, the response of Russian authorities to the terrorist events of recent days has been swift and adequate. The perpetrators have been identified, their support network has been rolled up and the effect of the criminal acts has been to consolidate society in sincere grief and respect for the victims. Note also the absence of any significant acts of ethnic violence in response to the attacks, which were perpetrated by individuals from the Caucasus region.

Even though the Communist Party is unofficially proposing the restoration of the death penalty, the government’s response to such suggestions has been an immediate and firm “no,” and the idea apparently has no traction in Russian society.

Regarding recommendations for fingerprinting citizens, it should be noted that in the United States (and other leading countries that are models for Russian liberals), fingerprinting of the entire population has been in place for generations and no sane person would suggest that America is reactionary because of this. Therefore, as far as citizens’ freedom from compulsive biometric intrusion is concerned, Russia today is actually more liberal than the United States.

As to “more economic freedom,” Russia still does not have legislation that prevents and criminalizes insider trading - again, something that economically liberal America has had for many decades.

Therefore, the premise that terrorism may cause the abandonment of presumed plans to expand political and economic freedoms as part of Russia’s economic modernization is erroneous; it seems to be rooted in a fundamental misunderstanding of modernity and of political and economic freedom. This misunderstanding is not unique to Russian liberalism alone, but it is much more notable in Russian liberal thought, and has been since the late 18th century.

True economic and political progress is achieved in environments that combine law and order with respect for diversity (therefore, totalitarian societies are outside this discussion). Besides, political liberalism can be just as intolerant of diversity as the most extremist dictatorship. When in 1917 Russia’s ultra-democratic and liberal Provisional Government established rules for the election of the Constitutional Assembly, it prohibited candidates from the right wing of the political spectrum in order to guarantee a delegate corps which was at least centre-left or Socialist in its composition.

It has been a fantasy of Russian liberals from the times of Chaadayev onwards to imagine that somewhere “over the hill” there is a “more liberal” society, which Russia must emulate or perish. Ironically, these individuals have no idea that their paradigm “za bugrom” is not at all like what they imagine. It seems that today many advocates of “expanded political and economic freedoms” misinterpret the social and political order in advanced societies and believe that these countries enjoy special liberties not presently available in Russia.

In reality, Russia has already transitioned to a sufficiently modern social and economic architecture, and what it lacks is more law and order, not more “liberty.” Of course, there are radical liberals in Russia who must claim that their lack of political success (i.e., inability to achieve power over society) is due to “repression.” They seem unable to confront the fact that it is their ideology and extravagant political behavior which doom them in the eyes of the electorate.

Terrorism is a challenge to all modern societies. Its roots are often not in political or religious beliefs, but in pre-modern cultural values (for example, the tradition of “blood vengeance” in the Caucasus, abandoned by other European societies as far back as 3000 years ago). Russia is determined to fight terrorism within the framework of modern legal and social values. This is a rightful response and one must wish Russia success in this endeavor.

Sergei Roy, journalist, writer, Moscow:

The immediate responses to the Metro bombings in Moscow were on the whole predictable and predictably varied.

The population at large, particularly in Moscow and especially on the Internet, gave vent to anger against the authorities, particularly the FSB and the police, for their failure to protect them against the murderous attacks. The reaction was all the more acute as the people of Moscow had not known such tragedies for six years and now realized, without saying so aloud, that they themselves had grown complacent, happy-go-lucky, and irresponsible in matters of public safety and vigilance, especially in such “soft” targets as the Metro.

In the heat of the moment some members of the public expressed the desire to drive all the natives of the Caucasus now living in or coming to Moscow and elsewhere in Russia back to the North Caucasus republics and fence them off with razor wire, etc. Of course, there was an immediate response to these angry outbursts from the more sober-minded element: such measures were clearly impracticable and in fact plain stupid, amounting as they did to creating a mini-Afghanistan on Russia’s borders. A leaf we’ve turned over.

The official reaction from the two agencies most concerned, the FSB and Interior Ministry, was one of admitting abject failure. The suicidal “black widows” were known to these agencies; their disappearance, after the death of their bandit husbands, to some training camp or base for suicide bombers should have been acted upon; they could have

been stopped as they traveled to Moscow by coach if the checks en route had been less perfunctory or carried out at all; their appearance at a rented flat in Moscow could have been noticed if the police officers responsible for the area had been more diligent. And so on. The public has maliciously commented that all this could have been done if the police had not been too busy pursuing more lucrative activities like pestering petty tradesmen.

On the political scene, inside and outside of Parliament there was a natural tendency to keep in tune with the public mood. Hence the calls for tougher legislative and executive measures to combat extremism, including some exotic ones, like the fingerprinting of everyone from the North Caucasus, lifting the moratorium on capital punishment, and the like. This sort of talk can be safely predicted to gradually fizzle out and bear no practical result except perhaps for president Medvedev’s proposal to pass legislation providing for stiffer sentences for complicity in terrorist acts.

On the right-hand side of the political spectrum (which is here entirely extra-parliamentary) and in the media so inclined, there was a reflex fear expressed that the powers-that-be will immediately “tighten the screws,” curtail democratic freedoms, especially the freedom of the press. All of this was not just predictable but outright boring, as these fringe elements trundle out the same hate-ridden nonsense each time something tragic happens in this land. No wonder their electoral support is in the statistical error category. How else is the public to react, say, to the argument that the poor terrorists were blowing up innocent people merely in an attempt to draw attention to the unbearable situation in the Caucasus? And that’s just a sample of this kind of lunacy.

President Medvedev, after some forceful expressions in the immediate aftermath of the blasts (like “We will destroy them all”), came up with a sensible five-point program involving the state’s political and economic structures, the public, religious and culture figures and educationalists, intended to deal with the social and ideological roots of terrorism.

In this spirit, my understanding is that the fight against the world-wide jihadist scourge will be with us for decades to come. It calls for unity, vigilance, and even sacrifices, both within the nation and internationally. Just how attainable these desiderata are is another matter.

Professor Stephen Blank, the U.S. Army War College, Carlyle Barracks, PA:

Fears of a crackdown are not misplaced, as similar incidents in the past have served as pretexts for commensurate crackdowns and the unjustified augmentation of central power.

But crackdowns will not solve the problems of the north Caucasus. The inhabitants of the region are protesting decades - if not centuries - of Russian misrule, and lately the pervasive corruption and brutality of Moscow's satraps in the region.

It is not a coincidence that this is quite possibly the poorest region of the Russian Federation. Thus, Moscow must blend repression with attraction. Perhaps Alexander Kholopnin, Medvedev's new envoy to the region, can do this?

But in fact major reforms of relations between the center and the regions, and of the structure of power that allows the security services to act without accountability, are necessary. Otherwise Russia can neither win this war nor offer the peoples who make up the North Caucasus anything more compelling than radical Islamism.

Will Medvedev have the vision to devise a program of the needed political and economic reforms? And can it be implemented? Those are the real questions raised by the tragedy in Moscow on March 29.

Moscow Times: Moscow Officials Walk Out Over Luzhkov Gibe http://www.themoscowtimes.com/news/article/moscow-officials-walk-out-over-luzhkov-gibe/403696.html

12 April 2010By Kevin O'Flynn

Two top Moscow government officials stormed out of a hearing Friday at the Public Chamber during a heated debate over the future of City Hall’s long-term development plan.

Moscow’s chief architect Alexander Kuzmin and City Duma Speaker Vladimir Platonov walked out of the meeting on the city’s controversial plans for development over the next 15 years after fierce criticism from members of the body.

The walkout was sparked by a pointed remark from Marat Gelman, who heads the Museum of Modern Art in Perm.

“For us, Moscow is love, but for [Mayor Yury] Luzhkov, it’s a vegetable patch, from which he harvests,” Gelman said, RIA-Novosti reported.

Luzhkov has frequently been criticized for crony capitalism in the city. His wife, Inteko owner Yelena Baturina, built her successful construction business in Moscow, but he insists that she has never had any help from him in his official capacity.

As Kuzmin walked out, he said, “For words like that, you should be punched,” experts who attended the hearing said. “I never want to hit anyone in the Public Chamber, and that is why I have to leave.”

Cries of “shame” and “cowards” were heard as he and Platonov left the hearing.

The General Plan, or Genplan, for Moscow is a 1,500-page document that sets out how the city will develop up to 2025. The plan has passed two readings in the City Duma,

dominated by United Russia, and it is expected to easily pass in the third and final reading.

The plan divides the city into different zones — for stabilization and development — which allow only for repairs in the former and demolition and new construction in the latter. It envisions 200 million square meters of construction over the next 15 years, up to 2.13 million parking spaces and 60 buildings more than 75 meters high.

Critics have been especially vocal about where these zones have been placed, saying the plan is a “death sentence” for the city’s architectural heritage. Rustam Rakhmatullin, from architectural preservation society Arkhnadzor, said more than 1,000 cultural monuments were in danger because of the rezoning.

Critics also say the plan will not solve the capital’s traffic problems. Mikhail Blinkin, head of the Institute of Transport and Road Management, said public transportation “will die in a few years” if the plan is passed.

“Everyone knows that the Genplan is bad, but they are passing it for three reasons: greed, cowardice and indifference,” Gelman said at the hearing.

Public hearings to discuss the plan took place last summer, and the city says more than 160,000 Muscovites took part, offering in excess of 70,000 questions and complaints.

“We conducted honest public hearings, and it is offensive to hear a different opinion,” said Kuzmin, sparking laughter among those at the hearing, Kommersant reported.

“For two to three hours, we worked quite constructively, but then from certain members of the Public Chamber we heard insults, humiliation of our honor and dignity. We had to leave the session,” Platonov said, Interfax reported. “We will not appear again in the Public Chamber until we receive an apology.”

Speaking by phone on Sunday, Rakhmatullin stood by the Public Chamber’s criticism.

“It wasn’t the fault of the Public Chamber that the discussion was stopped,” he said, adding that the talks were tough but not personal. “They showed that they are members of Luzhkov’s team.”

KYRGYZSTAN

RIA: Kyrgyzstan hopes to get more than $150 million aid from Russiahttp://en.rian.ru/russia/20100412/158535146.html

11:3412/04/2010

Russia should give Kyrgyzstan more than $150 million aid, a first deputy prime minister in the interim government said on Monday following talks in Moscow.

Almazbek Atambayev flew to Russia for discussions after the Kyrgyz opposition took control of the country last week, ousting the government of President Kurmanbek Bakiyev.

“During the talks I said that last year when there was absolute peace and quiet Kyrgyzstan received $150 million from Russia. In the current difficult situation the grant must be bigger,” he said, adding that he “met with understanding” from the Russian side.

“We were assured that Kyrgyzstan is a fraternal country for Russia, and Kyrgyz problems are Russian problems,” Atambayev said at a news conference. “The day after tomorrow an interim government delegation headed by Deputy Prime Minister Temir Sariyev will fly to Moscow for talks.”

Last Thursday, the day the opposition took control of the government in Bishkek, Russian Prime Minister Vladimir Putin spoke by telephone with the new interim prime minister. Roza Otunbayeva told him that Kyrgyzstan needed help and Putin said Russia was ready to provide humanitarian aid.

BISHKEK, April 12 (RIA Novosti)

Reuters: Kyrgyz interim govt says Russia to give aid http://www.alertnet.org/thenews/newsdesk/WLB2163.htm

12 Apr 2010 05:26:35 GMT Source: ReutersBISHKEK, April 12 (Reuters) - The deputy head of Kyrgyzstan's interim government said on Monday that Russia had pledged to provide financial aid to the new leadership of the Central Asian country."We reached agreement on a solid grant," Almaz Atambayev, the first deputy leader of the interim government, told reporters."Kyrgyzstan, for Russia, is a brother country," he told reporters, saying that more than $150 million in aid had been requested. A Kyrgyz delegation will travel to Moscow this week for further talks on aid and oil product supplies, he said. (Reporting by Maria Golovnina; Writing by Conor Sweeney; Editing by Guy Faulconbridge)

24.kg: Russia to provide real support of investment projects in Kyrgyzstan http://eng.24.kg/politic/2010/04/12/10954.html

12/04-2010 11:43, Bishkek – News Agency “24.kg”, By Daniyar KARIMOV

Russia promised Kyrgyzstan to provide a real support of investment projects in the territory of the country. This has been stated by the First Deputy Chairman of the interim government of the KR Almazbek Atambaev at the press conference on 12 April 2010.  According to him, during the negotiations in Moscow they considered questions of construction of Kambar-Ata HPP and other important projects. Almazbek Atambaev asserts the Russian party promised real investments and support.  Concerning the cancellation of electric power tariffs, Almazbek Atambaev stated that “people, who paid earlier according to the new price, are entitled to demand recalculation”. “The most part of electric power in Kyrgyzstan is generated in hydro power plants, - he noted. – Its cost is 0.70 soms. Expensive electric power is generated in thermal power plants. We will sell it abroad”.  Almazbek Atambaev informed that the new management of the Ministry of Energy is assigned to reduce losses and ensure uninterrupted supply of electricity to consumers.

Zeenews: Special operation against ousted Kyrgyz President?

http://www.zeenews.com/news618433.html

Teyyit: Kyrgyzstan's interim government said on Monday it was planning a special operation against ousted President Kurmanbek Bakiyev, who warned any attempt to seize him would result in bloodshed.

"Let them try to seize me. Let them try to kill me," Bakiyev told reporters after addressing a rally of supporters in his home village.

"I believe this will lead to such a great deal of bloodshed which no-one will be able to justify," Bakiyev said.

Bakiyev fled Bishkek to his stronghold in the south on April 7 after troops fired on protesters outside his offices, killing at least 81 people. The interim government says he must step down or possibly face arrest.

"We are preparing a special operation (against Bakiyev)," Almaz Atambayev, the first deputy leader of the interim government, told reporters in Bishkek.

"But he is hiding behind a human shield ... We hope we can carry it out without the deaths of civilians," Atambayev said. He refused to give any further details about the operation or to say when it would take place.

On Sunday the new government, led by Bakiyev's one-time allies, said it would not use force against Bakiyev but suggested it may act to arrest him and try him for the deaths in Bishkek.

Holed up in his home village of Teyyit outside the city of Jalalabad, Bakiyev said on Sunday that any attempt to kill him would "drown Kyrgyzstan in blood”.

Bakiyev's defiance has threatened to further destabilize the volatile Central Asian nation where the United States operates a key military air base supporting operations in nearby Afghanistan.

Bakiyev rally

A few thousand supporters gathered for the rally which Bakiyev addressed on Monday in his home village.

Speaking to reporters before the rally, Bakiyev said he had spoken to an envoy from the United Nations to ask for peacekeepers to be sent.

"I ... expressed a request for the United Nations to introduce its peacekeeping forces in the north of the republic to prevent any further escalation of the situation there," Bakiyev said outside a traditional felt tent, or yurt.

There was no heavy security presence in the village and the situation appeared calm, a report said. Groups of men helping arrange the rally sheltered from a cold rain in a large hut, eating spiced rice and meat and sipping steaming hot tea.

Unrest is no surprise for many Kyrgyz people, their memories still fresh of a revolt in 2005 which brought Bakiyev to power on promises to bring democracy and justice.

The self-proclaimed government has said Russia is its key ally and some leading ministers have said the US lease on its air base could be shortened, raising speculation Moscow could try to use the base as a lever in relations with Washington.

Bureau Report

Apa.az: STRATFOR: The new government in Kyrgyzstan is loyal to Moscow, which means that the negotiations over the use of Manas military base have nothing to do with Bishkek

http://en.apa.az/news.php?id=119726

[ 12 Apr 2010 11:21 ] “The challenges that the new government of Kyrgyzstan will face are really difficult to fix easily”, - STRATFOR’s expert Marco Papic said in an interview with APA’s Washington correspondent on April 11th.

Mr. Papic pointed out that, Kyrgyzstan is an impoverished economy that has very little to export. Its plentiful electricity generated by hydro-power is really the only viable export it has and even that is suffering as glaciers continue to melt, the expert said.

“The question, therefore, is whether there is anything intrinsic that the new government can do to improve the lives of people in Kyrgyzstan? There is one thing, they could become more dependent on Russia and hope that the Kremlin continues to sustain them through the economic crisis (one of the biggest problems for Kyrgyzstan is that the recession has cut the flow of remittances from Russia) and help them build more hydropower for export” – STRATFOR’s analyst said.

Speaking about current situation in the country, Mr. Papic mentioned that, it does not seem that Kyrgyzstan is moving into semi-authoritarianism. He believes that, it would appear that the new government is a mélange of opposition groups and even includes ethnic minority component.

“If the new government sticks to its announcement that it would hold elections within 6 months after passing a new constitution, then Kyrgyzstan really will have become one of the most democratic Central Asian states. As for 2005, it is not the case that Bakiyev’s Tulip Revolution was undemocratic, it is just that he felt compelled to turn to nepotism to rule. It is now up to the new government to avoid his mistakes. However, the constraints of Kyrgyzstan’s geography, culture and history may make that difficult. Not impossible though”.

Answering the question about Manas military base’s future, the US analyst said: “Certainly there is a LOT of concern. However, it has to be understood that the change in government is just the first move in what should be long negotiations over the use of Manas. The new government is loyal to Moscow, which means that the negotiations have NOTHING to do with Bishkek. This is between Moscow and Washington.”

Washington Post: Russia blamed for fueling unrest in Kyrgyzstanhttp://www.washingtonpost.com/wp-dyn/content/article/2010/04/11/AR2010041103827_pf.html

By Philip P. PanMonday, April 12, 2010; A01

BISHKEK, KYRGYZSTAN -- Less than a month before the violent protests that toppled the government of Kyrgyzstan last week, Russian television stations broadcast scathing reports portraying President Kurmanbek Bakiyev as a repugnant dictator whose family was stealing billions of dollars from this impoverished nation.

The media campaign, along with punishing economic measures adopted by the Kremlin, played a critical role in fanning public anger against Bakiyev and bringing people into the streets for the demonstrations that forced him to flee the capital Wednesday, according to protest leaders, local journalists and analysts.

"Even without Russia, this would have happened sooner or later, but . . . I think the Russian factor was decisive," said Omurbek Tekebayev, a former opposition leader who is now the No. 2 figure in the government.

Russian Prime Minister Vladimir Putin has denied that Moscow played any role in the uprising, and leaders of the movement to oust Bakiyev insist they received only moral support. But the Kremlin had made no secret of its growing displeasure with Bakiyev, and over the past few months it steadily ratcheted up the pressure on his government while reaching out to the opposition.

The strategy was a sharp departure from Russia's traditional support for autocratic leaders in its neighborhood. It paid off quickly and dramatically, and it appears to have delivered the Kremlin a rare foreign policy victory.

Not only has Moscow served notice on other wayward autocrats in its back yard -- many of whom also govern Russian-speaking populations that watch Russian television -- it also appears to have gained a greater say over the future of the U.S. air base here, which is critical to supplying the NATO military surge in Afghanistan.

Little more than a year ago, the Kremlin regarded Bakiyev as an ally, promising him more than $2 billion in aid during a visit to Moscow at the height of the global economic crisis.

On the same trip, Bakiyev announced plans to close the U.S. air base, in what was widely seen as an exchange.

Four months later, after Russia had made good on $415 million of its pledge, Bakiyev suddenly agreed to keep the air base open when Washington offered more than three times the original rent. Russian officials, including President Dmitry Medvedev, indicated at the time that they had blessed the decision, but it soon became clear that the Kremlin had been cheated -- and was furious.

"The Russians were upset and angry, not just because of the base but because of his attitude," Tekebayav said.

In November, Russian media reported that Putin upbraided the Kyrgyz prime minister at a summit, asking why the U.S. air base had not been closed and alleging that the Russian aid money had been stolen by Bakiyev's family. In February, Moscow postponed payment of the remaining $1.7 billion of the package, with officials saying publicly that the first tranche had been misused.

In late March, two weeks before the April 7 protests, Russia's Kremlin-friendly television stations and newspapers marked the fifth anniversary of Bakiyev's rise to power in the putsch known as the Tulip Revolution with unusually tough stories about his rule. One paper compared him to Genghis Khan, and Russia's top television station hammered him with multiple reports alleging corruption.

Much of the coverage focused on Bakiyev's son, Maksim, whom he appointed to lead an economic development agency and who had become a lightning rod for opposition charges of nepotism and embezzlement.

In addition to the reversal on the U.S. base, analysts said, the Kremlin turned against Bakiyev because he tried to bring China into a Russian deal to build a hydroelectric dam and to extract rent from Moscow for a Russian air base in Kyrgyzstan. Russian leaders were also upset that Bakiyev's family was buying gasoline from Russia at special prices and selling it to the air base, a scheme worth as much as $80 million per year, Russian media reported.

Alexander Knyazev, a political analyst here with ties to a Moscow think tank, said people began to worry that the Kremlim might expel the estimated 1 million Kyrgyz migrants who work in Russia and send money home to their families. The remittances account for as much as a third of the Kyrgyz economy and at least half of the government's budget, he said.

"Bakiyev was spoiling the relationship, and people saw it," he said. "That's how this protest mood got started."

After the opposition announced plans for nationwide protests, Putin provided a final spark by signing a decree March 29 eliminating subsidies on gasoline exports to Kyrgyzstan and other former Soviet republics that had not joined a new customs union.

When the tariffs kicked in April 1, Russian fuel shipments to Kyrgyzstan were suspended, said Bazarbai Mambetov, president of a Kyrgyz oil traders association. Within days, gas prices in Bishkek began to climb, enraging residents already angry about sharp increases in utility fees.

As the Kremlin leaned on Bakiyev, it also consulted the opposition, hosting its leaders on visits to Moscow, including in the days before the protests. On the eve of the demonstrations, the Kyrgyz prime minister accused one, Temir Sariev, of telling police that he had met with Putin and had won his support for efforts to overthrow Bakiyev.

Sariev, now the interim finance minister, said he never met Putin or told police any such thing. "But I did meet privately with friends," he acknowledged with a smile. "We did discuss the situation in Kyrgyzstan."

Tekebayev, second in command of the interim administration, said Russia's actions were important because they signaled to government officials that Bakiyev could not stay in office, undermining his support in key ministries and regions when the opposition seized control.

"The Russians used to work only with those in power in the former Soviet Union," he added. "But in the last year, they started developing relations with the opposition, like the

Americans and Europeans. I think, for the first time, this approach was a success for them."

POLISH PLANE CRASH

RIA: Russia builds road to remove wreckage of Polish president's planehttp://en.rian.ru/russia/20100412/158535864.html

12:2112/04/2010

Russian specialists have started building a road to aid the removal of the wreckage of Polish President Lech Kaczynski's plane, which crashed in west Russia on Saturday, killing all 96 people on board.

"Today work has begun to build a road on the territory of the military aerodrome. Otherwise, the fragments of the plane wreckage cannot be removed from boggy terrain," a spokesperson for the Smolensk regional administration said, adding that the work would take several days.

Most of the bodies of the victims of the crash have already been removed from the wreckage and sent to Moscow, but Russian and Polish investigators will continue to search for remains on Monday.

The president's body has been identified and flown to Warsaw where it will lie in state for several days until burial.

SMOLENSK, April 12 (RIA Novosti)

Russia Today: Russia mourns for Poles killed in plane crash near Smolenskhttp://rt.com/Top_News/2010-04-12/russia-poland-mourning.html/print

12 April, 2010, 09:21

On Monday, services will be held throughout Russia to commemorate the victims of the plane crash near Katyn. Among the perished were the President of Poland, Lech Kaczynsky, and the country’s top officials.

National flags across Russia are being flown half mast on this day. All entertainment programs on TV have been cancelled.

On Sunday in Moscow people were still queuing at the Polish Embassy to express their condolences.

People in Smolensk flocked to the gates of the airport near which the plane crash happened. Whole families came to lay flowers. Some of them tried to do it away from the cameras, leaving flowers on the hoods of the TV companies’ vehicles.

Polish journalists set up a provisional monument with candles at the Katyn cemetery for their compatriots who perished.

A hotline was established in the city. Hundreds of people phoned to express their condolences, say prayers and offer material help.

Polish investigators, along with their Russian colleagues, are still working on the site to collect all the information in order to find out exactly what happened.

The official version is that the cause of the plane crash was human error.

“The record of flight communications proved that there were no technical problems with the plane. The pilot was informed about the poor weather conditions. Nevertheless, he took the decision to land,” says Aleksandr Bastrykin, the head of the investigation committee.

The bodies of those killed have been taken to Moscow. Relatives continue to arrive to identify their loved ones. Moscow authorities are ready to pay all the expenses connected with their stay in Moscow. Psychologists of the Emergency Ministry along with their Polish colleagues are on duty to offer help if necessary.

The Polish minister for health has arrived in Moscow to assist in the process. So far, 24 people have been identified. The process is expected to take quite a long time, as in many cases DNA tests will be required.

RIA: Forensic tests on Polish plane crash victims "complete"http://en.rian.ru/world/20100412/158533832.html09:5612/04/2010

Forensic tests on the victims of the crash of the Polish president's plane near Smolensk on Saturday have been completed, the Russian Health Ministry said on Monday.

"The head of the ministry Tatiana Golikova met [Polish] Health Minister Ewa Kopacz and pronounced all forensic tests to be complete," a statement said.

The Soviet-made TU-154 carrying President Lech Kaczynski hit the top of trees as it attempted to land at a Smolensk airport in the west of Russia in thick fog on Saturday morning, killing all 96 people on board the plane.

Most of the bodies of the victims of the crash have already been removed from the wreckage and sent to Moscow but Russian and Polish investigators will continue to search for remains on Monday.

The President's body has been identified and flown to Warsaw where it will lie in state for several days until the burial.

MOSCOW, April 12 (RIA Novosti)

RIA: Search for body parts continues at Kaczynski's plane crash sitehttp://en.rian.ru/world/20100412/158532356.html

07:3312/04/2010

Russian and Polish investigators will continue on Monday the search for the remains of those killed in the Polish president's plane crash on Saturday, a Russian police source said.

The Soviet-made TU-154 carrying President Lech Kaczynski hit the top of trees as it attempted to land at a Smolensk airport in the west of Russia in thick fog on Saturday morning, killing all 96 people on board the plane.

"The investigators will resume the work at the site of the crash  at 09.00 Moscow time [05.00 GMT]. They will search for the remains of the victims that could be scattered around the site or buried in the ground rather than in the wreckage of the plane," the source said.

The official said that the investigators and rescue workers discovered several body parts at the site on Sunday after most of the remains had been removed from the wreckage and sent to Moscow.

"A more thorough search should be carried out at the site," he said.

According to investigators, the crash was so strong that the plane burst into small pieces with only a few relatively large parts remaining.

Polish Health Minister Ewa Kopacz, who is currently in Moscow, said earlier that only 14 bodies of the victims could be easily identified by relatives.

Another 20 bodies have been identified by forensic experts but DNA testing will be necessary to confirm the identity of the rest of the victims, she said.

The body of Lech Kaczynski has been identified and flown to Warsaw where it will lie in state for several days until the burial.

The Polish government has announced that there will be public access to Kaczynski's coffin at the presidential palace in Warsaw on Tuesday.

SMOLENSK, April 12 (RIA Novosti)

12 April 2010

Interfax: Patriarch Kirill and Patriarch Theodore mourn over people killed in Smolensk air crashhttp://www.interfax-religion.com/?act=dujour&div=213

Alexandria, April 12, Interfax - Patriarch Kirill of Moscow and All Russia expressed his condolences over death of Poland’s president, his wife and other members of Polish delegation in an air crash.

"We will pray for those people who died and we believe that Katyn will now remember not only innocently killed people (who were buried there – IF), but also those who were going to commemorate them and died in this pilgrimage," Patriarch Kirill said on Saturday at a meeting with Patriarch Theodore II in Alexandria.

"Our hearts are filled with sincere grief. They were going to Katyn to commemorate their compatriots innocently killed in this place," the Patriarch said.

Patriarch Kirill and Patriarch Theodore II on behalf of the faithful of the Orthodox Churches of Alexandria and Russia wrote a joint message of condolences to acting Polish President Bronislaw Komorowski.

"Katyn – the place of common historical pain for both the Russian and Polish people. Since this day, the commemoration of the thousands of those who were killed in the Katyn forest will be bound up with the blessed memory of all the passengers of the crashed airliners," the message voiced by Patriarch Kirill reads.

The two patriarchs also expressed their condolences to Metropolitan Sawa of Warsaw and All Poland as hierarch of the Polish Orthodox Church Archbishop Miron also died in the air crash.

Focus: Russian press on Smolensk plane crash (ROUNDUP) http://www.focus-fen.net/index.php?id=n216298

12 April 2010 | 09:45 | FOCUS News Agency Moscow. Poland, Russia and dozens more countries are mourning for the victims of Saturday’s unprecedented plane crash close to Smolensk, which claimed the life of Polish President Lech Kaczynski, Vremya Novostei daily writes.The tragedy caused real shock all over the world. Never has a plane crash ever caused such large-scale political shaking. In addition, it affected an absolutely successful and influential person of the international and European community, an EU and NATO

member.According to the final official data, 96 people died in the plane crash close to Smolensk. All of them were Polish citizens, with most of them being prominent state figures. They were flying to the memorial service in Katyn where a few hundreds of interned Polish officers were shot dead in 1940 at the order of the soviet leadership.

On Saturday morning Smolensk was veiled in usually thick fog. North airport expected two airplanes from Warsaw – first a freight one and then the one with President Kaczynski and his delegation onboard, Rossiyskaya Gazeta daily writes.The first one landed successfully at about 11:00 a.m., but literally immediately after that thick fog closed the airport. And the rumor that Lech Kaczynski’s plane was redirected to Moscow spread immediately among the guests at the memorial service.The journalists in Katyn got ready for long waiting, but the events started developing very quickly. It turned out the pilots of the presidential plane decided to land in poor visibility. “When the airplane emerged from the fog, it was clear that something will happen – it was tipping to the left. It flew over our heads and the sound of the engine was unusual, sharp and then there was a heavy blow,” says Anton Samoylov, an eyewitness to the crash, who was visiting at the time an auto dealership a few hundreds of meters away from the scene of the tragedy.

On Saturday when there were no doubts that President Lech Kaczynski, his wife Maria and 94 more people died in the plane crash close to Smolensk, Warsaw started getting deserted, Kommersant daily writes.The people left their homes, abandoned their work and headed for the presidential palace. The city grew quiet. A silent flow of people was slowly going to the city center, hardly edging their way along the narrow street.The endless line of people was slowly moving past the president’s residence, leaving flowers and lighting candles in front of the monument to King Poniatowski. Red and white roses, red and white sprigs, red and white tulips. More than one thousand lights and flames formed flickering mirage, as on a hot day.Standing close to them was hot, even after the cool night fell.

The News: Ombudsman’s body identifiedhttp://www.thenews.pl/national/artykul129338_ombudsmans-body-identified.html

12.04.2010 10:20

The body of the Ombudsman Janusz Kochanowski, one of many of Poland’s prominent politicians who died in the plane crash in Smolensk on Saturday, has been formally identified.

The 60 year-old Kochanowski was Commissioner for Civil Rights Protection of the Republic of Poland.

Health Minister Ewa Kopacz, who is currently in Moscow, said that identification of 14 of the 96 victims has been made and the remains of 10 more can be ascertained by using visual characteristics of the bodies. The rest will have to be identified from DNA, the minister said.

The body of President Lech Kaczynski - formally identified by his twin brother Jaroslaw at the weekend - was flown home on Sunday and will lay in state at the Presidential Palace from Tuesday onwards.

The remains of the president’s wife, First Lady Maria, have yet to be identified, however. (pg)

Bloomberg: Solidarity ‘Godmother’ Walentynowicz Dies in Katyn Plane Crash http://www.themoscowtimes.com/business/article/solidarity-godmother-walentynowicz-dies-in-katyn-plane-crash/403698.html

12 April 2010Bloomberg

Anna Walentynowicz, a Solidarity activist whose firing started the Gdansk shipyard strike in 1980 and helped spread trade-union activism against the communist regime in Poland, died in the Katyn plane crash in Russia.

Walentynowicz accompanied Polish President Lech Kaczynski and other senior officials on the flight to the Smolensk region, where they were to pay tribute to more than 20,000 Polish military officers massacred by Soviet secret police in the Katyn forest and other parts of Russia 70 years ago.

Walentynowicz, 80, worked in the Gdansk shipyard as a welder and a crane operator. In 1978, she joined an illegal trade union and edited its newspaper.

For her participation in the opposition movement, she was fired on Aug. 7, 1980, five months before her scheduled retirement. Her colleagues started a strike, ultimately led by Lech Walesa, calling on management to put her back to work.

“Anna Walentynowicz is one of the mothers-founders of Solidarity, in a way a godmother of Solidarity,” Gdansk Mayor Pawel Adamowicz said by phone. “She became a catalyst. She embodies the protest against evil.”

Walentynowicz fought for equality, human dignity and truth, Adamowicz said.

She criticized Polish society as it emerged after the communist regime was abolished in 1989, because the change did not bring well-being to everyone, he said.

She declined the flowers that Adamowicz tried to hand her last year for her birthday, said Adamowicz’s spokesman, Antoni Pawlak.

Walesa called an end to the shipyard strike on Aug. 16, 1980, after management agreed to re-employ fired workers and raise wages. Walentynowicz opposed this move, demanding that protests should continue until all workers’ concerns were addressed.

This created a conflict between Walesa and Walentynowicz that communist-era secret services tried to use to discredit Walesa. She opposed helping the secret police damage Walesa, historian Slawomir Cenckiewicz said in an article about Walentynowicz published by Polish daily Rzeczpospolita on Aug. 13.

APRIL 12, 2010

Wall Street Journal: Clues Sought in Crash of Polish Plane http://online.wsj.com/article/SB10001424052702304846504575178401476272106.html?mod=googlenews_wsj

Many Russian Jets Lack Safety Equipment Common on Western Commercial Aircraft; No Engine Problems Reported

By ANDY PASZTOR and DANIEL MICHAELS

Pilots of the Polish air-force jet that crashed and killed a high-level government delegation while approaching a Russian military airport may have lacked key navigation aids and ground collision-warning systems routinely used by commercial flights around the world.

As investigators continued to pursue leads and began analyzing flight-data recorders recovered from the fiery wreckage of the Russian-built Tupolev 154, many details remained murky. Preliminary reports from the Smolensk-Severnyi military field indicated the 20-year-old plane clipped the tops of trees, plummeted to the ground and broke apart about half a mile short of the runway in dense fog. The plane's crew apparently had aborted a previous landing attempt.

Russian officials said that air-traffic controllers had advised the pilots to divert to one of several other airports. Russian media on Sunday quoted officials saying that early signs didn't reveal any engine problems or other aircraft malfunctions.

Even at this early stage, safety experts are pondering a basic question: Did Polish President Lech Kaczynski, his wife and the rest of the victims have some of the basic safety protections—both on board and on the ground—that safeguard nearly all airline passengers every time they land in a Western-built jet?

The investigation is unlike most: A military flight isn't governed by the United Nations rules that specify how the process is to be conducted. The U.N. rules, for example, would guarantee Poland access to all investigation work conducted by Russia. So far, Russia has invited Poles to participate as an act of goodwill, but national sensitivities around the crash could spark conflicts, with no clear rules for settlement.

Because the flight was operated by the Polish military and carrying diplomats, it didn't have to follow safety rules that govern commercial passenger flights.

With visibility reportedly at less than half a mile at the time, a commercial aircraft typically would have been relying on an instrument landing system providing its pilots a so-called glide slope to help safely descend toward the runway. In this case, according to some safety experts, preliminary reports indicate that the Polish jet may have been on a nonprecision approach, which would have given the pilots the location of the end of the runway but perhaps no clear depiction that their plane was losing altitude too quickly.

According to previous studies by the Flight Safety Foundation and other industry groups, nonprecision approaches are at least five times more likely to result in an accident or incident than full-blown instrument approaches when visibility is poor.

John Cox, a former U.S. airline pilot and currently an industry consultant who has investigated numerous crashes, said that over the years "there have been fewer and fewer of these types of accidents" as commercial airliners increasingly rely on instruments that "provide precise vertical guidance" to pilots. Some of these systems are so sophisticated that pilots can land when visibility is under 400 feet.

Mr. Cox said safety rules would have barred a large commercial jet from making a nonprecision approach to the Russian strip. Even pilots of a small business jet or private aircraft most likely would have tried to swoop down and determine visibility, he said, before risking a touchdown without advanced instrument landing aids.

Until now, perhaps the most renowned crash of a VIP jet on a nonprecision approach was the 1996 accident that killed then-Commerce Secretary Ron Brown and 34 other people in Croatia. The U.S. Air Force jet, a modified Boeing 737, used an improper approach and was flying too fast, investigators determined, when it strayed off course and crashed into a mountainside in bad weather near the Dubrovnik airport.

In August 1997, a Korean Air jetliner with 254 people aboard crashed into a mountain while flying a nonprecision approach into the Guam International Airport in darkness and rain. Investigators determined that with certain ground navigation aids out of operation, the captain became distracted, failed to properly keep track of the Boeing 747's position and then refused to pull up despite warnings from other crew members as well as from the on-board collision-avoidance system. There were 228 fatalities.

U.S. and North Atlantic Treaty Organization forces normally deploy special radars at remote airfields with minimal landing aids. The radars provide a glide slope and more precise landing assistance.

Other important safety equipment may never have been installed in the Tupolev's flight deck. Commercial jets built in the U.S., Europe, Canada and Brazil normally are equipped with ground-collision warning systems that give pilots repeated alerts—including a loud computer-generated voice advising them to "pull up"—if the plane is headed toward a collision with the ground. In many instances, such systems advise pilots 30 seconds or more before an impending crash.

Since the mid-1990s, when advanced ground-collision warning systems became standard on major Western-built commercial aircraft, crashes of properly functioning jetliners into mountains or while descending toward airports have all but disappeared.

While there hasn't been any official word about whether the Polish jet had such devices onboard, safety experts over the weekend said most Russian aircraft don't have them as standard equipment.

The ground-warning systems were mandated in much of the world, but aviation and military officials in the former Soviet Union balked at including them on jetliners because the equipment continually collects data about the terrain around airports and sends it to computers in the U.S., where the systems were developed. This was considered a potential security risk by ex-Soviet military authorities, according to one air-safety specialist.

Although the plane was 20 years old, it could easily have been retrofitted with the equipment. A spokesman for Honeywell International Inc., which developed the most advanced version of ground-collision warning devices, said Sunday that preliminary data indicated that the company's system wasn't installed on the Polish jet.

Advanced technology is no guarantee of safety. In 2002, a Russian Tu-154 passenger jet fitted with an advanced system to avoid midair collisions slammed into a similarly equipped cargo jet above Germany after a Swiss air-traffic controller incorrectly told both planes to do the opposite of what the automated equipment wanted to do to protect them. The crash killed 69 people.

The last high-profile Polish military crash happened in early 2008, when an air force cargo plane clipped trees and crashed less than a mile short of a runway at a base in the northwest part of the country, killing all 20 people aboard. Reports at the time indicated there was heavy rain and poor visibility at the field, and the pilots weren't using an instrument landing system.

Write to Andy Pasztor at andy.pasztor@wsj.com and Daniel Michaels at daniel.michaels@wsj.com

Moscow Times: Guilt by Association http://www.themoscowtimes.com/opinion/article/guilt-by-association/403712.html

12 April 2010By Richard Lourie

The month of March ended very badly for Russia, and the worst is yet to come.

On March 20, the opposition tried to organize its “Day of Wrath” under the slogan “Putin must go!” but it failed to convince or inspire. Attendance at rallies was sparse nationwide. The intelligentsia have yet to defines themselves in post-Soviet Russia, failing to define their own new role and what the new Russia can and should be.

The two suicide bombings in Moscow on March 29 were unfortunate for a number of reasons. The self-styled emir of the Caucasus Emirate, Doku Umarov, shares a fixation on Prime Minister Vladimir Putin with the opposition. He calls Putin a “terrorist” and the Federal Security Service a “criminal organization.” The bombing of the Lubyanka metro station was meant to avenge and taunt.

From the opposition’s point of view, the timing could not have been worse. Many Russians were bound to make a simple association: The opposition hates Putin, and the Islamist suicide bombers hate Putin. Our enemy’s friend is our enemy.

In fact, it was shortly after the bombings that State Duma Speaker Boris Gryzlov made some of those associations explicit and public. He linked Vedomosti and Moskovsky Komsomolets to the terrorists, claiming that they were “stewing in the same juices.” Robert Shlegel, a United Russia deputy, has proposed a bill to ban the media from reporting any statements by terrorists. “News about militants should consist only of reports about their destruction,” said Shlegel, who caused Umarov’s video to be removed from YouTube.

That others had made the association between the opposition and terrorism became clear on March 31. On the 31st of every month, the opposition gathers in support of Article 31 of the Constitution, which guarantees the right of free assembly. This time, however, many decided to pay their respects to the victims at the memorial shrines at the metro stations. Among them was the grande dame of the dissidents, Lyudmila Alexeyeva, 82, who was verbally and physically abused by a man who cried, “Are you still alive, bitch?” and cuffed her violently on the head.

That was caught on video and immediately posted on YouTube. It will, of course, never appear on Russian television, which in the hours immediately after the bombings gave only brief initial reports and continued with its regularly scheduled programming. This

frustrated, even infuriated, a certain percentage of the population desperate for further information.

Other associations were also being made: The security services offer no security, and the communications media do not communicate.

March 31 also marked the one-year anniversary of the second trial against former Yukos CEO Mikhail Khodorkovsky. In a recent essay, he describes the justice system as “legalized violence,” a conveyor belt in which anything but a guilty verdict is considered a “defective product.” He says that every year these injustices create thousands more who “loathe the system.” Khodorkovsky predicts that the current regime will be either intelligently reformed from above or bloodily destroyed from below. What surprises him most is that not even the ruling elite’s “instinct for self-preservation seems to be working properly.”

Khodorkovsky could be wrong about any future collapse. After all, the Soviet Union went out with a whimper, not a bang. Meanwhile, wrong associations are being made, wrong conclusions are drawn and wrong actions are taken. The Russian self-destruction machine ratchets up another gear.

Richard Lourie is author of “The Autobiography of Joseph Stalin” and “Sakharov: A Biography.”

Moscow Times: Medvedev Delivers Putin’s Brainchild http://www.themoscowtimes.com/business/article/medvedev-delivers-putins-brainchild/403715.html

12 April 2010By Anatoly Medetsky

PORTOVAYA BAY, Leningrad Region — Prime Minister Vladimir Putin was nowhere in sight Friday when international leaders and businessmen arrived here for the start of construction on Nord Stream, an ambitious gas pipeline that many attribute to his years of tenacious lobbying.

Instead, President Dmitry Medvedev took center stage at the pipeline's starting point, some three hours by bus from St. Petersburg, where a Gazprom-led consortium is building a facility that will generate pressure to push Russian gas beneath the Baltic Sea to Germany.

The prime minister's no-show had some participants at the ceremony scratching their heads. But analysts said Putin's decision to shun the event looked like a calculated move, building his political persona as a decision maker with no time for pomp and circumstance.

Medvedev spent about an hour at the gas compressor station to celebrate the laying of the first pipes off the Swedish coast, which actually had happened a day earlier, according to Nord Stream managers. The ceremony ended almost five years of tedious preparations and negotiations since Gazprom, E.On and BASF first signed a deal in September 2005 to build the new route.

Dutch energy company Gasunie has since joined the consortium, and France's GDF Suez is set to formally become another partner in the first half of May, a source familiar with the situation said Friday.

The 7.4 billion euro ($10 billion) project, designed to carry 55 billion cubic meters of gas, faced early skepticism in Europe over costs and mounting Russian influence on the continent's energy market.

But then-President Putin recruited a close ally, former German Chancellor Gerhard Schroeder, to lead the international consortium and to secure financing and support in Europe. Putin personally applied his immense political muscle to secure construction permits from Finland, Denmark and Sweden, whose territorial waters the project will cross.

Since becoming prime minister, Putin has continued his vigorous support for Nord Stream and for South Stream, a similar project that would pass under the Black Sea. Both pipelines were envisioned as ways to reduce transit risks as Russian gas flows to its biggest consumers in Western Europe.

“Putin has built a strong reputation as the father of the streams,” said Yevgeny Minchenko, director of the International Political Studies Institute, a think tank.

Some guests at the Friday ceremony, which brought together bankers, executives from partner companies and officials from the European countries involved, exchanged baffled comments about why Putin might have shied away.

Arriving by helicopter on a makeshift concrete helipad, Medvedev walked into white tents thrown up on the site to watch a short movie about the technology that Nord Stream will use. The area, a sand-blanketed clearing in a pine forest, was largely silent as cranes and bulldozers had suspended their work for the day.

In a speech afterward, Medvedev stressed the importance of the route for Europe's energy security, dropping hints about the unreliability of some transit countries, an apparent reference to Russia's trade disputes with Ukraine and Belarus in recent years, which have disrupted gas flows to Europe.

With Gazprom increasingly having to compete with lower-priced fuel on the European spot market, Medvedev made sure to note that Gazprom would offer “acceptable and reasonable” rates for the fuel from Nord Stream. The project's first line is scheduled to begin supplies in 2011.

The president also echoed Putin by taking a poke at the protracted environmental considerations by Sweden, Finland and Denmark, which delayed the start of construction by a year.

“Unprecedented preparatory work has been done,” he said. “Frankly speaking, it sometimes seemed to me that it would never end. But it did.”

Following a few more congratulatory speeches, including one by European Union Energy Commissioner Guenther Oettinger and a pre-recorded video message from German Chancellor Angela Merkel, a broadcast showed two workers in green overalls and snow-white gloves welding together two pipes outside the tent.

Medvedev, flanked by Gazprom chief Alexei Miller and Schroeder, walked to the pipes — one bearing the name Russia and the other Europe — and wrote “best of luck” with a white marker pen.

Putin chose to be in Novosibirsk on Thursday and Friday to hold a meeting on higher education and inspect how the cash-for-clunkers program was functioning in the regions.

Putin also appeared to drop a hint as to why he was skipping the long-delayed Nord Stream ceremony Thursday, when Mordovia's president, Nikolai Merkushkin, invited him to visit the republic this summer to cut a ribbon for new university buildings.

“There are other good people around to cut ribbons,” Putin replied.

While Putin may not have been referring to Medvedev, the phrase was a typical example of how the prime minister likes to show his supremacy, said Konstantin Simonov, director of the Foundation for National Energy Security, a think tank.

“'It's clear that you wouldn't have been able to manage this if it weren't for me, but it's all right to entrust at least something to you,'" Simonov said, suggesting this was Putin's thinking on skipping the pipeline opening.

“This way, he underlined his role in this project in a more elegant manner,” Simonov said. “This way of demonstrating his complete domination over others has a jesuit shade.”

Since becoming president in May 2008, Medvedev also has appeared at the grand openings of two other major gas projects that stem from Putin's time in the Kremlin: the start of production at the giant Yuzhno-Russkoye field and the launch of a liquefied natural gas plant in Sakhalin.

Russia and Austria are scheduled to sign an intergovernmental agreement on the construction of South Stream by the end of this month, Gazprom chief Miller told reporters on Friday. Austria is the final country that Gazprom has asked to join the project.

Miller also said the severe winter led to an increase in his company's output, prompting the world's largest gas producer to boost its 2010 production estimate to 529 billion cubic meters from 521 bcm, or by 1.5 percent.

Apa.az: Ukraine, Russia to start actual work on border demarcation in 2010http://en.apa.az/news.php?id=119717

[ 11 Apr 2010 07:51 ]

Baku-APA. Ukraine and Russia agreed to start actual work on demarcation of their land border and delimitation of the maritime boundary, APA reports quoting News.xinhuanet.com web-page."I believe Ukraine and Russia could find a mutually acceptable approach on the issue of delimitation of the Kerch Strait, Black Sea and Caspian Sea," Ukrainian Foreign Minister Kostiantyn Hryschenko told reporters after a meeting with visiting Russian Foreign Minister Sergei Lavrov on Saturday.The two sides also discussed issues related to Russian Black Sea Fleet’s stationing in the territory of Ukraine, trans-boundary cooperation and customs clearance procedures, Hryschenko said."We agreed today that we will be tackling the issue of land border demarcation in a practical sense already this year. The discussion of the delimitation of the maritime boundary is advancing quite successfully," Lavrov said."We will start actual border demarcation work this year," he added.Asked about a Ukrainian request for higher rent payment for Russian naval base in Crimea, Lavrov said that Russia is willing to consider any Ukraine’s proposals on cooperation.Lavrov arrived here Friday for a two-day working visit to Kiev.

Moscow Times: Putin Discusses $6Bln Loan to Ukraine for Reactors http://www.themoscowtimes.com/business/article/putin-discusses-6bln-loan-to-ukraine-for-reactors/403689.html

12 April 2010Combined Reports

Prime Minister Vladimir Putin said Saturday that Russia might lend $5 billion to $6 billion to Ukraine to construct two nuclear reactors, while promising to consider a new deal on gas supply prices.

"We discussed cooperation on nuclear energy … a possibility is to lend $5 billion to $6 billion to construct the third and fourth reactors for the Khmelnitsky nuclear power station," Putin said after a meeting with his Ukrainian counterpart, Mykola Azarov, at Vnukovo Airport.

Both leaders expressed their condolences to the people of Poland over the Saturday morning plane crash in Smolensk that killed President Lech Kaczynski and many other senior dignitaries.

Azarov also said he won a pledge from Putin to remove quotas on Ukrainian large-diameter pipes, a key export for the country that is used in the oil and gas industry.

Putin "promised to make the necessary orders to the relevant ministries. I hope this matter will be resolved and that this matter will be dropped from the difficulties in our relations," Azarov said, referring to the trade barriers.

"I'm very happy to note, above all, the constructive, objective approach from Prime Minister Vladimir Putin," he said, according to a transcript posted on the Russian government web site. "I hope that we really will be able to find solutions in the next few days to the problems that we discussed today."

The two prime ministers also discussed the price of Russian gas exports to Ukraine, an issue that has long been a bone of contention between Moscow and Kiev, but they did not reach a new agreement.

Putin said the Ukrainian proposals were interesting.

"I admit we can achieve a solution, to a large extent it is a matter of calculation. ... It needs to be worked out," Putin said.

Azarov, who was tapped to head the government following the victory of Viktor Yanukovych in Ukraine's presidential election earlier this year, said he was hoping for an imminent agreement.

"I hope we can find a solution in coming days," he said.

Russia and Ukraine signed an agreement on gas prices in 2009, but the new leadership in Kiev now says the price of gas is too high.

In previous years, the issue has threatened to disrupt supplies to the rest of Europe. About 80 percent of Russian exports to Europe go via Ukraine, although new gas routes are under construction.

Azarov said last week that Russian gas is currently too expensive and, if the price rose too high in the second quarter, Ukraine's chemical industry would grind to a halt.

Ukrainian Energy Minister Yuri Boiko and Gazprom chief executive Alexei Miller agreed Thursday that Ukraine would raise its gas imports by 10 percent this year, to 36.5 billion cubic meters. In 2009, Kiev negotiated an import cut to 26.8 bcm, from 49 bcm the previous year.

(Reuters, MT)

Russia Today: 12 April, 2010 in Russian Newspapershttp://rt.com/Top_News/Press/eng.html

Izvestiya: A nuclear-free spring, American-styleToday is the first day of the Nuclear Security Summit in Washington, DC, which will be attended by President Dmitry Medvedev

Melor Sturua (Washington)

The National Cherry Blossom Festival is being held in Washington, DC. A local magazine published a picture of an American girl, wearing a Japanese kimono on its cover. The photograph is accompanied by text that reads: “Thank you, Japan, for the cherry blossoms, for the beauty and friendship”. This forces some to unwittingly recall that, 65 years ago, American nuclear bombs were dropped on Hiroshima and Nagasaki. This marked the beginning of the nuclear era. If it were not for this event, the current summit would not be taking place.

Trud: All pilots served in the militaryElena Goncharova, Anton Zainiev

Trud learned who the pilots of Polish aircraft №1 were, as well as what security measures were present on board Kaczynski’s presidential plane.

Security measures on board of the presidential aircraft do not significantly differ from those of civilian airplanes. They are not fitted with an ejection seat system, parachutes, or other emergency rescue equipment.

Eighty percent of plane crashes take place during takeoff or landing, in other words, very quickly. There are no means that can ensure passenger survival in such conditions. Often, even pilots learn about the approaching end of their life just seconds before the crash. The main safety guarantee for №1 air jets -- is having qualified pilots and dispatchers.

Moscow Times: Today in Vedomostihttp://www.themoscowtimes.com/vedomosti/Issue 4369. Last Updated: 04/12/2010

Transneft Could Issue IPOBy Anna Peretolchina

Investors are not waiting until the state asks what they would like to buy from it. Transneft’s minority shareholders have proposed that officials issue an IPO for the company, which is seeking money for a new pipeline.

President, Ministers to Publish Income StatementsBy Natalya Kostenko and Maxim Glikin

The Kremlin and the government have agreed to publish information simultaneously about the income of the country's leadership for 2009. The reports may even appear on Monday.

Paying for CreditBy Anna Baraulina and Dmitry Kazmin

The Central Bank believes that companies distort their financial statements and is encouraging them to post their statements on the FTS’s web site. Businesses do not like the idea.

Editorial: Russia and Poland at turning pointVedomosti

Lech Kaczynski’s death is very inconvenient for Russia. He died on Russian territory — on a Russian-made plane that had been repaired in Russia — on his way to Katyn to commemorate 70 years since Polish officers were shot.

2010-04-12 07:54 Reuters: PRESS DIGEST - Russia - April 12 http://www.iii.co.uk/news/?type=afxnews&articleid=7835309&subject=companies&action=article

MOSCOW, April 12 (Reuters) - The following are some of the leading stories in Russia's newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

People in Moscow mourn the Polish president's delegation who died in an airplane crash near Smolensk on Saturday, the paper writes. The paper runs an interview with the deputy head of the Kyrgyz interim government, who says Kyrgyzstan has $50 million in the treasury. Ukrainian Prime Minister Nikolai Azarov asks Russia for a $4 billion discount on gas prices in 2010, the daily says.

VEDOMOSTI

www.vedomosti.ru

Russia's air carrier Aeroflot may earn an extra 10-15 percent on summer tourist flights, the daily writes. Wal-Mart is still interested in acquiring a stake in Russian hypermarket chain Lenta from the investment fund TPG, the paper says. Insurance companies in Russia raised prices for medical insurance by up to 50 percent in 2010, the paper reports.

VREMYA NOVOSTEI

www.vremya.ru

Gazprom's CEO Alexei Miller will hold talks with the CEO of Italy's oil and gas group Eni Paolo Scaroni on Monday, the paper writes.

ROSSIISKAYA GAZETA

www.rg.ru

Russia's Foreign Minister Sergei Lavrov has proposed suspending the adoption of Russian children by Americans until an agreement on adoption is signed, the daily says. Keywords: PRESS DIGEST Russia April 12 (--Writing by Ludmila Danilova, Reuters Messaging: ludmila.danilova.reuters.com@reuters.net, +7 495 775 1242)

COPYRIGHT

Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

BBC: Ice skating funding melts away in Russia http://news.bbc.co.uk/2/hi/in_depth/business/2009/business_of_sport/8613999.stm

By Rafael Saakov and Anastasia Uspenskaya BBC Russian Service

It is just four years until Russia hosts the Winter Olympics in Sochi, but already questions are being asked about funding issues.

At the same time a golden era of Russian figure skating may be coming to an end, after 60 years of the nation's competitors enjoying domination on the world's ice arenas.

At the recent games in Vancouver - for the first time since 1992 - Russia failed to take the gold in the men's discipline; in the ice-dance the Russian couples also failed to win gold; and for the first time since 1964 no Russian pairs made it even to the podium.

And today's sporting and financial problems are being put down by some to the economic upheaval that followed the demise of the Soviet Union in the early 1990s.

The former head of Russia's Skating Federation, Valentine Piseev, who was forced to stand down after the Vancouver failure, says the lack of medals should not have been a surprise.

"The majority of skaters who performed in the Olympics started their careers in 1990s, when the country was trapped in very difficult economic and social conditions," he says.

"Sport was the last thing people could think about, junior sport schools were closing down, but the biggest setback for us was the departure of our best coaches abroad.

"Our highly qualified coaches were the main power of Soviet figure skating. But the reality was that our coaches were paid per month the same as a specialist in the US was paid just for one session."

'Many problems'

But despite Mr Piseev's opinion that the three medals won in Canada were as much as Russia could have expected, others disagree.

The 2006 Olympic skating champion, Yevgeny Plushenko, and others want more to be spent on training and financial support for Russia's figure skaters.

He says that demands for Russia to win gold in four ice skating disciplines in Sochi will need a lot of planning.

"My question is… how exactly are we going to do that?" he says.

"Young boys and girls - those who are going to perform in Sochi in 2014 - come to me with these questions - 'will we get any money at all for Olympic training, when, and how much?'

"There is nothing for them at the moment. They wake up in the morning asking themselves what they are going to eat. Some may say this is not true. But... it is true. There are so many problems."

Overall during the last year Russia's figure skating federation spent over 140 million roubles ($4.8m; £3.1m) ahead of the recent games. But is it still enough?

Expensive pastime

Recent World Championship bronze medalist Maria Mukhortova says a training overhaul is needed and says in recent times "we didn't even get the appropriate sum of money for Olympic preparations which our coach was hoping for".

Responding to funding shortfall allegations, Mr Piseev has revealed figures that show the cost of pre-Winter Olympic training for Yevgeny Plushenko - the main gold-medal hope of the Russian team - was over six million roubles.

But Pluschenko is the world-famous star. What about the others?

Maria Mukhortova remembers what she had to go through before joining the top-rank of Russian ice skating, coming from a small town at the age 13.

"I come from a quite poor family," she says.

"We faced so many problems - we had no money, no food. My coach helped us a lot. He gave us some money so that I, my mother and grandmother could survive. We lived in a single room, just 16 metres in size".

Many say that the root cause of Russia's failure at the Vancouver Olympics lies at the junior level of the sport, with Russian figure skating schools too expensive for most people.

'Invest in junior sport'

One exception is the school of the first ever Russian World Champion in women's single figure skating, Maria Butyrskaya. Her school is sponsored by the Moscow Department of Sport.

"Ice is essential but expensive," she says.

"One hour's rental of an ice rink costs up to 12,000 roubles - in order to train well our school needs at least six hours a day.

"If it wasn't for the sport authorities, parents would literally have to buy ice for their children. We can't even provide kids with the costumes for performances - parents take it upon themselves.

"If we invest in junior sport, if we pay more attention to it, we will no doubt once again have Olympic champions."

Meanwhile, there is a feeling among many skaters that too much financial support is targeted towards football and ice hockey, leaving it hard for ice skating to compete when it comes to things like attracting sponsors.

For the amateur sport, there is another problem. With competitive coaching salaries still relatively small, many successful former Russian figure skaters find themselves drawn to showbusiness.

Glamorous TV ice-shows are enormously successful in Russia.

"Figure skating is a very good business now," says Iliya Averbukh, the director of one of the top ice-shows on Russian TV, and a former Olympic silver medalist.

"We're touring 54 cities and all the performances are sold out. Unfortunately, most people prefer to watch figure skating stars in TV shows rather than competing in championships."

TV sponsorship

It's a paradox, but in a country where sport has a huge patriotic following, sponsors are not in a hurry to spend money on future champions.

They sponsor figure skating shows on TV, but are less interested in those who would compete for Russia during the next Winter Olympic games in the Russian city of Sochi.

"We have a pool of 20 companies who sponsor our TV shows," says Averbukh.

"They're keen to push cosmetic brands, goods for women, drinks, sportswear."

Those sponsors pay anything between $200,000 and $1m.

So there are many challenges facing the next head of Russia's figure skating federation.

But who should it be? A former skater who knows the sport inside-out? Or a businessman, who will be able to invest real money into a sport which for many decades was the pride of a big nation?

National Economic TrendsApril 12, 2010 11:18

Interfax: Russian govt to consider main 2011-2013 tax avenueshttp://www.interfax.com/newsinf.asp?id=157848

MOSCOW. April 12 (Interfax) - The Russian government will in a very few days be addressing the tax-policy directions for 2011-2013, State Secretary and Deputy Finance Minister Sergei Shatalov said on Monday.

"In the very next few days, the government will consider the main directions for tax policy that will provide a vector for movement, in which the tax system will be changing," Shatalov said.

Cf

RBC: Gov't to consider changes to tax policy

http://www.rbcnews.com/free/20100412115114.shtml

      RBC, 12.04.2010, Moscow 11:51:14.The Russian government is expected to review the key provisions of the country's taxation policy for 2011 and 2012-2013, Deputy Finance Minister Sergei Shatalov announced at a conference organized by the Russian Union of Industrialists and Entrepreneurs.

      According to the document, the government's key goal is to improve tax legislation in order to promote innovations by adjusting taxation mechanism in accordance with the new challenges and needs of innovative companies, instead of introducing tax incentives.

2010-04-12 07:53 Reuters: Russian rouble hit new highs as c.bank shifts boundary http://www.iii.co.uk/news/?type=afxnews&articleid=7835306&subject=markets&action=article

MOSCOW, April 12 (Reuters) - Russia's central bank shifted the rouble's floating trading band for the 27th time since mid-February on Monday, allowing the currency to hit fresh 16-month highs versus the basket, dealers said. The central bank moved its floating corridor to 33.65-36.65 roubles against the euro-dollar basket from 33.70-36.70 after purchasing around $700 million at the previous boundary, dealers said.By 0633 GMT, the rouble had climbed as far as 33.6658 versus the basket, according to Reuters data -- its strongest since December 2008.Trading was active on the MICEX exchange as many players were closing long positions in dollars, taking the U.S. currency below 29 roubles for the first time since November 2009 .

(Reporting by Andrey Ostroukh; editing by Toni Vorobyova) Keywords: RUSSIA ROUBLE/BAND

(andrey.ostroukh@reuters.com, +7 495 775 12 42)

12.04.2010 - PRIME-TASS/banki.ru

Cbonds: Russian Finance Ministry: budget deficit totals Rub 307.6 bln in Q1http://www.cbonds.info/all/eng/news/index.phtml/params/id/459020

PRIME-TASS. A deficit of the federal budget in Russia amounted to Rub 307.6 bln in January-March 2010. As Prime-TASS reported, the finance ministry said this in a statement on the preliminary execution of main indicators of the federal budget. Initial budget deficit came to Rub 236.48 bln in January-March 2010.

During the January-March period of 2010 federal revenues came to Rub 1.95 tln or 28.1% of the total amount of the federal budget, as approved by the Federal Law “On the Federal Budget for 2010 and the Planning Period of 2011 and 2012”. Spending under the cash fulfillment of the budget totaled Rub 2.26 tln or 22.8% of the adjusted budget target.

In the first quarter of 2010 the Federal Tax Service (FTS) wired Rub 851.05 bln to the federal budget or 31.2% of the target for 2010 budget revenues. The Federal Customs Service (FCS) brought to the federal budget Rub 888.83 bln or 24.3% of the projection for federal revenue. The Federal Agency for State Property Management wired to the budget a total of Rub 8.48 bln or 14.9% of the forecast for allocations to the budget.

Other federal bodies transferred to the budget Rub 204.9 bln, i.e. 40.7% of the forecast for 2010 budget revenues. Revenues excluding income derived from the management of the Reserve Fund’s and the National Welfare Fund’s financial resources came to Rub 105.57 bln or 26.1% of the forecast for budget revenues.

Bloomberg: Russian Second-Quarter Growth Outlook Raised to 8.3% by RenCap http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axo2_Ycc4KXA

By Maria Levitov

April 12 (Bloomberg) -- Russia’s economy may expand an annual 8.3 percent in the second quarter, more than previously forecast, on domestic demand and aluminum prices, said Moscow- based Renaissance Capital.

The investment bank raised its estimate from 7.9 percent after higher wages, improved retail services and a decline in unemployment, as well as higher aluminum prices and a larger trade surplus, fueled growth, it said in an e-mailed statement today. The economy probably grew 7.5 percent in the first quarter, according to RenCap.

“The biggest contributors to the brighter outlook were factors suggesting that domestic demand is finally rebounding,” Alexei Moiseev, RenCap’s senior economist, wrote in the statement. “These factors raise tentative hopes that the economic recovery in Russia may be based on more than just the export of expensive commodities.”

The Russian economy may expand as much as 4.5 percent this year, according to Deputy Economy Minister Andrei Klepach. Consumer confidence rose in the first quarter after the unemployment rate fell in February for the first time in four months, reaching 8.6 percent. The average monthly wage gained an annual 2.9 percent in the month when the effects of inflation are stripped out, boosting retail sales. Russian service industries from banks to supermarkets expanded in March at the fastest pace since October, signaling “renewed momentum,” VTB Capital’s Purchasing Managers’ Index showed.

Record Contraction

The economy contracted a record 7.9 percent in 2009, the “hardest year” since Russia’s 1998 financial crisis, according to President Dmitry Medvedev. The contraction was smaller than the government originally forecast because oil’s 83 percent rebound at the end of last year helped buoy the economy of the world’s biggest energy exporter.

Commodities prices are also helping lift economic growth this year. Aluminum for three-month delivery on the LME climbed 1 percent to $2,382 a ton on April 9 after reaching $2,397, the highest intraday price since Oct. 2, 2008. Russia is the world’s second biggest aluminum producer after China, according to the U.S. Geological Survey.

To contact the reporters on this story: Maria Levitov in Moscow at mlevitov@bloomberg.net

Last Updated: April 12, 2010 02:00 EDT

12.04.2010 - RBC Daily/banki.ru

Cbonds: Eurobonds offered by Russian issuers reach nearly $8 blnhttp://www.cbonds.info/all/eng/news/index.phtml/params/id/458994

RBC DAILY. Russian businesses have taken full advantage of growing investor interest in high-risk assets. In the first quarter of 2010 Eurobonds placed by Russian issuers nearly reached $8 bln against only $15.8 bln raised in the West last year, RBC daily wrote on Monday.

This year apart from corporate bonds Russia’s sovereign bonds are intended for

placement, with first tranches equal to $3—4 bln. Analysts from the Bank of Moscow think currently demand for high-yield bonds is growing, as a result of which these Eurobonds could be offered at decent rates.

Bond placements of second-tier businesses and greenfield entities are also on the rise. Bank Zenit senior trader Alexander Surkov believes that upcoming placements could lend substantial support to the Russian stock market. He made reference to an equity research report released by JP Morgan, according to which Russian stocks are more undervalued compared to debt market instruments than on other emerging markets. “Most likely, the discounting rate for most valuation models will change and this will push up stock prices," Surkov concluded.

Moscow Times: Federal Spending Increases While Strong Ruble Causes Concern http://www.themoscowtimes.com/business/article/federal-spending-increases-while-strong-ruble-causes-concern/403700.html

12 April 2010Bloomberg

The federal budget's three-month shortfall rose to 307.6 billion rubles ($10.5 billion), or 3.2 percent of gross domestic product, from a gap of 194.6 billion rubles in February, the Finance Ministry said Friday, citing preliminary figures.

Revenue totaled 1.95 trillion rubles at the end of March, or 28 percent of the government’s target for the year, while spending was 2.26 trillion rubles, or 23 percent of the plan, as the government boosted spending.

The government may run a budget deficit this year of 6 percent of GDP, less than the official forecast of 6.8 percent, Finance Minister Alexei Kudrin said April 1. Still, a stronger ruble is offsetting the benefits of higher-than-expected prices for oil, Russia’s biggest export earner.

“Rising oil prices increase revenue, while the strengthening ruble reduces it,” he said. “For every dollar that Russia makes, it will lose 2 to 3 rubles on the conversion.” The ruble may reach 28 or 29 per dollar this year, compared with the “expected” rate of 33.9, Kudrin said.

The government ran a budget deficit of 5.9 percent of GDP last year, its first shortfall in a decade.

The government will start the road show for its first sovereign eurobond in more than a decade on Tuesday in Germany, a banking source said Friday.

Russia plans to tap international markets for up to $17.8 billion in 2010 to plug its budget gap.

The roadshow will start in Frankfurt and Munich on Tuesday, followed by London and Singapore on Wednesday, London and Hong Kong on Thursday, Boston on Friday, Los Angeles on April 19, San Francisco the next day and end in New York on April 21, another banking source said. (Reuters)

Moscow Times: Central Bank Head Positive on 2010 Outlook http://www.themoscowtimes.com/business/article/central-bank-head-positive-on-2010-outlook/403669.html

12 April 2010Reuters

Central Bank Chairman Sergei Ignatyev gave the economy a mostly clean bill of health on Friday and said a rate cut this month was not a done deal, following a yearlong easing campaign to help Russia out of recession.

Banks have started to increase lending, bad loans are falling, inflation should hit targets and the ruble is behaving, Ignatyev said. He later added that the Central Bank had not yet decided whether to cut rates this month, despite expecting that inflation may come in lower than it did in April 2009.

But Ignatyev warned that a surge in imports could affect Russia's balance of payments and exchange rate, and he said it was too soon to call nascent credit growth a trend.

Russia is recovering from its deepest slump in 15 years, bolstered by improved global demand and higher prices for oil, which have in turn helped propel the ruble to 15-month highs.

Contrary to some analysts' expectations, the Central Bank has not stepped up its regular currency market interventions, allowing the ruble to push higher and increasing exchange rate flexibility in preparation for an eventual move to a free float.

"The exchange rate is behaving itself quite acceptably," Ignatyev told a banking conference. "By my estimates, the real exchange rate remains a little lower than the trend formed in the pre-crisis period."

The economy is not yet ready for a free float but can come very close to it in the next year to year and a half, he said, adding that the exchange rate would gradually become "more and more flexible."

A stronger ruble makes it more difficult for the industrial sector to compete against foreign goods, and it has also encouraged strong growth in imports, which Ignatyev said rose 28 percent year on year in March.

"Fast-growing imports can have a serious impact on the balance of payments and on the dynamics of the ruble," he said.

On the flip side, the strong ruble has helped keep inflation in check, in turn leaving room for the Central Bank to support growth through a series of interest rate cuts.

Although M2 money supply surged 32 percent in the year to April 1, Ignatyev said its dynamic was not currently of serious concern and was consistent with the target of reducing inflation to 6.5 percent to 7.5 percent this year, from 8.8 percent in 2009.

In theory, that gives the Central Bank room to further cut the refinancing rate from the current historic low of 8.25 percent while keeping real rates positive. Analysts had been expecting a 25-basis-point rate cut this month followed by another move, the last in the cycle, by midyear.

But Ignatyev signaled that this was by no means a done deal, saying he "did not yet know" whether rates will be cut this month.

"In April [inflation] may be lower than in April of last year … but that does not mean it will automatically allow us to cut rates," he told a news conference, adding that the decision would in part depend on March industrial production.

He reiterated that in the second half of the year, when inflationary pressures are rising, policy may be tightened.

Ignatyev's comments — both on rates and on the move toward greater exchange rate flexibility — may further support the ruble, which ended trading for the day as the remarks were published.

Russia has already cut rates 12 times in the past year to stimulate lending, which finally picked up in March.

"For now, it is hard to say whether this is an accident or a break in the trend," Ignatyev said, reiterating the Central Bank's forecast for 15 percent credit growth this year.

Ignatyev partially blamed the slow pickup in lending on the bad quality of borrowers and the high cost of banks' liabilities — factors that analysts at Trust Bank said could not be fixed by rate cuts.

Russia's banks hope to return to pre-crisis profitability this year after some banks, including second-biggest lender VTB, slipped into the red in 2009.

"The problem of bad debts is abating slowly, the economy is gradually starting to grow," Ignatyev said, adding that no new official measures are needed to tackle nonperforming loans. "I currently don't see serious systemic risks."

Business, Energy or Environmental regulations or discussions

2010-04-12 07:48 Russian markets -- Factors to Watch on April 12 http://www.iii.co.uk/news/?type=afxnews&articleid=7835299&action=article

MOSCOW, April 12 (Reuters) - Here are events and news stories that could move Russian markets on Monday.

You can reach us on: +7 495 775 1242

STOCKS CALL (Contributions to moscow.newsroom@reuters.com):

Troika: Russian stocks rose Friday as oil posted gains and fears about Greece abated. We are opening our prices up 1.5 percent this morning.

Aton: We expect the market to open up against a positive external backdrop.

EVENTS (All times GMT):

MOSCOW - Russia holds day of mourning for Polish President Lech Kaczynski and much of the country's political and military elite who perished in a plane crash in Russia.

MOSCOW - Chief of General Staff Nikolai Makarov holds press conference dedicated to new START treaty -1100

MOSCOW - Director of Federal Narcotics Control Service holds press conference on threat from Afghan drugs -0800

MOSCOW - Senior officials attend Russian Business Week conference. Speakers include Finance Minister Alexei Kudrin, Sberbank CEO German Gref, Central Bank First Deputy Chairman Alexei Ulyukayev.

MOSCOW - UC RUSAL 2009 financial results

MOSCOW - Magnit March trading update

MOSCOW - Globaltrans 2009 financial results

IN THE PAPERS:

Wal-Mart is still interested in acquiring a stake in Russian hypermarket chain Lenta from investment fund TPG, business daily Vedomosti reports citing unnamed sources.

TOP STORIES IN RUSSIA AND THE CIS: TOP NEWS:

POLISH PRESIDENT KILLED IN RUSSIAN PLANE CRASH KYRGYZ PRESIDENT ASKS FOR UN PEACEKEEPERS U.S. HALTS TROOP FLIGHTS FROM KYRGYZ BASE COMPANIES/MARKETS: ROUBLE AT NEW HIGHS, POISED FOR MORE GAINS RUSSIA TO HOLD EUROBOND ROAD SHOW APRIL 13-21 MAGNIT SALES SOAR IN MARCH ON NEW SHOPS X5 SALES GROWTH SLOWS, LFL HOLDS NUTRITEK FEARS BANKRUPTCY, DELAYS SPO AGRI BANK MAY SELL 30 BLN RBLS BOND IN H2 ECONOMY/POLITICS: UPBEAT RUSSIA C.BANK MAY NOT CUT RATES IN APRIL BRIC TO DISCUSS IMF SDRS USE AS GLOBAL UNIT RUSSIA MAY LEND $5-6 BLN TO UKRAINE FOR NUCLEAR RUSSIA JAN-MARCH BUDGET DEFICIT 3.2 PCT/GDP RUSSIA FEB TRADE SURPLUS $15.2 BLN KAZAKH JAN-MARCH INDUSTRY OUTPUT UP 11.5 PCT SUICIDE BOMBER KILLS ONE IN RUSSIA'S SOUTH TEN DIE AS RUSSIAN HELICOPTER HIT BY AVALANCHE ENERGY: N.STREAM UNMOVED BY SHALE GAS, BUILDING STARTS GAZPROM PLANS TO PRODUCE 529 BCM GAS IN 2010 TNK-BP '10 EXPLORATION BUDGET TO REACH $400 MLN ZHAIKMUNAI AIMS FOR GAS SALES TO BEGIN IN SUMMER COMMODITIES: RUSSIAN 2010 SOWING AREA SEEN DOWN ON YEAR

MARKETS CLOSE/LATEST:

RTS 1,630.5 -0.08 pctMSCI Russia 879.8 +1.85 pctMSCI Emerging Markets 1,044.7 +0.07 pct

Russia 30-year Eurobond yield: 4.937/4.908 pct

EMBI+ Russia 138 basis points over

Rouble/dollar 28.9550

Rouble/euro 39.4800

NYMEX crude $85.19 +$0.27ICE Brent crude $85.22 +$0.39

Bloomberg: Russia Stocks Gain Second Day as Greece Bailout Boosts Oilhttp://www.businessweek.com/news/2010-04-12/russia-stocks-gain-second-day-as-greece-bailout-boosts-oil.html

April 12, 2010, 4:22 AM EDT

By Alex Nicholson

April 12 (Bloomberg) -- Russian stocks rose for a second day as oil prices advanced after European governments offered a $61 billion rescue package for Greece and a report showed China increased crude imports in March.

OAO Rosneft, the country’s biggest oil producer, and OAO GMK Norilsk Nickel, its largest miner, led the advance. The 30- stock Micex Index added 0.8 percent to 1,509.48 at 11:43 a.m. in Moscow.

Oil climbed for the first time in four days as the dollar depreciated and the euro gained after European governments offered debt-burdened Greece a rescue package. China increased oil imports by 29 percent in March from a year earlier as the country’s economy recovered, according to customs data released April 10. Crude oil for May delivery gained as much as 79 cents to $85.71 a barrel in New York

“We’ve got a stronger euro on the pledge of aid to the Greeks and that underpins a higher oil price,” said Tom Mundy, strategist at Renaissance Capital in Moscow.

A weaker dollar boosts the appeal of commodities as an alternative investment. The ruble traded 0.6 percent stronger at 28.9759 per dollar, its highest level since November. The currency declined 0.6 percent against the euro, leaving it little changed at 33.7073 versus the central bank’s euro-dollar basket.

--Editors: John Kohut, Gavin Serkin.

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

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

Bloomberg: Gazprom, TMK, Razgulay Group: Russian Equity Market Preview http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ayxhGy8dty5c

By Maria Levitov

April 12 (Bloomberg) -- The following shares may have unusual price changes in Russian trading. Stock symbols are in parentheses and prices are from the previous close unless otherwise noted.

The 30-stock Micex Index advanced, closing 1.4 percent higher at 1,496.88 on April 9. The dollar-denominated RTS Index rose 1.9 percent to 1,631.81.

OAO Gazprom (GAZP RX): Russia will consider Ukraine’s “interesting proposals” on gas cooperation, Prime Minister Vladimir Putin said on April 10 after meeting with Ukrainian Prime Minister Mykola Azarov. Gazprom rose 0.4 percent to 175.19 rubles.

OAO TMK (TRMK RX): Russia and Ukraine discussed Ukrainian pipes manufacturing on April 10 after Russia stopped duty-free import of Ukrainian welded pipes earlier this month. Putin promised to give orders to “strike this question from our problematic issues” list, Azarov said without providing details. TMK, Russia’s largest pipes-maker for oil and gas producers, gained 0.8 percent to 164.38 rubles.

OAO Razgulay Group (GRAZ RX): Russian sugar output will rise to 5.6 million metric tons this year, or 11 percent more than previously forecast, RIA Novosti reported on April 9, citing Sugar Producers’ Union Chief Andrei Bodin. Razgulay gained 2.48 percent to 62.70 rubles.

To contact the reporter on this story: Maria Levitov in Moscow at mlevitov@bloomberg.net

Last Updated: April 11, 2010 22:00 EDT

UPDATE 1-Globaltrans sees recovery after 2009 profit fallhttp://in.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idINLDE63B09C20100412

Mon Apr 12, 2010 12:22pm IST

* Sees sustained recovery in Russian freight market

* Says Q1 2010 market turnover grew, still below pre-crisis

* Says full-year net profit down 15 percent at $121 mln

(Adds CEO comment, detail)

MOSCOW, April 12 (Reuters) - Globaltrans Investment (GLTRq.L), Russia's largest private rail freight operator, expects key markets to recover this year, it said on Monday after reporting a 15 percent drop in 2009 net profit to $121 million.

The company said the early months of 2010 had shown growth from the previous year, although the exceptionally severe Russian winter had kept overall market activity below pre-crisis levels.

"We are seeing sustained recovery in the Russian freight rail transportation market and we are well placed to expand and take advantage of new opportunities as markets recover," Chief Executive Sergey Maltsev said in a statement. Globaltrans said earnings before interest, taxation, depreciation and amortization (EBITDA) rose 5 percent in rouble terms in the 12 months to end-December, but fell 18 percent in dollars to $284.5 million.

Rail freight is a key barometer for the health of the Russian economy as it indicates demand for crucial oil and metals -- both of which plunged during the global economic crisis.

Globaltrans last year bought a controlling stake in BaltTransServis for $250 million to boost its presence in the lucrative oil transport market. [ID:nGEE5B008N] (Reporting by John Bowker; Editing by David Holmes)

Diamond Intelligence: ALROSA MAY SUPPLY AT LEAST $1.4 BILLION WORTH OF ROUGH TO RUSSIAN DIAMOND MANUFACTURERS THROUGH 2012 11 April 2010 http://www.diamondintelligence.com/magazine/magazine.aspx?id=8609

Alrosa intends to supply at least $1.4 billion in rough diamonds to Russian cutting plants throughout 2010-2012, reports Interfax. Alrosa's council for market analysis, which discussed the issue at the beginning of March, concluded that long-term rough diamond

supply contracts with the country's largest cutting plants were in the best interest of the company given the increase in demand.  

Alrosa plans to sign contracts with Kristall of Smolensk, Ruis Diamond, EPL Diamonds and two members of the Almazjuvelirexport group, according to the Interfax report, which also says that talks will be held with each of the manufacturing companies.

Maxim Shkadov, general director of Kristall, Russia's biggest cutting plant, said that in the past, Alrosa would sign either long-term contracts for a year that were extendable at the discretion of the parties or it would sign one-off contracts. While Shkadov did not tell Interfax how much rough it planned to buy under the new contracts, he did say that Kristall wanted to sustain pre-crisis procurement levels.

"Our capacity and sales potential allows us to achieve annual turnover of $500 million, and we need to buy the corresponding amount of rough in order to achieve that," Shkadov told Interfax.

Bloomberg: Rusal Returns to Profit on Norilsk Stake, Price Gain (Update2) http://www.bloomberg.com/apps/news?pid=20601087&sid=alyMu4UEhIGM&pos=6

By Bloomberg News

April 12 (Bloomberg) -- United Co. Rusal, the world’s largest aluminum producer, returned to profit last year as demand for metals improved and the value of its 25 percent stake in OAO GMK Norilsk Nickel more than doubled.

Net income was $821 million, or 6 cents a share, for the 12 months ended Dec. 31, compared with a loss of $6 billion, or 49 cents, in 2008, Moscow-based Rusal, the first Russian company to sell shares in Hong Kong, said today in a statement to the city’s stock exchange.

Aluminum touched the highest price in 18 months today, as U.S. inventory data improved, suggesting the economic recovery is picking up. Demand in Russia will grow 26 percent this year, and Rusal will raise global output by 3 percent, the metal producer controlled by billionaire Oleg Deripaska said today.

“Rusal’s plans to restart smelters may indicate improving orders from customers in Europe,” said Helen Lau, a Hong Kong- based analyst at UOB-Kay Hian Ltd. Norilsk Nickel “contributed significantly to profit last year,” Lau said.

Rusal, which raised $2.2 billion from its IPO to pare debt, rose 2.7 percent to HK$9.65 at 10:02 a.m. in Hong Kong trading. The stock was down 13 percent from the offer price of HK$10.80 before today.

Sales dropped 48 percent to $8.2 billion on lower metal prices and sales volumes. Rusal’s share of profit from its associates was $1.4 billion in 2009, compared with a loss of $3.3 billion a year ago, mainly because of its investment in Norilsk, the company said.

Norilsk Debt

Rusal purchased its stake in Moscow-based Norilsk, Russia’s largest mining company, in April 2008, prior to a collapse in global stock and commodity markets. The acquisition was the first step in a potential merger, Rusal said at the time.

That deal doubled Rusal’s debt, and the falling value of its investment contributed to the aluminum maker’s 2008 loss. Norilsk shares jumped 123 percent last year, Rusal said.

“Our competitive advantages, supported by the increasing value of the Norilsk Nickel investment and positive aluminum price momentum which is expected to continue in 2010, will drive the value of the company forward,” Deripaska said in the statement.

Aluminum for delivery in three months on the London Metal Exchange has risen 58 percent in the past year, and today touched $2,429 a metric ton, the highest since October 2008.

Aluminum Forecast

Rusal expects aluminum prices to remain higher than $2,000 a ton this year on improved demand.

Output of alumina, a material from which aluminum is made, will rise 11 percent this year, the company said.     Rusal plans to restart a Jamaican alumina refinery from June almost at full capacity as prices rose and it reached accords with the local authorities that “improved the economics” of the operations, the company said in a separate statement today.

The Ewarton Works plant will make 321,000 tons of alumina this year compared with its annual capacity of 650,000 tons.

Rusal cut cash cost for each ton of aluminum produced by 23 percent to $1,471 a ton in 2009. Cash costs a ton grew to $1,485 in the final three months of last year, Rusal said in its listing memorandum.

Costs Cutting

“The key things to watch will be how Rusal manages cost inflation in Russia this year,” Vladimir Zhukov, an analyst at Nomura International Plc in Moscow who has a “neutral” rating on the shares, said before the results were published.

The company appointed Vladislav Soloviev, 36, to a new position of first deputy chief executive officer, it said today. Soloviev worked at Rusal before taking over as chief executive officer of Deripaska’s energy and metals holding company EN+.

Rusal’s IPO was delayed by regulators at least twice on concern about the company’s borrowings. Hong Kong’s Securities and Futures Commission gave its approval on condition the shares weren’t sold to retail investors. Rusal sold shares to investors including Hong Kong billionaire Li Ka-shing and New York hedge-fund manager Paulson & Co.

--Yuriy Humber and Xiao Yu. Editors: Tan Hwee Ann, Indranil Ghosh.

To contact the Bloomberg News staff on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net; Xiao Yu in Hong Kong at yxiao@bloomberg.net

Last Updated: April 11, 2010 22:30 EDT

Reuters: UPDATE 1-UC RUSAL 2009 swings to profit, sees strong 2010http://uk.reuters.com/article/idUKTOE63901020100412

Mon Apr 12, 2010 2:24am BST

* 2009 profit $821 mln vs analysts' forecast $574 mln

* H2 profit $1.698 billion vs analysts forecast $1.442 bln

* Sees aluminium prices remaining above $2,000 per tonne

(Adds CEO comment, details)

HONG KONG/MOSCOW, April 12 (Reuters) - Russia's UC RUSAL, the world's biggest aluminium producer, said on Monday it saw stronger aluminium demand as the global economy recovers, as it swung to a profit in 2009 boosted by cost reduction initiatives.

"Demand for aluminium is also expected to be supported by the major developed countries as the global economy revives," the company said in a statement to the Hong Kong Stock Exchange in its first annual report since its January IPO.

It added it expects aluminium prices to remain above $2,000 per tonne throughout this year.

"The company will continue focusing on efficiency improvements by optimisation of raw materials supply, power consumption, logistics, reduction in overheads and roll-out of UC RUSAL's operational systems, as well as steady deleveraging through operating cash flows," it said.

As the market improves, RUSAL (0486.HK) (RUAL.PA) said it would boost both alumina and aluminium production this year.

RUSAL, which raised $2.2 billion when it became the first non-Asian company to list in Hong Kong earlier this year, reported a net 2009 profit of $821 million, compared with a loss of $5.98 billion in 2008.

Analysts had predicted a profit of $574 million, which included non-cash gains such as the group's 25 percent stake in metals giant Norilsk Nickel (GMKN.MM). Excluding those items, they had forecast a net loss of $949 million for 2009. [ID:nLDE63718I]

Net profit for the last six months of 2009 reached $1.689 billion versus a loss of $7.393 billion a year earlier and consensus forecast of a $1.442 billion profit, according to Reuters calculations using company data.

"(Last year was) one of the toughest on record for the global economy, commodity markets in general and, in particular, the aluminium industry," CEO Oleg Deripaska said in a statement in the company's annual report.

"We fully intend to benefit from improving market conditions and our proximity to the fast growing markets in China and other parts of Asia," he said.

RUSAL shares fell sharply on their opening day of trading and remain 10 percent below their original valuation.

RUSAL became the world's biggest aluminium producer through a string of acquisitions and expansion last decade, but the global economic crisis and subsequent downturn in aluminium prices plunged the group into a debt crisis.

It eventually restructured $16.8 billion of debt late last year, and launched IPOs in Hong Kong and Paris in January. Several other Russian firms have since announced plans to float in London, Moscow and Hong Kong.

Factbox on RUSAL - [ID:nLDE60L1EN]

Factbox on Russian IPOs [ID:nLDE62N07X]

(Reporting by Doug Young, Don Durfee and John Bowker; Editing by Jonathan Hopfner)

Steel Orbis: NLMK incorporates Berezovsky Electrometallurgical Plant within NSMMZhttp://www.steelorbis.com/steel-news/latest-news/nlmk-incorporates-berezovsky-electrometallurgical-plant-within-nsmmz-524604.htm

Monday, 12 April 2010 11:09:20

NLMK-Long Products, a division of Russian steelmaker Novolipetsk Steel (NLMK), has competed the reorganization of its production facility Nizhne-Serginsky Metallurgical and Metalware Plant (NSMMZ) by incorporating Berezovsky Electrometallurgical Plant within it. The move is aimed at improving performance (at reducing managerial, administrative and other costs) and at the consolidation of the production chain within a single legal entity.

The production capacities of NSMMZ and the rolling shop of Berezovsky Electrometallurgical Plant, which is in the final stage of preparations for commissioning, are a part of a single production chain, which connects the electrical steelmaking and section rolling production of NLMK-Long Products' enterprises.

As a result of the reorganization, the production capacities of NLMK-Long Products for steel and long products output in Russia's Ural region will be focused within one enterprise, namely NSMMZ. The production capacities in question include electrical steelmaking production with up to 2.2 million mt per year capacity in Revda town, reinforcing bar production with up to one million mt per year capacity in Nizhniye Sergi town, and reinforcing bar in coils and wire rod production with up to one million mt annual capacity in Berezovsky (following the commissioning of the rolling mill).

NLMK-Long Products, established in December 2009 as a result of NLMK's acquisition of a controlling stake in Maxi-Group and its subsidiaries, includes Nizhne-Serginsky Metallurgical and Metalware Plant, Uralsky Plant of Precision Alloys, Berezovsky Electrometallurgical Plant, Kaluzhsky Electrometallurgical Plant, and companies in the Vtorchermet NLMK industrial association.

NLMK's electrometallurgical plant in the Kaluga region with an annual capacity of up to 1.55 million mt of crude steel and 1.5 million mt of long products is currently under construction, and will also be a part of NLMK-Long Products division.

Financial Times: TeliaSonera's plans for Russian telecoms group at riskhttp://www.ft.com/cms/s/0/b40e6186-45ca-11df-9e46-00144feab49a.html

By Andrew Ward in Stockholm and Catherine Belton in,Moscow

Published: April 12 2010 03:00 | Last updated: April 12 2010 03:00

TeliaSonera, the Swedish mobile operator, is facing a threat to its ambitions in Russia as Alisher Usmanov, the billionaire oligarch, signals interest in a possible deal to fold Megafon into a state-owned telecoms group.

Mr Usmanov is resisting rival proposals by TeliaSonera, which owns a minority stake in Megafon, to seize joint control of Russia's number three mobile operator through an alliance with Altimo, the telecoms arm of Mikhail Fridman's Alfa Group.

Instead, Mr Usmanov, the biggest shareholder in Megafon, could be open to merging the company with Rostelecom, part of state-owned Svyazinvest, according to the head of his telecoms investment unit.

Ivan Streshinsky, chief executive of Telecominvest, told the Financial Times that Megafon was a "good fit" for Svyazinvest, which dominates the Russian fixed-line network but lacks a presence in the mobile market. His comments will fuel speculation that the Kremlin wants to create a state-backed "national champion" in the telecoms industry, with Megafon at its heart, thwarting efforts by TeliaSonera to gain greater influence over its Russian investment.

Telecominvest last week filed a lawsuit aimed at blocking the proposed joint venture between TeliaSonera and Altimo, in which the two companies would pool their holdings in Megafon and Turkcell, the Turkish mobile operator. Altimo says it has not breached any laws.

Mr Usmanov controls 39 per cent of Megafon through Telecominvest and AF Telecom, while TeliaSonera owns 35.6 per cent and Altimo 25 per cent. Further complication is added by the 26 per cent stake that TeliaSonera owns in Telecominvest.

Mr Streshinsky said a tie-up between TeliaSonera and Altimo would violate Russian laws barring foreign state-owned companies controlling strategic Russian assets, including mobile phone operators. TeliaSonera is 37 per cent owned by the Swedish government, while the Finnish state holds just over 13 per cent. Under the proposed deal, TeliaSonera and Altimo would have equal control of their joint venture but the Nordic company would have the greater economic share.

Mr Streshinsky said the deal appeared designed primarily to solve a protracted ownership dispute involving Turkcell and offered no benefits to Megafon and its other shareholders.

Mr Usmanov was invited to join their joint venture but Mr Streshinsky said the proposal would dilute his ownership of Megafon by more than half. "That does not hold any interest for us."

He also highlighted what he said were conflicts of interest between Altimo's role in Megafon and its joint control of Vimpelcom, Russia's biggest mobile operator, through an alliance with Telenor of Norway that was recently approved by regulators. "It would not be allowed by antitrust authorities in any western country," he said.

Altimo says the two joint ventures would be independent of each other and would compete like any other companies.

Mr Streshinsky said Telecominvest would consider buying out TeliaSonera and Altimo from Megafon. Both companies yesterday said they had no plans to sell.

A spokeswoman for TeliaSonera said it remained committed to its deal with Altimo and insisted it could go ahead without Mr Usmanov's backing, provided legal and regulatory hurdles were cleared.

Both companies stressed that work would not start on forming the joint venture before resolution of several lawsuits aimed at securing control of Turkcell from its founder Cukorova.

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

Reuters: UPDATE 1-Russia's Magnit sales soar in March on new shopshttp://uk.reuters.com/article/idUKLDE63B01L20100412

Mon Apr 12, 2010 6:07am BST * Net retail sales grew 31.5 pct vs 28 pct rise in Feb * First-quarter like-for-like sales rose 2.86 pct * Average ticket up 3.43 pct, customer traffic still down MOSCOW, April 12 (Reuters) - Russian food retailer Magnit(MGNT.MM) said its sales growth accelerated in March after itadded twice as many new outlets as in February, but has so farfailed to reverse customer outflows from mature stores. Net retail sales rose by 31.5 percent in rouble terms,year-on-year, to 17.76 billion roubles ($605.7 million) after a28 percent rise in February, Magnit said in a Monday statement. The company opened 47 stores, compared with 24 additions inthe previous period. [ID:nLDE62A030] Like-for-like sales rose 2.86 percent in the first quarteron the back of a 3.43 percent increase in the average purchasesize, while the number of transactions was down 0.60 percent. Magnit (MGNTq.L), operator of a rapidly expanding networkof hypermarkets and smaller local discount grocery stores, hasseen signs of an outflow of customers from mature stores due towhat analysts called a wrong pricing policy. The company started to lower prices at the end of last yearand pledged to keep cutting them in 2010 to stopprice-conscious customers fleeing its stores. [ID:nLDE62S0ER] Its rival X5 Retail Group (PJPq.L) reported on Friday a 7percent rise in first-quarter like-for-like sales, in line withthe previous period. [ID:nLDE63806F] (Reporting by Maria Kiselyova; Editing by MuralikumarAnantharaman) ($1=29.32 Rouble)

Moscow Times: For the Record http://www.themoscowtimes.com/business/article/for-the-record/403731.html

12 April 2010

Qatari Energy Minister Abdullah bin Hamad al-Attiyah met with Deputy Prime Minister Igor Sechin to “coordinate” before the Gas Exporting Countries Forum later this month, the state-owned Qatar News Agency reported Friday. (Bloomberg)

Russian seaports handled 123 million tons of cargo in the first quarter, an increase of 11 percent from the year-earlier period, with exports rising 13 percent to 96.6 million tons, the Association of Commercial Seaports said Friday. (Bloomberg)

Russian banks will have 180 billion rubles ($6 billion) set aside for bad loans by the middle of the year, compared with 220 billion rubles at the start of 2010, Central Bank First Deputy Chairman Gennady Melikyan told reporters Friday. (Bloomberg)

Russneft founder Mikhail Gutseriyev will likely return to Russia in the coming weeks, Vedomosti reported Friday. (Bloomberg)

The Association of South East Asian Nations may invite the United States and Russia to a summit of Asia’s largest economies in October as members struggle to forge an effective economic partnership, Indonesia’s foreign minister said Friday. (Bloomberg)

Pharmacy chain 36.6 swung to a net loss of 229 million rubles ($7.8 million) in the third quarter, compared with profit of 77.5 million rubles a year earlier, after sales slumped, the company said Friday. (Bloomberg)

Baby food maker Nutritek said late Thursday that it was urgently seeking ways to escape bankruptcy and has postponed its secondary share placement while it works on a plan. (Reuters)

TNK-BP said Friday that its exploration budget would reach $400 million this year. (Bloomberg)

Venezuelan President Hugo Chavez called U.S. officials “stupid” on Thursday for criticizing his arms purchases from Russia and said he would keep buying weapons until the country is ready to defend itself. (Reuters)

Norilsk Nickel is exploring the sale of Stillwater Mining, a Montana platinum and palladium miner, after prices for the precious metals rebounded sharply in recent months. (AP)

Businessneweurope: Russia is a private equity desert http://www.businessneweurope.eu/storyf2039/Russia_is_a_private_equity_desert

Ben Aris in Moscow April 12, 2010

Money. It's the air that entrepreneurs and fast growing companies breath. It is also hard to come by for those in Russia and the current crisis has just made it a lot harder.

The Kremlin has started a big push to modernise the Russian economy, but while in the West anyone with a really good idea and a bit of development under the belt can usually find cash to continue, in Russia the nascent private equity business has been given a bloody nose and will take years to recover.

Richard Sobel, head of Alfa Capital Partners, is the old man of Moscow's private equity business. He has been working and investing into Russian business since the Iron Curtain fell in 1991, but after almost 20 years in the game, he still refers to Russia's private equity sector as a "young market."

Russia's private equity industry was just getting going in the boom years, but was still very lopsided. Prior to the crisis, Russia boasted about $40bn of private equity funds, according to Michael Calvey of Barings Vostok Capital Management, another doyen of the market. Of this money, only about $5bn was institutional money managed by professional (almost all western) fund managers. The rest was oligarch money that Russia's leading businessmen were investing into anything other than the sector that made them rich in the first place. By 2007, this oligarch money was becoming more sophisticated and several of these businessmen had hired professional fund managers to invest their billions.

But the crisis hurt Russia's super-rich more than anyone else and almost all the oligarch money has since evaporated. Sobel's fund has $611m of assets under management, of which it has invested about $300m. But most of what is left of the private equity assets under management now belongs to the international financial institutions like the World Bank's IFC and the European Bank for Reconstruction and Development (EBRD). "The Russian [private equity] market is young, but in each cycle it gets stronger," says Sobel, speaking at C5's CIS Private Equity and Venture Capital conference in Moscow in March. "The current downturn is to be expected. Private equity is an inherently cyclical business and the extremity of Russia's cycles exacerbate these flows [of money]."

Staying alive

For most funds, 2009 was a year of simply surviving as the game went from expanding into the regions as fast as you could, to consolidating assets and improving operational efficiencies. "You could find yourself in the position where your company was still profitable, but managing the debt and credit repayments became really hard," says Sobel. "Still, most banks were willing to sit down and discuss restructuring so there have been relatively few distressed sales."

Most Russian companies put in flat sales growth in 2009, but thanks to inflation and the ruble's appreciation that translates into a 20% real fall in sales in ruble terms and 30% fall in dollar terms, says Sobel. On the flip side, the cost of business has come down considerably and it has become much easier to find experienced managers - a longstanding problem in Russia.

As the main source of investment capital remains a company's own funds, most had a stock of cash at the start of the crisis. Some fund managers thought that they would be able to pick up some real bargains as the crisis hit. They were wrong. Valuations held up really well at first, as owners were reluctant to let their babies go. But as the cash ran out, some owners changed their tune. "In 2009, we saw the valuations come down slowly at

first, but then they started to fall fast," says Sobel. However, other fund managers say that the valuations of the best companies – the ones that they were most interested in – didn't move and the cheap companies were often not worth buying.

Now the economy seems to have passed the bottom investors are getting interested in growth again. KPMG predicted in a recent report that the volume of mergers and acquisitions would go up by half this year over 2009 to around $70bn. However, the same report went on to say that it could take more than five years until the peak levels of deals seen in 2007 are reached again, when the volume of funds invested reached $125bn, or about 10% of GDP.

Russia has never been an attractive destination for international private equity funds because of the perceived risks. Fundraising surged between 2005 and 2007 to reach a total of about $5bn, almost all of which was invested. However, Russia will struggle to raise money now and was already lagging behind its Bric peers: Russia's private equity ranking in terms of assets under management has fallen from sixth to ninth place amongst the emerging markets, while China, Brazil and India have retained their slots of first, second and third respectively. "Making a list of the risks you will face in Russia is easy," says Sobel. "They are all on there – every risk you can think of. So you can't get any nasty surprises."

Enough to put anyone off? It would be, except that Sobel goes on to point out that investors are amply rewarded for taking these risks. Russian private equity investments have returned 7.2%, 24.1% and 15.6% over the last three, five and 10 years respectively, making it by far the best performing of any private equity market in the world, let alone its Bric peers.

And even with this stellar growth, Russian companies remain very cheap. The average company valuations are 8-10x ebitda against the other Bric valuation multiples in the high teens or close to 20.

Russia's economy is now clearly past the worst and owners are getting more confident again. If they got this far, then they will probably see the course through to the end. Sobel says that the time is now to get into the game for private equity funds. "The opportunities now are much better than they have been for years," says Sobel. "The valuations are lower and there is almost no competition."

Activity in the Oil and Gas sector (including regulatory)

RBC: Russia likely to hike up oil export duty

http://www.rbcnews.com/free/20100412122141.shtml

      RBC, 12.04.2010, Moscow 12:21:41.Russia's oil export duty is likely to climb $15 or 5.6 percent to $281-284 per tonne starting May 1, 2010, head of the Finance

Ministry's analytical department Alexander Sakovich told journalists today. "The monitoring of global oil prices conducted between March 15 and April 11 showed that the average price amounted to $78.105 per barrel. If the price fluctuates between $78 and $82 per barrel in the next three days, the final monitoring price will amount to $78.09-78.66 per barrel. In this case, the oil export duty will amounted to about $281-284 per tonne from May 1," Sakovich explained. By the same token, the export duties on light and heavy oil products will be set at about $202-204 per tonne and $109-110 per tonne, respectively.

12.04.2010

Oil and Gas Eurasia: Sakhalin Exports Over 3.5 Million Tons of Crude in 1Qhttp://www.oilandgaseurasia.com/news/p/0/news/6993

Oil companies in Sakhalin Region exported 3.535 million tons of crude to the Asia Pacific rim in the first quarter of 2010, the Sakhalin Natural Resources Ministry told RIA-Sakhalin-Kurily. This is 4.1 percent higher than figures from the first quarter of 2009.

Five enterprises produce oil in the region. By April 1, they had produced 3.961 million tons of crude, 5.4 percent more than in the first quarter of 2009.

Sakhalin-1 operator Exxon Neftegaz Limited reduced its export volumes from 2.359 million tons last year to 1.767 million tons from January-March 2010. Sakhalin-Energy, the operator of Sakhalin-2, increased its crude exports. In the first quarter of 2010, the company exported 1.767 million tons of crude, or 732,200 tons more than in the same period in 2009.

Copyright 2010, Oil and Gas Information Agency. All rights reserved.

Bloomberg: Transneft Investors Urge Share Sale to Fund Pipe, Vedomosti Says http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afjHPgp1divo

By Maria Ermakova

April 12 (Bloomberg) -- OAO Transneft shareholders including Prosperity Capital Management and East Capital International urged Russia’s government to sell stock in the pipeline operator to fund a new link, Vedomosti said. The new Zapolyarnoye-Purpe pipeline in the Arctic Yamal region will cost about 70 billion rubles ($2.4 billion), the Moscow-based newspaper said, citing Transneft estimates.

To contact the reporter on this story: Maria Ermakova at mermakova@bloomberg.net

Last Updated: April 12, 2010 00:31 EDT

RBC: Transneft minority shareholders call for IPO

http://www.rbcnews.com/free/20100412105557.shtml

      RBC, 12.04.2010, Moscow 10:55:57.Minority shareholders of Transneft believe that it would be most efficient to finance the company's investment program by making an IPO. According to the RBC Daily newspaper, three asset management companies have submitted proposals regarding the IPO on behalf of holders of 17 percent of Transneft's preferred shares to members of the board of directors, as well as to Finance Minister Alexei Kudrin and Energy Minister Sergei Shmatko. "Additional common shares, being offered to the market as part of the IPO, could draw interest of a wide range of Russian and foreign investors," the shareholders' statement reads.

      Most likely, additional shares will be purchased by Transneft's main shareholder the Federal Agency for State Property Management. Proceeds from the flotation will be applied towards the construction of the Purpe-Zapolyarnoye oil pipeline.

      At the same time, the Russian pipeline giant's representative Igor Dyomin indicated that he was not aware of the letter. "In any case, this letter does not have anything to do with the company's actual operation," he stated.

Oil and Gas Eurasia: NOVATEK Courts Qatar For Yamal-LPG Projecthttp://www.oilandgaseurasia.com/news/p/0/news/6989

12.04.2010

Russia’s largest independent gas producer, NOVATEK, is interested in attracting Qatar partners to its Yamal-LPG project which will produce LPG from the South Tambeyskoye gas condensate field, Oil and Gas Information Agency reports. The offer was made during a visit by Russian officials and businessmen to Doha last week. 

The concept for the pilot project envisions building a 15-16 million ton per year LPG facility, with production slated to begin in 2017-18.

The location of the future complex will allow it to deliver LPG to markets in Europe, North and South America and the Asia-Pacific region.

NOVATEK intends to finalize the make-up of its foreign partners in the project by the end fo the year.

Copyright 2010, Oil and Gas Information Agency. All rights reserved.

12.04.2010

Oil and Gas Eurasia: TNK-BP To Increase Exploration Drilling 37 Percenthttp://www.oilandgaseurasia.com/news/p/0/news/6991

TNK-BP intends to increase its volume of exploration drilling by 37 percent in 2010, the company reported today in a news release. The number of planned exploration wells to be drilled will reach 60, out of which 37 are intended to be completed. Key operations will take place in the Orenburg and Tyumen regions, Khanty-Mansiysk and Yamal-Nenets Autonomous Districts. This signals a return of TNK-BP to the pre-crisis exploration works rates.

“In 2009, our exploration success rate was 74 percent which is an industry-leading achievement. This year our exploration budget has increased threefold and exceeded 400 million dollars which will enable us to step up our exploration activities and help support a successful replacement of our production with new reserves. We successfully maintained over 100 percent replacement the past six years”, said Francis Sommer, Executive Vice President, Technology, TNK-BP.

Copyright 2010, TNK-BP. All rights reserved.

Ukrainian News: Russian-British TNK-BP Interested In Development Of Ukrainian Black Sea Shelf

http://un.ua/eng/article/259077.html

(11:03, Monday, April 12, 2010)

The Russian-British TNK-BP company is interested in the development of the Ukrainian shelf of the Black Sea and intends to enter the natural gas market of Ukraine, executive director of TNK-BP German Khan, told the Kommersant Ukraina newspaper.

He said that the issue was discussed at the meeting of the company leadership with Prime Minister Mykola Azarov and First Vice Prime Minister Andrii Kliuev on April 8.

He said that the projects of the company are being currently studied.

Khan also said that the company is ready to peaceful regulation of the conflict with the Pryvatbank group, which occurred on the basis of Vik Oil filling stations acquired by the Russian-British holding.

In December 2009, the TNK-BP signed an agreement on the acquisition of Kyiv-based Vik Oil limited liability company, which owns 118 filling stations in 13 regions of Ukraine.

Khan also said that TNK-BP plans to invest USD 500 million during the forthcoming three years into the development of the Lysychansk oil refinery in Luhansk region.

The funds will be channeled for the increase of processing depth and improvement of oil product quality up to the level of Euro-4.

As Ukrainian News earlier reported, TNK-BP is an international vertically-integrated holding, which is part of ten largest private oil companies in the world.

The company was established in 2003.

TNK-BP Commerce manages the assets of TNK-BP (a Russian-British joint venture) in Ukraine: the Lysychansk petroleum refinery (Luhansk region) and a large chain of gasoline filling stations.

TNK-BP is a vertically integrated international holding company. It is one of the ten largest private oil companies in the world in terms of volume of oil extraction.

Your Oil and Gas News: The Yamal Asset of TNK-BP Is Developing Unique Fields of Yamal and the Krasnoyarsk Territoryhttp://www.youroilandgasnews.com/the+yamal+asset+of+tnk-bp+is+developing+unique+fields+of+yamal+and+the+krasnoyarsk+territory_47772.html

Monday, Apr 12, 2010

Rospan International, a company established in 1994 for development of Achim deposits in the Vostochno-Urengoiskoe and Novo-Urengoiskoe fields in Yamal, set priorities for its activities in the nearest years. Just before the professional holiday of geologists, the newspaper Krasny Sever found out the ways and goals of Rospan International.

Tough Oil Accumulator

The company is by 100% managed by TNK-BP and since its inception is based in Novy Urengoi – the gas capital of the Yamalo-Nenets Autonomous Area. The reserves of the gas condensate field being developed by the company in the Purovsk District are estimated at 950 billion cubic meters of gas and 180 million tons of gas condensate.

Rospan International is the only asset of TNK-BP that supplies about 200 million cubic meters of natural gas every month. However, recent decisions of TNK-BP considerably increased Rospan International’s potential by accumulation of oil assets in Yamal and the Krasnoyarsk Territory.

Unique Russkoe Field

Rospan International is preparing a series of pilot works under the guidance of its General Director Rustem Bakirov, founder of the legendary Samotlor school and author of a number of major projects for the independent fuel and energy complex in Yugra.

According to Rustem Ilgizovich, efforts of Russian and foreign research institutes were joined and hundreds of highly-qualified specialists from all Russia were invited  for full development of the oil industry in the region.

— One of our highest priorities in Yamal is the Russkoe field in the Tazovsk District, — says he. The recoverable reserves of this field, even in the most pessimistic forecast, amount to approximately 150 million tons. The Russkoe field stands out by the unique quality of its oil and the serious factors complicating oil production in it.

— In fact, here we have the entire range of possible problems, — says Denis Romanov, Chief Geologist of Rospan International, joining the conversation. – These problems include unconsolidated sandstones that crumble when drilled, a gas cap that creates a risk of gas breakthrough, bottom waters, and highly complicated geological structure of the deposit, which, according to various estimates, is composed of 14–19 separate blocks. Our nearest task is to focus our efforts on pilot works and understand how cost-efficient oil from the Russkoe field may be.

Rospan’s plans for ascertaining the potential of formations PK 1–7 in this area go as far as 2014. By that time, the common trunk pipeline, which is being actively discussed now in the government, will be constructed. Thus far, approximately 30,000–40,000 tons of oil is produced here and transported in tank trucks. The drilling program of this year implies drilling of 10 more wells. Apart from that, different well-known enhanced recovery methods for high-viscosity oil will be tested, including thermal recovery methods, methods based on alternation of water and gas, heat alkali recovery methods, etc. Construction of infrastructure will be continued in parallel. Only to get rid of the dependence on ice roads for transportation of oil, 47 kilometers of roads must be built.

Autonomous Locomotive

In the nearest future, Rospan will intensify its efforts in the northern part of Krasnoyarsk Territory. The Suzunskoe field, which is far from major cities of Krasnoyarsk Territory and is part of the Bolshekhetskoe project of TNK-BP, will also be developed under the guidance and control of specialists from Novy Urengoi.

— In terms of oil quality and productivity, the Suzunskoe field is a real gem of our project, — the Chief Geologist says inspiringly. – It is geologically simple, without any visible complications. Pilot works of the next year will provide more detailed information on the geological structure of the field for choosing the right strategy of its development. Much of our activities are expected to unfold here.

— Development of this field with recoverable reserves estimated at 44 million tons will be completely automatic, — the General Director continues. – Equipment is mostly delivered through ice roads, and the river navigation period here is limited to 2–3 weeks. However, in spite of the obvious problems and difficulties, works are performed here according to the schedule. We already started backfilling of operations areas and are

going to drill 6 wells this year. Our current task is difficult but feasible – start oil production in this field in mid 2012 and produce the first 2.5 million tons of oil.

Until 2012, Rospan has to build here an oil treatment facility, a gas-turbine power plant, a procurement base, and a rotational camp. Nuances of the main problem, which is access to the pipeline running in 85 km from the field, are still vague. However, in view of the signals sent by the government to oil and gas companies for joint and efficient development of Yamal fields, Rospan hopes for quick and successful completion of negotiations with Rosneft.

Another promising line of activities is continuation of geological exploration works in the Suzunskoe field. This field is surrounded by eight license areas, in five of which Rospan is going to start exploration drilling in the nearest future.

Smart Track

More remote plans of TNK-BP oilmen in Yamal imply development of the Tagaulsky area neighboring the Suzunskoe field on the Taimyr Peninsula and development of the Russko-Rechenskoe field in the Tazovsky District of the Yamalo-Nenets Autonomous Area.

— Both fields are scarcely explored, — says Rustem Bakirov. – For this reason, their fate depends on geologists and developers closely cooperating with our main research partners – Tyumen Petroleum Research Center and Siberian Scientific Analysis Center. Thanks to the high technological services provided by Schlumberger and the efforts of the Russian contractors Nizhnevartovskburneft and Tyumenpromgeofizika, were are going to find an approach to hard-to-recover reserves of these fields.

According to Chief Geologist Denis Romanov, Rospan geologists have all the resources and possibilities required for assessing the potentials of fields with maximum possible accuracy.

— Our current situation resembles the situation with development of fields in Western Siberia in the 1970s. First, we are relying on young specialists for implementation of oil projects, — says Denis Valeryevich. – Our geological service is fairly young and is manned with people younger than 30, recent students mostly. We also have experienced specialists forming the core of our geological service. Use of modern computer technologies in combination with the experience gained during development of fields in Western Siberia enhances the synergetic effect of interaction between experience and ambitions. We are making maximum use of efficient and justified modern technologies. We use three-dimensional seismic exploration methods for exploration of fields as well as attribute analysis and different procedures of seismic data inversion to better understand the geological structure of fields. Telemetric methods of well drilling and geo-navigation allow errorless drilling of horizontal wells and selection of the most promising parts of formations. Interference tests of exploration wells help corroborate

hydrodynamic connections between different parts of formations and choose right formation pressure maintenance methods.

Geologists’ Dream

Discovering a new field is probably every geologist’s dream, — says Denis Romanov. – Our predecessors, represented by Farman Kurbanovich Salmanov’s team, left us slim chances of finding another Samotlor. This does not mean, however, that we have nothing to strive for in our age of technological progress and ubiquitous demand for innovations. In my opinion, construction of an “intelligent” well that would control the whole production process without extraneous interference is a very brave and promising dream. Analogs of such wells are used in offshore production, but an innovation like this could also be implemented onshore in certain conditions, one of which is a high well flow rate. We strive for this and believe in our success.

Source: TNK-BP

Gazprom

Bloomberg: Gazprom Raises Gas Output Target on European Demand (Update1) http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2qHrPNszABA

By Anna Shiryaevskaya and Stephen Bierman

April 9 (Bloomberg) -- OAO Gazprom, the world’s biggest natural-gas producer, raised its 2010 output target by 1.5 percent after a cold winter in Europe boosted demand for the heating fuel.

The Moscow-based company aims to produce 529 billion cubic meters of gas this year, Chief Executive Officer Alexei Miller told reporters near the Baltic town of Vyborg today. The company previously said it planned to pump 521 billion cubic meters.

“It has been a cold winter in Europe,” Gazprom’s main export market, Miller said. By the end of the year, the company will have recouped two-thirds of last year’s production decline, he said.

The U.K., Europe’s largest gas market, had its coldest winter in more than 30 years, the country’s Met Office said last month, citing provisional data. E.ON AG, the region’s biggest utility, said March 10 that gas demand in January and February was up 16 percent and the “cold winter certainly played a role.”

In the second and third quarters, European customers will seek to replenish underground gas-storage facilities, which are currently half-empty, according to VTB Capital analyst Svetlana Grizan. Fourth-quarter demand will be less strong, she said by telephone from Moscow.

An emerging economic recovery and a lower base of comparison following halts in supply through Ukraine last year may also have contributed to Gazprom’s forecast, Grizan said.

To contact the reporters on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net; Stephen Bierman in Moscow at sbierman1@bloomberg.net

Last Updated: April 9, 2010 08:37 EDT

Power-Gen Worldwide: Belarus ready to consider selling control of gas pipelines to Gazpromhttp://www.powergenworldwide.com/index/display/wire-news-display/143527695.html

Text of report in English by Belarusian privately-owned news agency Belapan

Minsk, 8 April: The Belarusian government is ready to consider selling control of Beltranshaz [Belarusian gas pipeline operator] to Gazprom, First Deputy Prime Minister Uladzimir Syamashka told reporters in Minsk on Thursday [8 April].

If Gazprom formally announces its wish, "we'll think and consider this proposal", Mr Syamashka said.

Following the payment of the last 625m-dollar instalment in late February, Gazprom currently holds 50 per cent in the Belarusian gas pipeline company.

While on a visit to Minsk in late March, Andrey Kruglov, deputy chairman of the board of the Russian state-run natural gas monopoly, said that Gazprom would like to acquire control of the company. However, he noted, this is a matter of relations between not only these two economic entities but also between the two states. Since the governments are the main stockholders of both Gazprom and Beltranshaz, "we'll adjust our investment plans on the basis of interstate agreements," he said.

Originally published by Belapan news agency, Minsk, in English 2255 8 Apr 10.

(c) 2010 BBC Monitoring Former Soviet Union. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.

AFP: Italy's Eni blocking South Stream progress: Gazpromhttp://www.google.com/hostednews/afp/article/ALeqM5hFzq7tLCs4UkRcLTtaFQ93L-tWBQ

(AFP) – 2 days ago

MOSCOW — Italian energy giant Eni, Russia's partner in its planned South Stream gas pipeline, is blocking the project's development, a top official with Russian gas giant Gazprom said Friday.

"In my opinion, there's been no progress on South Stream due to the absence of adequate work by our Italian partners," Stanislav Tsygankov, the head of Gazprom's external relations department, was quoted by the Interfax news agency as saying.

"They have not taken a single constructive step. There is no material proof that they are working," he said. "I am not even talking about the payments on their end. We are paying for everything so far."

Gazprom spokesman's however denied any conflict in the companies' work on South Stream, which plans to carry Russian gas under the Black Sea and into the Balkans to create a new energy route to Europe bypassing Ukraine.

"Gazprom does not see any major difference of opinion in its cooperation with Eni and realisation of South Stream," spokesman Sergei Kupriyanov told Interfax.

Russia vehemently rejected an Eni proposal this year to merge the South Stream pipeline with the rival EU-led Nabucco plan, after its key partner said the competing projects could join forces.

The EU-backed Nabucco pipeline aims to carry gas from the Caspian Sea region to Europe and is seen as a way of reducing European reliance on Russian gas.

Today’s Zaman: Gazprom-SOCAR gas deal: Should Azerbaijan commit to a long-term contract?http://www.todayszaman.com/tz-web/news-207061-109-gazprom-socar-gas-deal-should-azerbaijan-commit-to-a-long-term-contract.html

WASHINGTON -- In the last quarter of 2009, State Oil Company of Azerbaijan Republic (SOCAR) and Russian gas giant Gazprom signed a medium-term deal -- in the presence of both Azerbaijani President İlham Aliyev and Russian President Dimitry Medvedev -- to supply Azerbaijani gas to Russia.The contract initially envisioned export of about 500 million cubic meters of gas per year.

Gazprom’s Web site said the two companies would conduct joint technical inspections of the 200-kilometer Baku-Novo Filya pipeline, which runs along Azerbaijan’s Caspian coast to the Russian border, and ultimately modernize the pipeline. “Azerbaijani gas will be supplied to Russia along this route,” the company’s Web site reported.

A few months later, Gazprom CEO Alexei Miller announced that his company is willing to buy as much Azerbaijani gas as possible. He also mentioned that Gazprom -- the world’s biggest natural gas producer -- will be paying market prices for Azerbaijani gas.

SOCAR’s chief, Rovnag Abdullayev, also expressed his company’s interest in increasing the amount of natural gas sold to the Russian side. Since then, Gazprom has tried to push SOCAR for a long-term gas deal.

At first it seems like a pretty good deal for Azerbaijan since Azerbaijan lacks a direct gas link to Europe and has been unable to agree with Turkey on terms for the transit of larger planned volumes. A SOCAR-Gazprom deal would be an excellent opportunity for Azerbaijanis to sell their gas at market prices right at the “door” without hassling with transit countries such as Turkey and Georgia or waiting for the implementation of the Nabucco pipeline. Thus, Gazprom’s network is the “optimal” route for gas from Azerbaijan to reach Europe.

For diversification of export routes and for certain geopolitical and commercial reasons, Gazprom’s offer requires careful examination and analysis by the Azerbaijani side. As of now, Azerbaijan is capable of carrying out its commitments toward exporting approximately 1 billion cubic meters (bcm) to Russia (the Dagestan region) annually. The second phase of Shah Deniz gas production is expected to add 12 billion to 14 billion cubic meters of annual gas output in three to five years once a market is found and transit for the fuel ensured. Committing all possible gas supply to Gazprom beforehand cannot be viewed as a viable option for Azerbaijan.

Azerbaijan may

lose its bargaining power

Early commitments to Gazprom will decrease Azerbaijan’s bargaining power in terms of pricing. Central Asian gas producers Kazakhstan and Turkmenistan had to sell their natural gas for significantly lower prices compared to world market prices because Gazprom was the only buyer. It was only when China became another possible buyer for Central Asian gas that the Russian company offered fairly good prices to Turkmenistan and Kazakhstan.

Along with commercial concerns, geopolitical ramifications of a possible long-term commitment to Gazprom cannot be disregarded. Russia is widely known to use its economic advantage as political leverage in dealing with its neighbors and other countries. In the cold winter of 2009, Russia did not hesitate to cut the gas supply to its consumers in order to push its political agenda forward. Since then, European countries have started looking for alternative natural gas supply routes. Russia’s intransigency forced them to think about their energy security and be cautious in their future dealings with Russia.

In line with this new approach, the Nabucco pipeline has been proposed to create another supply route that is projected to bring about 31 bcm of natural gas to Europe. Gazprom applies different pricing approaches to different countries. The price that is given to Armenia -- its closest ally in post-Soviet hinterland -- is much lower than the prices given

to Ukraine or Georgia, the latter started to import natural gas from Azerbaijan instead. Thus, it is not that hard to see political motivation in Gazprom’s business.

Azerbaijani gas is one of the possible -- maybe the most viable -- sources to fill the Nabucco pipeline, and it is in Azerbaijan’s utmost interest to diversify its natural gas exporting options. Being a major supplier of the Nabucco pipeline would serve Azerbaijan’s interests, and Azerbaijan can play an important role in European energy security. Currently Azerbaijan’s Shah Deniz is the only deposit mature enough to be considered a base for forming contracts for the Nabucco project.

Russia with the hand of Gazprom is doing its best to cut the possible supply for Nabucco. It takes all re-export expenses and pledges to pay market prices for all future possible Azerbaijani exportable gas, meaning that to re-export Azerbaijani volumes, Gazprom would need to cut production and exports of Russian gas, its main source of profit. This makes Gazprom’s offer a politically motivated rather than commercially viable deal. If Azerbaijan happens to commit all its future exportable gas to the Russian company, the Nabucco project will receive a fatal blow, and Azerbaijan will become highly dependent on Russia to export its natural gas. This will ultimately enable Russia to gain more leverage in its relations with Azerbaijan, and Russia will hardly hesitate to use this leverage in dictating its political ambitions.

‘Absurd scenarios’

Some argue that Azerbaijan may “bribe” Russia to make her apply pressure on Armenia so that Russia forces the latter to take a more constructive position in peace talks over the Nagorno-Karabakh conflict. This scenario is totally absurd. Although Russia has a great deal of political and economic influence on Armenia, this scenario is unlikely to happen because Russia is not interested in resolving the frozen Nagorno-Karabakh conflict, contrary to official Russian statements and its role as a mediator. Instead she has always used separatist conflicts to overpower post-Soviet countries. On the other hand, Azerbaijan, under the leadership of father Aliyev, pursued a similar purpose while making oil contracts with Western companies. Along with commercial gains, Azerbaijan expected to strengthen its bargaining position against Armenia while trying to become an important partner of the West. The commercial side of the story has played out quite well, and Azerbaijan also bolstered its independence and sovereignty. However, this policy did not produce desired outcomes for Azerbaijan in terms of making Western countries exert more pressure on Armenia. For all these reasons, it would not be wise for Azerbaijan to pursue the same tactic in its dealings with Russia.

Azerbaijan has to consider all possible ramifications of signing long-term deals with Gazprom and granting all its possible exportable gas to the Russian company. Azerbaijan should never be willing to experience what Turkmenistan experienced in its dealings with Gazprom. Gazprom’s unilateral reduction -- at short notice -- of the gas that it takes from Turkmenistan showed that Gazprom is far from being reliable and has the potential to carry out irresponsible actions. Along with Gazprom’s credibility, commercial viability and geopolitical implications of the agreement should be carefully analyzed given

Gazprom’s stature as a reliable and a credible gas buyer. Having vast natural sources is not enough. The wise management of those sources is much more important.

11 April 2010, SundayEFGAN NIFTIYEV  SUNDAY’S ZAMAN

GL Group: Will Nord Stream debut in 2011 cause major EU foreign policy shift?http://www.glgroup.com/News/Will-Nord-Stream-debut-in-2011-cause-major-EU-foreign-policy-shift--47713.html

April 11, 2010

Analysis by: Michael Lynch

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.

Summary

After 5 years of difficult negotiations, Gazprom has begun laying the 1,220 kilometer natural gas pipeline from Wyborg in Russia to Lubmin in Germany. Vladimir Putin  celebrated the occasion with Gerhard Schroeder on April 9. The $10 billion pipeline is expected to provide more energy security for the European Union and earn big money for Russia. Ukraine's ability to cause trouble will essentially cease. Germany's industrial town of Muelheim will provide most of the steel line pipe.

Analysis

Without any doubt, most citizens of the European Union will feel more secure when Nord Stream comes on line. It will mean that they can stop worrying about gas interruptions during the dark winter days. The new pipeline will deepen the ties that have been steadily building between Russia and Western Europe since the collapse of the Soviet regime in 1990. Europe has now seen 20 years of better relations with Russia and vastly increased commercial interchange. Of the 27 nations in the EU, Germany has by far moved closer to Russia than the other nations. Gazprom owns 51% of the line but the remaining interest is owned by BASF (Wintershall) and E.ON of Germany along with Gasunie of the Netherlands. GDF-Suez of France is also expected to take an interest soon  Until now, Poland, a member of the EU, has been a worry in the expectation that Gazprom will treat them no better now than it has in the past. But Chancellor Merkel of Germany has frequently assured and reassured the Polish prime minister that their energy security will be the same as other EU members. Another factor that will soon come into play is the South Stream pipeline crossing the Black Sea. That line will greatly improve energy security for members in the southern reaches of the EU. When both lines are in operation, Europe will be heavily under Russian influence. Today, the international oil

and gas companies are working all over Russia. In general the cooperation is genuine and the majors are making good profits in both western and eastern Siberia. What has been taking place over the last decade is the growth of the oil and gas business in Europe, Africa and Asia, even as it declines in North, Central and South America. China, Japan, India and Russia are the main players in this shift. For the U.S., the message is clear. Crude oil prices will continue to rise. With natural gas in abundant supply, U.S. energy policy must refocus in this direction and quickly. Otherwise, big trouble looms in the quest for adequate domestic crude oil supplies. In any event, U.S. relations with the EU are going to be affected by the new energy reality.    

New Europe: Door ajar for Gazprom to have power over Ukrainian pipelineshttp://www.neurope.eu/articles/Door-ajar-for-Gazprom-to-have--power-over-Ukrainian-pipelines/100076.php

Author: Kostis Geropoulos11 April 2010 - Issue : 880Ukrainian Prime Minister Mykola Azarov recently invited Russia to join the European Union in a plan to modernize Ukraine’s gas pipeline network, which carries the bulk of Russian gas supplies to Europe. In its talks with Russia, Kiev hopes that Moscow will lower the current gas prices it charges Ukraine, renegotiate the June 2009 gas bilateral delivery contract and consider options for modernizing the gas transit network. “Russia is ready to do a renegotiated deal but provided that it gets what it wants, which is ownership or partial ownership of the transit system and in exchange to that we would see Russia much more willing to renegotiate the transit fees as to give Ukraine a higher level of income from that system,” Chris Weafer, chief strategist at Moscow’s UralSib bank, told New Europe by phone from London on 8 April.Now that the election is over and the electioneering or the politicking is out of the way, there is a greater sense of reality and pragmatism shown by the new leadership of Ukrainian President Viktor Yanukovich, who says he wants to pursue a more balanced policy between Russia and the West, and there is strong possibility of a deal being done that would see Russia acquiring some equity ownership in the transit system, Weafer said.Yanukovich has suggested an EU-Russia-Ukraine consortium to be set up to help modernize the country’s gas pipeline network. “We are ready to participate in the creation of a consortium,” the main lobbyist of Gazprom and deputy parliament speaker Valery Yazev was quoted as saying by the press. “But I absolutely disagree that the creation of a consortium is an argument to lower prices to Ukraine.”Weafer agreed. “The chance of Russia actually reducing the gas price it charges Ukraine is actually very slight,” he told New Europe, adding that Russian gas monopoly Gazprom has been very keen to end the practice of giving subsidized gas to former Soviet republics and wants to move to a full commercial basis. “What we might see is the financial subsidy being paid indirectly by Russia agreeing to higher transit fee,” Weafer said. “It would require some renegotiation of the contract, but in the broad sense Russia would agree to that provided that there is some equity ownership in transit system put on the table as well.” Yanukovich is hoping to sign a deal revising the gas prices downward when Russian President Dmitry Medvedev travels to Kiev in May. But a Ukrainian delegation, which visited Moscow on 23 March 2010 for gas negotiations, yielded few results. Reflecting on the meeting, a top Ukrainian energy official told New Europe by phone from Kiev that Ukraine remains “absolutely faithful” to its obligation under the Brussels declaration, referring to a declaration signed in Brussels in March 2009 by Ukraine and the European Commission paving the way for foreign investment in Ukraine’s gas pipeline infrastructure.Regarding lowering gas prices, the Ukrainian official said that a revision of contracts is a priority of the Ukrainian government given the pre-election campaign statements at that time of the would-be president. “The idea for Ukrainians, of course, is to reduce the price,” he said. Asked if there is a chance of Gazprom acquiring a stake in the Ukrainian pipelines, the official said: “There are some options to look anew at our relations with Russia and it might be one of the options.” KGeropoulos@NEurope.eu

BarentsObserver: Shtokman symphonyhttp://www.barentsobserver.com/shtokman-symphony.4768927-16178.html

2010-04-09 Natural gas is not only of high importance for the Russian economy, but also for Russia’s cultural life as the Shtokman field in the Barents Sea gets its own symphony.

The ”Shtokman symphony” is written in honor of the world’s largest offshore natural gas field located some 600 kilometers north of the Kola Peninsula in the Russian part of the Barents Sea.

23-year old Anton Lubchenko is the composer. Lubchenko lives in St. Petersburg, planned to be the new Gazprom capital in Russia. Gazprom is know as one of the mayor sponsors of Russian cultural life. The ”Shtokman symphony” composer is known for the opera he wrote dedicated to the 2004 Beslan school shoutout in North-Osetia, reports the Moscow News.RIA Novosti reports the ”Shtokman symphony” will be a part of ”The Industrial Trilogy.” In addition to Shtokman as tema, the two others are also connected to Russia’s petroleum industry; the Sakhalin oil and gas project in the Far East and the long railway-bridge over the river Yuribei on Yamal Peninsula also holding large amounts of natural gas.The two first part of the symphony trilogy, Yuribei and Sakhalin will be recorded this weekend in St. Petersburg, according to a press-release sent by Sinemafonika, the company producing the symphony to honor Russia’s largest industrial natural gas projects.The composer’s task is to form an artistic image of Russia’s industrial power, reads the press-release from Sinemafonika.RIA Novosti says the idea behind the symphony is reminiscent of Soviet-era Socialist Art.