Russia 110302

Basic Political Developments Medvedev on March 9 to meet with U.S. Vice-President Japan, Russia discuss strained ties - Japanese and Russian senior officials met on

Wednesday to discuss ties strained by a row over a disputed island chain that has been unresolved since World War II.

o Russian plan to deploy missiles on disputed islands 'regrettable' - Japan : Japan is concerned over Russia's plans to deploy missiles on a group of disputed islands, Japanese Chief Cabinet Secretary Yukio Edano said on Wednesday.

Russia to join Mideast, N. Africa political stabilization if asked - Lavrov Russia-NATO Council may discuss Libyan crisis on Wednesday RF plane arrives in Malta to take Russians evacuated from Libya

o Ferryboat with Russians evacuated from Libya arrives in Malta Moscow offers to host Russia-NATO Council in Sochi

o Sochi may host NATO-Russia Council meeting in summer - Russian envoy to NATO Dmitry Rogozin has handed an official invitation to NATO Secretary-General Anders Fogh Rasmussen to hold a Russia-NATO Council meeting in Sochi in summer.

Russia May Challenge China’s Rare Earth Dominance Hayots Ashkharh: No great expectations about Presidents’ meeting in Sochi,

NKR Vice Speaker sayso Nagorno-Karabakh war to damage mostly Russia, Georgian expert sayso US-Russian cooperation 'has prospects' on Nagorno Karabakh

Kyrgyz Parliament Speaker suggests simplifying labor activity legalization Moscow alarmed by trial of Russian citizens in Belarus Presidential adviser: Russia expects serious electoral surprises in upcoming

parliamentary election campaign - "I think that the Kremlin will experience serious electoral surprises in the upcoming parliamentary election campaign. In contrast to the Kazakh opposition, the Russian opposition can unite," Yertysbayev said.

Russia protests over Bout prison conditions Russia still adamant on not recognizing Kosovo

o Lavrov: Russia urges Belgrade and Pristina to talk Presentation of Skolkovo in Paris today Myanmar to receive new batch of MiG-29s from March Russia lacks enough carrier rockets to fulfill 2011 launch plans

o Russia to keep number of space launches to ISS unchanged o Space Service Centers to be set up in 9 Russian regionso Another 5 Glonass satellites to be launched this year

Medvedev sacks four generals; Gen. Yevnevich appointed Asst. Defense Minister Medvedev dismissed four generals Putin to attend AKKOR convention in Tambov region Wed Sobyanin likely to be elected to head Moscow URP orgn

Moscow police detain woman carrying explosives Moscow allocates over $480 million for police pay Moscow Cancels St. Patrick’s Parade, Citing Traffic Concerns Mikhail Gorbachev to celebrate 80th birthday with family, friends

o Gorbachev celebrates 80th birthday Moscow gets placement centre for migrants Reuters PRESS DIGEST - Russia - March 2 RIA Russian Press at a Glance, Wednesday, March 2, 2011 Protest mood tests Putin as poll countdown begins - "The mood has changed and

there are reasons to be worried," pro-Kremlin analyst Sergei Markov, a United Russia MP in the State Duma parliament, told AFP.

Russia gazes East with new defense plans – By Liu Qiano Analysis: Russia turns military gaze east to counter China

Glass ceiling - For women in Russia, career growth is hampered as a result of gender stereotypes, including those established by the women themselves. The policies of employers, who in 90% of all cases have already predetermined what a manager’s gender should be, also have a negative effect, say researchers.

The last stand for Siberian tigers? - “The worryingly low effective population size challenges the optimism for the recovery of the huge Siberian cat,” the researchers from Russia, Germany and Spain wrote in the paper published in the magazine Mammalian Biology.

National Economic Trends Ruble Spurs Best BRIC Market for Bond Buyers: Russia Credit UPDATE 1-Rouble sets fresh peaks after Russia widens corridor Rouble extends gains to 26-mth highs vs dollar Russia's cbank widens floating corridor for bi-currency basket to 5 rbls Customs Union Commission zeros out grain import duty to June 30

Business, Energy or Environmental regulations or discussions Russia railways boost cargo handling by 7.9% in Jan-Feb, up 5.2% in Feb –

Yakunin Environmental prosecutors in Ukraine are investigating a red dust cloud from a

Rusal-owned alumina refinery, Russia’s state-run Channel One television reported yesterday.

Standard & Poor’s said yesterday that it put VTB’s long-term ‘BBB’ rating on credit watch because of its acquisition of a stake in Bank of Moscow.

The Moscow power generator controlled by OAO Gazprom is scheduled to release its earnings results for 2010.

Sberbank May Buy Ryan’s UFG for $35 Million, RBC Daily Reports Billionaire Abramovich May Rebuild Gorky Park, Vedomosti Says Rusal Says Ukraine Dust Cloud Poses No Environmental Threat (1) London court rejects RusAl request for documents from Norilsk lawyers NCSP shells out 2.531 bln rubles buying shares from holders against Primorsk

Port deal Lisin Gets More of North-Western Shipping

Palladium Rising 15% as Russian Shipments Drop: Freight Markets Fiat to Build Russia Plant to Meet Sales Target, Government Says First LADA cars sold in Venezuela Walmart Fails Where Others Succeed - As the Latest Large Retailer Leaves

Russia, Some in the Industry Believe Existing Players Have the Market Sewn Up Vimpelcom clears court hurdle on way to Wind deal Yota, a new kind of Russian company - Youthful internet provider expands by

focusing on Russia's friends. Russia Repels Retailers as Ikea Halt Curtails Medvedev BRIC Goal Ikea Russia's Wendschlag Speaks Aeroflot considers creating a handling JV with Sheremetyevo and Vienna airports Rosaviation liberalises regulation of charter flights

Activity in the Oil and Gas sector (including regulatory) Russia Holds Oil Output Near Post-Soviet Record in February (1) UPDATE 1-Russia Feb oil output up at 10.23 mbpd, near record TNK-BP offers to buy BP stake TNK-BP confirms eying BP-Rosneft Arctic project TNK-BP proposes taking BP's place in Rosneft deal Rabble rousing: TNK-BP offers to replace BP in Rosneft tie-up TNK-BP begins construction of intercession comprehensive gas treatment unit Blow To Private Gas Sector As Gazprom Wins Kovykta Auction

Gazprom Gazprom, Statoil: Shtokman is Going According to Plan Srbijagas Wants to Expand to Banking, Insurance With Gazprom

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Full Text Articles

Basic Political Developments

CORRECTED GOOGLE TRANSLATION

http://rian.ru/politics/20110302/341119110.html

Medvedev on March 9 to meet with U.S. Vice-President Add comment 02/03/2011 12:05 MOSCOW, March 2 - RIA Novosti. Vice President Joe Biden will visit Moscow on a working visit, on March 9 Russian President Dmitry Medvedev will receive him, the Kremlin press service announced on Wednesday. "Ninth of March 2011, Russian President Dmitry Medvedev will receive Vice-President Joseph Biden, who will be on a working visit to Russia," - says the statement.

Japan, Russia discuss strained tieshttp://www.channelnewsasia.com/stories/afp_asiapacific/view/1113866/1/.html

Posted: 02 March 2011 1259 hrsTOKYO: Japanese and Russian senior officials met on Wednesday to discuss ties strained by a row over a disputed island chain that has been unresolved since World War II.

The meeting came a day after Russia's Interfax news agency reported Moscow was planning to deploy additional weaponry including anti-ship cruise missiles and air defences on the disputed southern Kuril islands.

While the diplomats met, Japan's top government spokesman Yukio Edano, when asked at a press conference about the report, said: "We are of course watching Russian military activities in the Far East".

"When Foreign Minister (Seiji) Maehara visited Russia, he said that we should promote defence exchanges and communications and that we should avoid an unnecessary arms race in the Asia-Pacific region."

The islets, called the Northern Territories by Japan, were seized by Soviet troops in the days after Japan's surrender in World War II, and the row has prevented both sides from signing a peace treaty since.

The dispute has flared up since November when Russian President Dmitry Medvedev paid an unexpected visit to one of the four islands, followed by a series of trips there by other top Kremlin officials.

Tokyo and Moscow have since been engaged in a heated war of words that continued during a tense February 11 exchange in Moscow between Maehara and his Russian counterpart Sergei Lavrov.

Kenichiro Sasae, Japan's deputy minister for foreign affairs, held the half-day "strategic dialogue" in Tokyo with Andrei Denisov, the Russian first vice-minister for foreign affairs.

The talk, the eighth of its kind since 2007, focused on bilateral issues as well as international problems of mutual interest, such as nuclear developments by North Korea and Iran, said the Japanese foreign ministry.

-AFP/wk

Russian plan to deploy missiles on disputed islands 'regrettable' - Japanhttp://en.rian.ru/world/20110302/162825661.html

12:25 02/03/2011

TOKYO, March 2 (RIA Novosti) - Japan is concerned over Russia's plans to deploy missiles on a group of disputed islands, Japanese Chief Cabinet Secretary Yukio Edano said on Wednesday.

Russian media quoted on Tuesday a high-ranking representative of Russia's General Staff as saying that Russia was planning to deploy Bastion missile systems with Yakhont anti-ship cruise missiles on the disputed South Kuril Islands, known as the Northern Territories in Japan.

"This is very regrettable," Edano told journalists in Tokyo. He added that Japan was following closely the "trends of Russia's military activities in the Far East."

Russia's move comes as part of government plans to modernize armed forces in the country's Far East. The decision was taken after the long-standing territorial dispute between the countries escalated in November last year following a visit by Russian President Dmitry Medvedev to one of the four South Kuril Islands.

Japanese Prime Minister Naoto Kan criticized Medvedev's trip as "inexcusable rudeness," sparking an angry reaction from the Kremlin.

Earlier on Wednesday, Edano called for a more active political dialogue with Russia and warned against any arms race in the Asia-Pacific region.

Japan's continued claim over the four Kuril Islands has prevented Moscow and Tokyo from signing a formal peace treaty to end World War II hostilities. Iturup, Kunashir, Shikotan and Habomai lie at the end of a chain stretching from Russia's Kamchatka Peninsula to the Japanese island of Hokkaido.

12:06Russia to join Mideast, N. Africa political stabilization if asked - Lavrovhttp://www.interfax.com/news.asp

Russia-NATO Council may discuss Libyan crisis on Wednesdayhttp://en.rian.ru/world/20110302/162820011.html

01:58 02/03/2011

Russia and NATO could discuss the situation in Libya during a meeting of the Russia-NATO Council in Brussels on Wednesday, Russia's envoy to NATO Dmitry Rogozin said.

"I am not ruling out the possibility that the situation in Libya may be discussed during the meeting, although the issue is not on the official agenda," Rogozin told RIA Novosti after a working meeting with NATO Secretary General Anders Fogh Rasmussen on Tuesday.

Rogozin said that despite serious disagreements among members on alliance's involvement in possible military actions against Muammar Gaddafi's regime, NATO would most certainly act only on approval by the UN Security Council.

The international community has already condemned the violence by Libyan authorities that reportedly killed up to 2,000 people in clashes between protesters and supporters of leader Muammar Gaddafi since a popular uprising began on February 15. Inspired by recent revolutions in Tunisia and Egypt, Libyans are demanding an end to Gaddafi's 42-year authoritarian rule.

On Tuesday, the United Nations suspended Libya's membership in the UN Human Rights Council in an effort to persuade the country's regime to stop violence against protesters.

BRUSSELS, March 2 (RIA Novosti)

RF plane arrives in Malta to take Russians evacuated from Libya

http://www.itar-tass.com/eng/level2.html?NewsID=16002916

02.03.2011, 08.06

MOSCOW, March 2 (Itar-Tass) - A plane of the Russian Emergency Situations Ministry, which will airlift to Moscow citizens of Russia and the CIS countries evacuated from Libya, has arrived in Malta, the ministry’ s information department told Itar-Tass.

“The Ilyushin Il-62 plane of the Emergencies Ministry with the ministry’s response group and psychologists landed at 02:06 MSK, Wednesday, at Malta Luqa airport. This special flight will airlift to Moscow the Russians and CIS citizens who were evacuated by the Sveti Stefan II ferry from Ras Lanuf, Libya,” a ministry spokesman said.

The ferry left Libya on Tuesday evening. It carries a total of 397 people, among them there are 126 Russian citizens, including two children, and 14 citizens of Ukraine and Uzbekistan.

Clashes between the opposition and pro-government troops and mercenaries have not been stopping in Libya since February 15. According to some reports, nearly 2 thousand people have been killed in them.

The Russian Ministry of Emergency is conducting an operation to evacuate Russian citizens from Libya swept by disorders since February 22 on instruction of the RF president. Russian citizens were working in Jamahiriya mainly for Russian oil companies and under contract with Russian Railways (RZD) in Tripoli, Sirte and Ras Lanuf.

“Since February 22, the RF Emergencies Ministry aircraft have made seven flights to Libya - five to Tripoli and two - to Sirte. The ministry planes have evacuated 510 people, 341 of them – Russian citizens,” the ministry reported.

Ferryboat with Russians evacuated from Libya arrives in Malta

http://www.itar-tass.com/eng/level2.html?NewsID=16003118&PageNum=0

02.03.2011, 09.34

MOSCOW, March 2 (Itar-Tass) -- The St. Stephan 2 ferryboat with Russian citizens evacuated from Libya arrived in Malta, a source in the information department of the Ministry of Emergency Situations told Itar-Tass on Wednesday.

“The ferryboat, which left the Libyan port of Ras Lanouf in the evening on February 28, arrived at 8 a.m. Moscow time in Valletta and is anchored now,” the source said.

The ferryboat was carrying 397 people, including 126 Russian citizens with two children and 21 citizens of other CIS states.

An EMERCOM airplane will bring citizens from Russia and other CIS states to Moscow from Malta. The Il-62 arrived at the Luke airport overnight to Wednesday. The airplane is to bring citizens from Russia and other CIS states to Moscow already on Wednesday afternoon.

Fierce clashes have been going on between the opposition and the pro-government troops and mercenaries in Libya since February 15. According to some reports, about 2,000 people were killed in the riots.

EMERCOM has been evacuating Russian citizens from rebellious Libya since February 22 under presidential instructions. Russian citizens mainly worked in Russian oil companies on contract with RZD in Tripoli, Sirt and Ras Lanouf.

“Since February 22 the EMERCOM airplanes have made seven flights to Libya, including five flights to Tripoli and two flights to Sirt. The EMERCOM airplanes have evacuated 510 people, including 341 Russian citizens,” the source underlined.

Moscow offers to host Russia-NATO Council in Sochihttp://english.ruvr.ru/2011/03/02/46807068.html

Mar 2, 2011 00:56 Moscow Time

Moscow has offered to host the first meeting in this country of the Russia-NATO Council.

This was reported by Russia's permanent representative to NATO, Dmitry Rogozin.

Today he handed the Alliance’s Secretary General Anders Fogh Rasmussen an official letter, confirming the Russian President’s decision to host one of the ambassadorial meetings of the Russia- NATO Council in Sochi.

According to Rogozin, the meeting may take place in the second half of this year.

The last time the Ambassadors of the Russia-NATO Council visited Russia in June 2007.

Back then, they traveled to Moscow and St. Petersburg.

Sochi may host NATO-Russia Council meeting in summerhttp://www.kyivpost.com/news/russia/detail/98694/

Today at 10:39 | Interfax-Ukraine Brussels - Russian envoy to NATO Dmitry Rogozin has handed an official invitation to NATO Secretary-General Anders Fogh Rasmussen to hold a Russia-NATO Council meeting in Sochi in summer.

"At a meeting with the NATO secretary-general, I handed him an official letter confirming Russian President Dmitry Medvedev's invitation to meet with the participants in an ambassadorial Russia-NATO Council [meeting] in Sochi in summer this year. This kind of a meeting could deal with the most important issues on the Russia-NATO agenda, primarily missile defense issues," Rogozin told Interfax following a meeting with Rasmussen on Tuesday.

The last ambassadorial Russia-NATO Council meeting took place in St. Petersburg in June 2007.

"Enough time has passed now to hold this event in Russia, this time around in the southern part of our country. The Russia-NATO Council member states will make a decision on taking part in this meeting in the near future, and we hope it will take place in Sochi in July," Rogozin said.

"The Russian president will be willing to receive the NATO secretary-general and the ambassadors from the alliance member states," Rogozin said.

"I think such a contact will be more than welcomed by our partners," he said.

Read more: http://www.kyivpost.com/news/russia/detail/98694/#ixzz1FQn0JHt7

Russia May Challenge China’s Rare Earth Dominance

Posted 3/2/2011 1:22 AM by Michael Montgomery from International Business Times in Investing, Commodities

Read more: http://community.nasdaq.com/News/2011-03/russia-may-challenge-chinas-rare-earth-dominance.aspx?storyid=59994#ixzz1FQP7ghdI

The dominance of China over the rare earth market is well documented. The country controls over 95 percent of the world supply. However, due to changes in trade policy, the world is actively seeking out new deposits to secure supply of these vital elements. The Chinese stated earlier in the month that ' drastic ' changes to their rare earth industry are coming soon, and even reports that the country will keep more of their production for a strategic stockpile. The cuts to exports and subsequent price increases helped China increase the value of their exports in January by 376 percent "despite a decline in volume of 29 percent from January of last year," reported the International Business Times . The world is no longer privy to the whims of Chinese trade policy and is seeking new secure supply.

The potential for even deeper cuts to exports loom over the entire industry. The search of new and economically viable deposits covers the entire globe from Greenland and South Africa, to Russia, Kazakhstan and North America. The dramatic price increases for the various metals have made many of the projects economically viable when just a year ago they were not.

Rare earth mines in Russia that were not planned to be developed until 2030 are quickly becoming more enticing. Russia is home to the second largest explored rare earth reserves in the world yet produces very little REEs. There are two main deposits that are being considered. First is the Lovozersk deposit which has ore reserves that can be surface-mined are estimated at 80 million tons. This deposit also has the benefit of a processing plant on site, as of now the plant mainly produces magnesium, "the rare earth metals business is merely auxiliary." However, as prices for the materials skyrocket, REEs may become more central to their business.

The Tomtor deposit is said to have incredibly high concentrations of REEs. "REM content in its ores reaches a phenomenal 12 [percent]. Moreover, its proven reserves total 150 million tons, while possible reserves may exceed all the rest of the world's reserves combined," reported Ivan Rubanov , for The Telegraph .

The interest in these sites is coming from Japan's Sumitomo Corp., and Mitsui and Co. who held talks with the Governor of Yakutia, the area where these deposits exist. They were not slated to be developed for another two decades, however, "Now there's good reason to reconsider our position on rare-earth deposits in Yakutia that were scheduled for development after 2030," stated Governor Yegor Borisov . The Governor went on to state that he was in talks with Moscow about potentially auctioning the deposits by 2014, however, the 'Federal Subsoil Agency' declined to comment.

These are not the only deposits in Russia, or her former satellites, with potentially large deposits. Stans Energy Corp. (CVE: RUU ) is actively working on their Kutessay II deposit in Kyrgyz Republic, which previously produced 80 percent of the former USSR's rare earth supply from 1961-1991. The company recently announced that it had purchased a former producing rare earth processing plant as well as a private rail terminal for the shipping of their products.

The Federation of German Industry (BDI) has been eyeing deposits in the former Soviet satellite of Kazakhstan. Germany hopes to get access to the raw materials in an effort to secure supply chains in because of the issues with the reduction of Chinese exports.

An outright ban on exports from China would not be taken lightly from the WTO and would probably be disallowed. Regardless of a ban, the demand for rare earth is expected to rise to 180,000 tonnes by 2014. Currently, China is not producing enough material for world demand. There will be some help from the likes of Molycorp and Lynas Corp. but their supply will also fall short of demand. The supply side issues in the rare earth market are not going to go away time soon.

Russia May Challenge China's Rare Earth Dominance originally posted on rareearthinvestingnews.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Hayots Ashkharh: No great expectations about Presidents’ meeting in Sochi, NKR Vice Speaker says

http://news.am/eng/news/49857.html

March 02, 2011 | 09:12

The expectations about the Armenian, Azerbaijani and Russian Presidents’ meetings in Sochi are the same, as they were on the threshold of the OSCE Summit in Astana. I see no basis for change of status quo in 2011. I think any basic document is unlikely to be signed, as it will be possible only when Nagorno-Karabakh joins the negotiations process, Vice Speaker of NKR National Assembly Arthur Tovmastyan stated. He commented on the Armenian, Azerbaijani and Russian Presidents’ meeting in Sochi on March 5.

“At the moment an agreement is unlikely to be signed as the conflicting parties fail to converge their positions. I agree with U.S. Ambassador to Armenia Marie Yovanovitch’s statement that peace is the only solution to the problem and a political solution is to be found,” he said.

“One thing is clear: conflicts are solved if there is an atmosphere of confidence between the conflicting parties. Today, both two people and two leaders lack it. It should be made clear whether the Azerbaijani side is ready to clarify further relations with NKR leadership,” Tovmasyan told Hayots Ashkharh daily.

Nagorno-Karabakh war to damage mostly Russia, Georgian expert says

http://news.am/eng/news/49833.html

March 02, 2011 | 03:04

The war in Nagorno-Karabakh will damage mostly Russia, Georgian political scientist Soso Tsintsadze said.

According to him, “although the tension in the region is growing, large-scale hostilities in Karabakh are unlikely in the near future,” Georgian Pirveli agency reports.

The expert believes that the Karabakh war will be fraught with consequences for other countries. “It is obvious that Turkey will dance to Azerbaijan’s pipe, as it is its strategic partner. The only partner for Armenia is Russia, but I am confident that Georgia will let Russia into its territory to provide Armenia with weapons,” Tsintsadze said.

US-Russian cooperation 'has prospects' on Nagorno Karabakhhttp://www.news.az/articles/politics/32247

Wed 02 March 2011 07:37 GMT | 8:37 Local Time

'I don’t think that at the moment there is much prospect of a renewal of US activism in South Caucasus'.

The statement came from Neil MacFarlane, a career analyst and specialist on the regional dynamics of the former Soviet Union, who currently leads a Department of Politics and

International Relations at the Oxford University.

According to him, major Western governments are dealing with significant domestic challenges (political and economic), and they are very much focused in foreign policy on the Arab world.

'In the region, their major focus is management of their relations with Russia. Proceeding with Nabucco may change this slightly, but not much', he says.

Meanwhile, Prof. MacFarlane believes that, there is a prospect on Nagorno-Karabakh for US-Russian cooperation, and both are very fully aware of this problem.

'Neither side wants a blowup and the Russians, in particular may be concerned about getting stuck with a situation where they have to choose between Armenia and Azerbaijan. But I don’t see any evidence that the major parties to the Karabakh conflict are willing to make the concessions necessary to resolve the conflict', Prof. MacFarlane added.

Touching upon the negotiation efforts around the conflict, the analyst mentioned that, the contradiction between territorial integrity and national self-determination is often misunderstood.

'The legal principle of territorial integrity applies to interstate relations, not to majority-minority relations within a state. The legal discussion of self-determination focuses on whether people can determine their own futures and control their own affairs. Except in colonial situations and in conditions of massive violation of rights, international law does not have much to say about secession. If there is reasonable prospect of exercising self-determination within the boundaries of the existing state, most lawyers would argue that the principle of self-determination does not imply a right to secede', he says, adding, "the Madrid principles are not a bad place to start in getting out of the current impasse".

Speaking about the Caucasus security situation the analyst pointed out that, things have settled down since 2008. "The Russians seem content with what they got. Georgia seems uninterested in trying to take it back".

"The underlying security dynamic may be unstable because of Nagorno-Karabakh".

Asked if Georgia and Azerbaijan can become as a NATO member in the nearest perspective with the unsettled conflicts in their territory, Prof. MacFarlane mentioned that, it is not obvious how alliance membership would improve regional security in the Southern Caucasus.

"The conflicts clearly are an obstacle to membership, but the principal obstacle is Russian opposition, and the Russian willingness to enforce that point as they did in Georgia in 2008", he argued.

APA

Kyrgyz Parliament Speaker suggests simplifying labor activity legalization02/03-2011 10:24, Bishkek – 24.kg news agency

Speaker of Kyrgyz Parliament suggests to Federal Migration Service of Russia to conclude the agreement, which would simplify legalization of migrants’ labor activity in the host country, Akhmatbek Keldibekov said during the meeting with the Head of FMS of RF Konstantin Romodanovsky.

“During the meeting, the sides discussed issues of Kyrgyz labor migrants rights protection, working at the territory of the Russian Federation. In particular, the Speaker of the Kyrgyz Parliament noted the need for inter-parliamentary and intergovernmental agreements, simplifying the work legalization process and increasing awareness of citizens on work rules at the territory of the Russian Federation. He referred to official data and said that 580 thousand of Kyrgyz citizens work in Russia, whereof only 17 thousand received work permits,” reported press-service of Parliament.

According to them, Konstantin Romodanovsky in his turn said that Russia needed skilled workers and corresponding agreement with Kyrgyz Ministry was to be signed.

URL: http://eng.24.kg/cis/2011/03/02/16616.html

Moscow alarmed by trial of Russian citizens in BelarusToday at 09:36 | Interfax-Ukraine Moscow, March 2 (Interfax) - Moscow is alarmed by the situation surrounding the trial of Russian citizens Artyom Breus and Ivan Gaponov in Belarus and hopes for an impartial and fair ruling, said the Russian Foreign Ministry.

"We will wait for the court's ruling and hope for an impartial and fair verdict, which would meet international law standards, including in the area of fundamental human rights," the Russian Foreign Ministry said in a statement on its website on Mar.2.

The trial of Breus and Gaponov was continued in Minsk on Mar.1.

"Unfortunately, there are no reasons to talk about a positive development of the situation. After Breus's and Gaponov's indictment collapsed visibly at the previous session, everybody expected a decision on closing down their judicial prosecution. However, everything went different, because the indictment itself remained the same but a large group of new witnesses comprising law enforcement agencies joined the proceedings," it said.

"This turn of events can only be alarming," it said.

Read more: http://www.kyivpost.com/news/russia/detail/98688/#ixzz1FQVOnDaN

Presidential adviser: Russia expects serious electoral surprises in upcoming parliamentary election campaignhttp://en.trend.az/news/politics/1838345.html

02.03.2011 11:25

Kazakhstan, Astana, March 2 /Trend A. Maratov /

Russia expects serious electoral surprises in the upcoming parliamentary election campaign, Adviser to the Kazakh President Yermukhamet Yertysbayev said in an interview with the Kazakh newspaper Liter.

"I think that the Kremlin will experience serious electoral surprises in the upcoming parliamentary election campaign. In contrast to the Kazakh opposition, the Russian opposition can unite," Yertysbayev said.

He said the Union of Democratic Forces can enter the State Duma, and this may become a serious starting point for the opposition in the presidential campaign in 2012.

"The prospective presidential candidate from the United Russia party, whoever he is, Medvedev or Putin, will have a hard time. Now 50 percent of the Russians are ready for active civil speeches," he said.

Yertysbayev believes that the presidential elections in Russia in March 2012 will be fundamentally different from the 2008 election, when the winner was known in advance.

Russia protests over Bout prison conditionshttp://english.ruvr.ru/2011/03/02/46813212.html

Mar 2, 2011 09:36 Moscow Time

Russia has filed a protest with American authorities over the conditions of Viktor Bout’s confinement in the United States.

Bout has been put in a separate cell and is barred from going for a walk in the prison yard or having one-on-one meetings with his lawyer.

Russian consular officials see his incarceration conditions as being at odds with the requirements on international law.

Viktor Bout was detained in Thailand on charges of arms smuggling in 2008.

Last year he was extradited to the United States, where he is charged with supporting terrorism.

Russia still adamant on not recognizing Kosovo

http://www.rbcnews.com/free/20110302112909.shtml

      RBC, 02.03.2011, Moscow 11:29:09.Russia remains committed to its position not to recognize the self-proclaimed Republic of Kosovo, Russian Deputy Foreign Minister Vladimir Titov said at a meeting with Lamberto Zannier, head of the UN mission in Kosovo, the Foreign Ministry announced today.

      The Kosovo problem can be resolved only through talks based on UN Security Council Resolution 1244, which stipulates among other things that Serbia should have a say on the independence of Kosovo, Titov noted. However, the Kosovo Republic unilaterally announced its independence on February 17, 2008 contrary to Serbia's position.

Lavrov: Russia urges Belgrade and Pristina to talk http://www.emg.rs/en/news/serbia/148717.html

02. March 2011. | 06:10

Source: Tanjug

Russia urges Belgrade and Pristina to talk, and hopes that will happen soon, Russian Foreign Minister Sergey Lavrov stated in Geneva on Tuesday.

Russia urges Belgrade and Pristina to talk, and hopes that will happen soon, Russian Foreign Minister Sergey Lavrov stated in Geneva on Tuesday.

It is time they sat at the negotiations table and discussed the issues. I hope that will happen soon, Lavrov said at a press conference, and the Russian news agency RIA Novosti reported.

In Geneva Lavrov participated in the Conference on Disarmament.

The Belgrade-Pristina dialogue could commence in few weeks, after, as Tanjug learned at the EU, certain consultations are held.

Borislav Stefanovic, the head of Serbia's team for talks with Pristina, said that the topics for the negotiations are still under review.

"The most important thing for us are the problems Serbs in Kosovo face and we shall try to settle those immediately, while the sovereignty issues will be discussed in the later stages," Stefanovic explained.

Presentation of Skolkovo in Paris todayhttp://english.ruvr.ru/2011/03/02/46809515.html

Mar 2, 2011 07:18 Moscow Time

Presentation of the Russian Innovation Center Skolkovo takes place today in Paris. Memorandums will be signed on its cooperation with the European consortiums EADS and Alstom. During the day the Russian delegation will visit the cities of Evry and Grenoble, to get acquainted with the work of major research centers.

  Skolkovo is called to become the largest in Russia, "innovative capital fund." A desire to become its partners has already been announced by such world renowned companies as Intel, Siemens, Microsoft, Cisco, "Nokia".

DATE:02/03/11SOURCE:Flight InternationalMyanmar to receive new batch of MiG-29s from Marchhttp://www.flightglobal.com/articles/2011/03/02/353771/myanmar-to-receive-new-batch-of-mig-29s-from-march.html

Myanmar will in March receive the first of 20 RSK MiG-29s ordered under a roughly €400 million ($553 million) deal, with their introduction to more than double the country's MiG-29 fleet.

Ordered in November 2009, the aircraft will be delivered in three configurations, comprising 10 MiG-29B and six MiG-29SE single-seat fighters and four MiG-29UB twin-seat operational trainers.

The acquisition effectively clears the remaining MiG-29B/SE stock at RSK MiG's Lukhovitsy plant, with the airframe parts having been manufactured in the Soviet and Perestroika eras. Myanmar's aircraft will be delivered in an original export configuration, with analogue instruments and Phazotron N-019 radars.

Myanmar previously bought used MiG-29s from Belarus, but approached the type's manufacturer and Russian arms export company Rosoboronexport for help after encountering a high attrition rate. Moscow responded with help on weapons, spare parts and training, including the installation of a simulator at one of its air bases.

Acquiring an additional batch of fighters directly from RSK MiG should radically improve the combat readiness and effectiveness of Myanmar's fleet, sources say. Its air force now has 12 MiG-29s, says Flightglobal's MiliCAS database.

Meanwhile, RSK MiG says a new logistics support system to be established in co-operation with Indian companies will enable it to provide increased customer support for the nation's MiG-29s, plus those flown by the air forces of Malaysia and Myanmar.

Russia lacks enough carrier rockets to fulfill 2011 launch planshttp://en.rian.ru/russia/20110302/162823663.html

09:11 02/03/2011

Russia lacks carrier rockets to carry out all space launches scheduled for 2011, the head of the Roscosmos space agency said on Wednesday.

"We have a number of spacecraft that should be launched this year, but we do not have [enough carrier] rockets," Roscosmos chief Anatoly Perminov said in an interview with the Voice of Russia radio station.

He also noted that there were more launches planned for this year than during 2010.

Last year, Russia led in the number of space launches, carrying out 31 launches, 15 more than the United States.

In late January, Perminov said Russia was planning to carry out 48 space launches in 2011, including 9 missions to the International Space Station by Soyuz and Progress carrier rockets.

MOSCOW, March 2 (RIA Novosti)

Russia to keep number of space launches to ISS unchangedhttp://en.rian.ru/russia/20110302/162820759.html

03:16 02/03/2011

Russia's space agency Roscosmos has no plans to increase the number of piloted and cargo missions to the International Space Station (ISS) after the conclusion of the U.S. shuttle program, the head of Roscosmos said on Wednesday.

"We are not planning to increase the number of piloted space flights and the overall number of spacecraft [sent to ISS] after the shuttles are grounded," Anatoly Perminov said in an interview with the Voice of Russia radio.

"At present, we launch four piloted spacecraft and five freighters per year. I believe it is sufficient [to satisfy the needs of the orbital station]," he said.

NASA plans to scrap the shuttle program by the fall this year. The U.S. space agency says the shuttles are outdated and too expensive to maintain.

There are two scheduled shuttle flights remaining - Endeavour will be launched to the ISS in April, while Atlantis is expected to travel to the orbital station in late June.

Russian Soyuz and Progress spacecraft will take the bulk of crew rotation and cargo missions to the ISS after NASA stops launching its shuttles.

MOSCOW, March 2 (RIA Novosti)

Space Service Centers to be set up in 9 Russian regionshttp://english.ruvr.ru/2011/03/02/46808847.html

Mar 2, 2011 04:36 Moscow Time

Space Service Centers will be created this year in 9 Russian regions. The head of the Federal Space Agency Anatoly Perminov spoke of this on the air of the “Voice of Russia”.

One of the centers will be built in Gagarin, Smolensk region.

Such space centers are already operating in 8 Russian regions, including Tatarstan, Kaluga, Yaroslavl, Krasnoyarsk, as well as in the suburban town of Odintsovo outside Moscow.

Space Service Centers are used for satellite monitoring of land, natural resources, real estate, providing security of bridges and power plants.

In addition, the center accumulates information about the location of ambulances, school and passenger buses, traffic police.

Another 5 Glonass satellites to be launched this yearhttp://english.ruvr.ru/2011/03/02/46808176.html

Mar 2, 2011 02:58 Moscow Time

The creation of an orbital group of the satellite navigation system GLONASS will be completed by mid-2011.

This was stated by the head of Federal Space Agency Anatoly Perminov, who said that the plan for this year is a projected 24 spacecraft.

In the second half of 2011 its planned to launch four Glonass-M satellites and one GLONASS-K.

The current orbital group provides 100% navigation on the territory of our country. As for worldwide, on the territory of the globe – its 98%," - said Perminov.

03/02 11:51   Medvedev sacks four generals; Gen. Yevnevich appointed Asst. Defense Minister

http://www.interfax.com/

GOOGLE TRANSLATION

http://www.pravda.ru/news/politics/02-03-2011/1068522-medvedev-0/

Medvedev dismissed four generals 02.03.2011 | Source: Pravda.Ru Russian President Dmitry Medvedev fired several permutations in the armed forces. According to his order, dismissed four generals Defense. Presidential decree dismissed as deputy chief of the 12 th Main Directorate of the Ministry of Vladimir Dummies, suspended from duty, the commander of Submarine Force Base Zaozerskii Rear Admiral Igor Vasiliev. Since military service is also fired Maj. Gen. Michael Gal'tsov and Major General of Medical Service, Vladimir Reshetnikov, write "Case of the week." In addition, transfers portal Yuga.ru, from office Chief of the combat training and service troops of the Armed Forces by presidential decree relieved Lieutenant-General Valery Yevnevich. He was appointed assistant secretary of defense. Colonel Vladimir Zharov was appointed Deputy Commander of the Southern Military District to work with staff - the chief of department on work with staff. Rear-Admiral Alexander Zhuchkov appointed head of the department of operational art of the Navy Military Educational and Scientific Center of the Navy, "Naval Academy, he was dismissed as chief of staff - first deputy commander of the Primorye Flotilla of Diverse Forces Pacific Fleet. 

Putin to attend AKKOR convention in Tambov region Wed

http://www.itar-tass.com/eng/level2.html?NewsID=16002568&PageNum=0

02.03.2011, 02.20

MOSCOW, March 2 (Itar-Tass) - Prime Minister Vladimir Putin will make a working tour of Tambov Region on Wednesday to attend the XXII convention of the Association of peasant (individually-operated) farms and agricultural cooperatives of Russia (AKKOR).

Putin will addresss those present at the conventionand discuss prospects for the development of farms in the countryside, agriculture as a whole, as well as legislative support for the ensurance of the activities of agricultural enterprises, the government press service announced.

First Vice-Premier Viktor Zubkov, Minister of Agriculture Yelena Skrynnik, and representatives of the agriculture-financing Rosselkhozbank, Rosagroleasing, Sberbank, and VTB will take part in the AKKOR convention..

AKKOR is a non-state non-profit organization representing the interests of small- and medium-scale agricultural commodity producers, and promoting the development of farmery, and other small- and medium-scale forms of economic management in Russia.

The Association was established in January 1990 and now comprises 68 regional peasant unions and associations which bring together more than 600 farming organizations at district level, as well as about 1,500 cooperative associations and enterprises of the farmery infrastructure.

"Farmery plays a considerable role in the multi-mode agriculture of Russia: it produced over 55 percent of domestic farm products," a government press service official recalled.

Accordingto preliminary data issued by Rosstat (Federal Agency for Statistics), in 2010,the individually-operated farms harvested 13.3 million tonnes of grain and legumes -- 22 percent of the entire amount of graind produced in Russia (as against 21 pct in 2009), sugar beet-- 2.4 million tonnes, or 11 pct (as against 10 pct in 2009), sunflower -- 1.4 million tonnes or 26 pct of the country's entire harvest (as against 29 pct in 2009).

The cattle stock in individually-operated farms grew by 5.3 pct last year as compared with that in 2009 and amounted to 1.4 milion head, with cows accounting for 5.4 pct (668,000 head).

Notwithstanding the fact that 2010 was a dry and low-harvest year, the farmers produced 1.5 milion tonnes of milk (105.6 pct as compared with that in 2009), 0.3 million tonnes of cattle andpoultry meat in live weight (106 pct as compared with that in 2009), and 300 million eggs (101.1 pct compared with that in 2009).

The programme for the Russian Prime Minister's tour also provides for visits to an individually-operated farm in Bolshaya Lipovitsa Village and to an exhibition of projects

in the agri-industrial sector, farm products and the output of processing-industry enteprrises of Tambov Region, the government press service official said.

Sobyanin likely to be elected to head Moscow URP orgn

http://www.itar-tass.com/eng/level2.html?NewsID=16002789&PageNum=0

02.03.2011, 06.02

MOSCOW, March 2 (Itar-Tass) - The Moscow members of the United Russia party (URP) are to elect a new chief at an extraordinary conference of the Moscow city regional branch (Russian acronym MGRO) on Wednesday.

Moscow Mayor Sergei Sobyanin is expected to be elected to the post, the more so as a proposal to head the URP's city organization he received from URP Chairman and RF Prime Minister Vladimir Putin.

At the conference, Sobyanin, who is a member of the Supreme Council of the URP, is to deliver a report entitled "The Immediate Tasks Facing the Moscow City Organization of the URP".

According to the party charter, participants in the conference at first are to hold a by-election to the regional political council and them members of the political council will elect from among themselves a new leader of MGRO and his deputies.

Sobyanin, 52, has been the mayor of Moscow since October last year. Putin,when offering the party post to him on Februrary 15, said such a decision would be "the right one". "This will be your party assignment," said the URP leader and Russia's Head of Government.

Moscow police detain woman carrying explosiveshttp://en.rian.ru/russia/20110302/162824797.html

10:59 02/03/2011

MOSCOW, March 2 (RIA Novosti) - Police in Moscow have detained a woman carrying explosives, a local police source said on Wednesday.

The woman was detained on Tuesday in a park in northwest Moscow, the spokesman said.

Police are investigating where the "manufactured" explosives seized from the woman were purchased, he added.

The incident comes after a man blew himself up with a grenade outside a supermarket in southeast Moscow on Saturday.

Russia saw one of its deadliest terrorist attacks on January 24, when a suicide bomber attacked Moscow's Domodedovo International Airport. The blast, which ripped through the international arrivals zone, killed 36 people and seriously injured dozens.

Moscow allocates over $480 million for police payhttp://en.rian.ru/russia/20110302/162824844.html

11:02 02/03/2011

Moscow city authorities said on Wednesday they had allocated 14 billion rubles ($486.6 million) to provide for a pay increase for officers of law enforcement agencies responsible for security in the capital.

Moscow Mayor Sergei Sobyanin has pledged that law enforcement officers in the capital will receive a competitive salary.

A draft federal law on Russia's police reform came into effect on March 1. It includes changing the name of Russian law enforcers from "militia" to the internationally accepted word "police," and cutting the number of policemen by 20%, while increasing salaries for those who remain.

A city representative said that the extra payments will be financed from Moscow budget. MOSCOW, March 2 (RIA Novosti)

Moscow Cancels St. Patrick’s Parade, Citing Traffic Concerns http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a9U6mMs1LeS8

By Jason Corcoran

March 2 (Bloomberg) -- Moscow cancelled its annual St. Patrick’s parade as part of first-year Mayor Sergei Sobyanin’s fight against traffic congestion.

The parade honoring Ireland’s patron saint, first held in Moscow in 1992, will be replaced by an indoor concert on Sunday, March 20, said Irish Ambassador to Russia Philip McDonagh.

“This event, of which the city of Moscow is joint patron, replaces the parade -- an experiment we are trying this year in view of the cold weather and the priority that is being given at present to resolving Moscow’s traffic problems,” McDonagh said.

President Dmitry Medvedev cited street traffic as one of the reasons he fired former Mayor Yuri Luzhkov in September after two decades in power, replacing him with Sobyanin, who was Prime Minister Vladimir Putin’s then-chief of staff.

Moscow drivers suffer the longest traffic jams of 20 major cities, with the average motorist spending at least 2 ½ hours stuck in traffic at least once in the past three years, according to an International Business Machines Corp. study published in July.

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

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

Last Updated: March 2, 2011 03:53 EST

Mikhail Gorbachev to celebrate 80th birthday with family, friendshttp://en.rian.ru/russia/20110302/162822965.html

Former Soviet president Mikhail Gorbachev will celebrate his 80th birthday on Wednesday in a low-key atmosphere, surrounded by family and friends in Moscow.

Gorbachev, the so-called "architect of perestroika and glasnost in Russia," is still worshiped by some Russians for bringing freedom and democracy to the country, while many others consider him a weak politician, who ruined the Soviet empire.

His controversial image in Russia could be one of the reasons why the main celebrations of his birthday will take place later in March in the West, where he is seen as a symbol of the liberalization of Soviet life and the ending of the Cold War.

The London Royal Albert Hall gala concert on March 30 will feature performances by Scorpions, Brian Ferry, Welsh mezzo-soprano Katherine Jenkins, Belgium's Lara Fabian, Russia's baritone Dmitry Khvorostovsky, and ex-Spice Girls Melanie C.

Hollywood star Sharon Stone will host the event.

Gorbachev will award for the first time his eponymous prize "The Man who changed the world".

All proceeds from the event will go to charity programs.

Gorbachev was the seventh and last leader of the Soviet Union and is well known for his reform attempts, which led to the dissolution of the Soviet Union. He was awarded the Nobel Peace Prize in 1990.

MOSCOW, March 2 (RIA Novosti)

Gorbachev celebrates 80th birthdayhttp://rt.com/news/gorbachev-birthday-perestroyka-mikhail/print/

Published: 2 March, 2011, 09:27Edited: 2 March, 2011, 11:58

The end of the Cold War, the reunification of Germany, liberalism and Perestroyka. The USSR's first and last president, Mikhail Gorbachev celebrates his 80th birthday today, and his legacy includes being hailed as the father of Russia's democracy.

Gorbachev was born in a small village in the south of the country, and became leader of the USSR in 1985.

With his economic and political reforms, he paved the way for democracy in Russia. His best known reform is dubbed “Perestroyka”, which aimed to revamp the country without destroying the basis of socialism.

His initiatives also led to the abolishment of state censorship and the creation of free speech in the country.

Gorbachev received the Nobel peace prize in 1990. A year later, however, he was removed from power in a coup which saw the collapse of the Soviet Union and Boris Yeltsin become president.

But Mikhail Gorbachev still says his reforms were timely and necessary.

“We realized from experience that it was dangerous to wait much longer, that we had to take a risk,” he told RT in an interview. “But we couldn’t postpone it, we needed changes.”

Gorbachev does not agree when people say that Perestroyka failed:

“It didn’t fail. It was disrupted, derailed, stopped. But still, Perestroyka achieved a lot. Inside Russia, we had democracy, free elections, freedom of consciousness, private property, freedom to travel abroad –everything. Also, glasnost. There was so much openness – the entire country was affected. People realized they had finally got some freedom, an opportunity to act.”

The first USSR president points out that the end of the Cold War was among key goals of his administration:

“In foreign affairs, we put an end to the Cold War. We normalized our relationship with the US, we reunited Germany – we didn’t send our tanks or troops there. All our units in Eastern Europe stayed where they were. It wasn’t always easy.”

However, many things did not work as planned, Gorbachev confessed.

“At the beginning, when we made our first mistakes, we didn’t really explain to people what was going on and didn’t get them involved in all those processes – we were self-confident,” he said.

“But in public politics, I don’t think we ever lost a major battle,” Mikhail Gorbachev concluded.

Moscow gets placement centre for migrantshttp://www.newsbcm.com/doc/65101.03.2011 16:15

On the first day of March, Moscow opened its first employment office for migrants. It will work in the interests of foreign nationals who arrived in the capital of Russia without requests for employment from employers and have not yet found jobs.   "Currently, the office for individual migrant workers is being tested in conjunction with the FMS in order to find workplaces for them. The office is located at the Metro station ‘Avtozavodskaya’, and migrants will be also able to receive medical insurances there", said the head of the Moscow Department of Labour and Employment, Oleg Neterebsky, at the Moscow Government meeting.   According to the official, now the Department is also developing the concept of the migration policy for the capital of Russia. Neterebsky also noted that, as of January 1, 2011, a new office for receiving applications from employers interested in hiring foreign workers had begun to work in Moscow.

PRESS DIGEST - Russia - March 2http://af.reuters.com/article/energyOilNews/idAFLDE72102520110302

Wed Mar 2, 2011 7:29am GMT

MOSCOW, March 2 (Reuters) - The following are some of the leading stories in Russia's newspapers on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Russia's natural gas monopoly Gazprom (GAZP.MM) has paid 22.3 billion roubles ($773 million) to control the giant Kovykta gas field in Siberia.

- Russia's banking sector finished 2010 with record high revenues, the daily says publishing the rating of Russia's banks.

- Former head of the Plesetsk space field, General Anatoly Bashlakov has been sentenced to 7 years in prison for a 700 rouble bribe.

VEDOMOSTI

www.vedomosti.ru

- Russia's tycoon Roman Abramovich could become the main investor in the reconstruction of Gorky Park in Moscow.

- Russia's anti-monopoly watch dog, FAS, wants to allow foreigners to buy up to 25 percent of shares in Russia's oil and gas companies without special permission from the government.

RBK DAILY

www.rbcdaily.ru

- Russia's government wants to start doubling excise duties for tobacco every year starting from 2012.

- Russia's government will have to consider ways to find jobs for almost 38 million people who could lose their jobs as a result of the modernisation of the local economy, the daily says.

NEZAVISIMAYA GAZETA

www.ng.ru

- Dmitry Medvedev is becoming de-facto the main candidate in the 2012 presidential election race, the daily says citing a prominant political analyst Gleb Pavlovsy.

- Russia's Defence Minister Anatoly Serdyukov is worried over the failure of the military industry to fulfil state orders for modern arms and equipment for the army in 2010.

NOVYE IZVESTIA

www.newizv.ru

- The Chechen leader Ramzan Kadyrov protests against suggestions that people from the North Caucasus are responsible for attacks on civilian targets in Russia and urges police to avoid naming nationality of suspected attackers.

Russian Press at a Glance, Wednesday, March 2, 2011http://en.rian.ru/papers/20110302/162824946.html

11:15 02/03/2011

POLITICS

A senior Russian senator has accused Georgia, and in particular Georgian President Mikheil Saakashvili, of involvement in the Domodedovo Airport suicide bombing that killed 37 people, provoking angry denials and condemnation from Tbilisi. (Moscow Times)

ECONOMY

Russia’s energy giant Gazprom outbid another government-controlled contender for the right to develop the Kovykta field near China's border, preserving its gas monopoly in the country. (Kommersant, Vedomosti, Moscow Times)

Russia’s Central Bank claims that strengthening of the Russian ruble is the most efficient way of fighting inflation in the country. (Kommersant, Vedomosti, Izvestia)

Russia’s Federal Anti-Monopoly Service has proposed amendments to legislation, which allow foreign investors to buy up to 25 percent of stake in Russian energy companies without prior approval by the Russian government. (Vedomosti)

Gazprom occupies the last place on the list of corruption transparency among 44 energy companies that produce 60 percent of oil and gas in the world.

Russian may soon impose taxes on amateur fishing, bringing up to 75 billion rubles ($2.5 billion) to the state budget. (Rossiiskaya Gazeta)

TRAVEL

Russia may cancel visas for foreigners, a senior Federal Border Service official said Tuesday, adding that the move would not harm security and might attract more European tourists. (Moscow Times)

SECURITY

The Kremlin's much-touted police reform will kick off on Wednesday with a massive purge, with more than 100,000 officers set to be laid off by May. However, the reforms will only slightly affect the central bureaucratic structure of the Interior Ministry. (Moscow Times, Kommersant, Rossiiskaya Gazeta, Izvestia)

DEFENSE

The Russian military has completely lost control over the troubled high-tech Geo-IK-2 satellite despite earlier announcements that it could be still salvaged. (Kommersant)

SOCIETY

Former Soviet president Mikhail Gorbachev will celebrate his 80th birthday on Wednesday in a low-key atmosphere, surrounded by family and friends in Moscow. (Rossiiskaya Gazeta)

Moscow Mayor Sergei Sobyanin has announced a start of a new campaign targeting illegal migration. Police has been ordered to conduct a thorough search of abandoned buildings and other potential hideouts of illegal migrant workers. (Kommersant)  

Russian billionaire Roman Abramovich says he is ready to invest in the reconstruction of the famous Gorky Park in downtown Moscow. (Vedomosti)

Gender stereotypes prevent most Russian women from building a successful professional career. (Vedomosti)

Protest mood tests Putin as poll countdown beginshttp://www.abs-cbnnews.com/global-filipino/world/03/02/11/protest-mood-tests-putin-poll-countdown-begins

by Stuart Williams, Agence France-PressePosted at 03/02/2011 1:29 PM | Updated as of 03/02/2011 1:29 PM

MOSCOW, Russia - Rumblings of protest and increased criticism of the authorities on the Internet present a new test for the Russian ruling elite led by Vladimir Putin one year before presidential polls, analysts said.

But while Russia has in the last months seen unusual protests on issues ranging from sirens used by officials to a highway through a forest and time zones, they do not -- for now -- pose the risk of an Egypt-style turnaround.

The last presidential elections held on March 2, 2008, delivered Dmitry Medvedev to the Kremlin for a four year mandate, taking over from Putin who had served a maximum two terms and instead became a powerful prime minister.

Putin, still seen as Russia's de-facto leader, now has the right to stand again as president. He and Medvedev have made two things clear -- they will not compete against each other and they will decide who will stand nearer the time.

A crucial indicator will be parliamentary elections at the end of 2011 which will test the dominance of the ruling party United Russia in regions which have seen the biggest protests against authorities.

These include Moscow and Saint Petersburg as well as further-flung regions with a tradition of liberal thinking and a string of local gripes against the Kremlin like the western Kaliningrad exclave and the Far East.

In one bizarre incident in the Far East Kamchatka region, the authorities tried to ban a production of Cinderella when audiences cheered wildly at what they saw as a subliminal protest against a Kremlin-imposed time zone change.

"The mood has changed and there are reasons to be worried," pro-Kremlin analyst Sergei Markov, a United Russia MP in the State Duma parliament, told AFP.

"The ratings for the authorities remain very high but the protest mood is growing in the country," he added. "This pre-election year promises to be more stormy than the last."

The Internet -- finally now penetrating deep into Russia -- has allowed activists like whistleblowing shareholder Alexei Navalny to expose abuses at state firms or bloggers to claim Putin is building a lavish new dacha on the Black Sea.

Forums like Live Journal and social networking sites have given critical Russians a chance to spread their views, be it criticising the authorities on their response to terror attacks or mocking the mascots for the 2014 Olympics.

According to the Renaissance Capital brokerage, Russia's Internet penetration rate is still only 45 percent, compared with 84 percent in Britain, but broadband Internet access is now expanding fast.

"Opposition supporters are particularly speaking out on the Internet," said Markov. "For the moment this protest has no defined political expression but if it gets one, it could change the election campaign."

And there is much fodder for complaint.

Corruption remains endemic and events like the murder of 12 people in a farmer's house in south Russia in November by a known criminal group expose how anarchy has been allowed to rage unchecked in some places.

"There is dissatisfaction and for the State Duma elections United Russia will see a drop in its support," liberal political analyst Dmitry Oreshkin told AFP. "But the situation has not yet reached a crisis."

"The oil price is high and this covers the holes."

Russia remains in suspense over which of the ruling duo will choose to stand and win an almost certain victory on the back of continued popularity and slavish state media support.

Medvedev has tried to shrug off his image as a puppet of Putin.

One of his most radical moves has been a shake-up of Russia's regional governors, removing unpopular bosses in Kaliningrad and Kamchatka, Muslim strongmen in Tatarstan and Bashkortostan and Moscow mayor Yuri Luzhkov.

Yet observers say that all official meetings on strategy for the next decade are chaired by Putin and not Medvedev while top civil servants are acting on the assumption that Putin will continue to be their supreme boss.

Yet while Russia's elite prepares to consolidate its power in the 2012 polls even as the Arab revolts shake the Middle East, its ride in the medium term may not be so easy.

Long-serving Finance Minister Alexei Kudrin said this month that only fair elections would provide the authorities with the legitimacy to carry out change, a comment whose bluntness stunned some observers.

According to Dmitry Belousov of the Centre for Macronomic Analysis and Forecasting which advises the government, Russia's economy risks falling into an inertia of dull growth, soaring imports and growing devaluation risks.

Already in 2014-2015, Russia could fall into a "Latin American" cycle of repeated devaluations, he said.

"There are objective reasons for concern on the part of the authorities," said Oreshkin.

"They have the subjective feeling that they control the situation. But this is what the Arab regimes had. A false feeling that everything was under control."

Russia gazes East with new defense plans http://opinion.globaltimes.cn/commentary/2011-03/628934.html

Source: Global Times

[08:17 March 02 2011]

By Liu Qian

Russia seems to be tired of its recent verbal war with Japan over the disputed Southern Kuril Islands, or, as the Japanese term them, the Northern Territories. Now it's facing the conflict to a new level.

On February 9, Russian President Dmitry Medvedev called on Defense Minister Anatoly Serdyukov to strengthen the defense of these islands, bringing a more military aspect to the territorial dispute.

When Medvedev met with Serdyukov and Viktor Basargin, Minister of Regional Development, he said that the Southern Kuril Islands were an inalienable part of and a strategic bulwark for Russia. He indicated that the forces stationed there should be equipped with up-to-date weaponry.

According to reports by the Russian press, the military equipment currently used by forces in the Southern Kuril Islands is seriously outdated. Alexander Khramchikhin, the Deputy Director of the Moscow-based Institute for Politics and Military, described them as "antiques even in the 1950s."

A senior member from the General Staff Department of the Russian Army said that troops on the islands would be equipped with anti-aircraft guns, anti-aircraft missiles and even the newest S-400 air defense system. On Friday, Nikolai Makarov, chief of the General Staff of the Russian Armed Forces, said that one to two ships might also be sent to the Pacific fleet to deal with the security issues there.

After the disintegration of the Soviet Union, Russia's strategic center has been moving toward the West. The Kremlin had to deal with an expanding NATO and had no time to develop its influence in the East.

When the Asia-Pacific region became the focus of world attention, with many countries enhancing their military and economic power there, Russia had to admit that it had fallen behind in the region. However, after Medvedev reached an agreement with US President Barack Obama in the missile defense, Russia had energy to develop in the East.

To some Russian experts, the intensified military operations between the US, Japan and South Korea in the Asia-Pacific region not only aimed at intimidating North Korea and China, but also displayed their military might to Russia.

Khramchikhin claimed that it is entirely possible for Japan to take military action if a radical crisis emerges in East Asia, as they have a territorial dispute with Russia. He added that the military forces currently stationed in the Southern Kuril Islands couldn't contend with Japan.

Russian actions, from Medvedev's visit to the islands to the current plans for rearmanent, show that the nation's strategic purpose is to rebuild its strategic position in the Asia-Pacific.

Other countries in the region are also involved to some degree. Russia has tried to draw other countries to its side on the issue, inviting Chinese and South Korean companies to tap business in the disputed area. The Russian Foreign Ministry called on the US not to intervene in the dispute.

If Russia enhances its naval and air abilities in the Southern Kuril Islands, and expands its Pacific fleet to strengthen the ability to launch marine attacks, the military forces in the islands will be capable of working in concert with military bases in Vladivostok and the Kamchatka Peninsula.

This will certainly affect the security strategy of neighboring countries, and even intensify the potential arms race in Northeast Asia.

The author is a Beijing-based journalist. forum@globaltimes.com.cn

Analysis: Russia turns military gaze east to counter Chinahttp://www.reuters.com/article/2011/03/01/us-russia-china-military-idUSTRE72027S20110301

Tue, Mar 1 2011

By Thomas Grove

MOSCOW (Reuters) - With warships and missiles, Russia is flexing its muscles in the Far East in a bid to defend its position as an Asian power against China's growing might.

China's rise has forced Russia's leaders to turn their gaze eastward and reassess decades of Soviet-era planning for a land war on the European plain or the nightmare of a nuclear conflict with the United States.

The match between the world's largest energy producer, Russia, and its largest energy consumer, China, might seem ideal. But the speed at which China's military is growing

presses the question: how can Moscow feed the Chinese dragon with oil and gas but still contend with its increasing power?

Russia's attempt to muscle back into the Far East, riddled with territorial conflicts and eyed by the world's top two military spenders -- the United States and China -- is Moscow's best, albeit imperfect, response to that question.

"Russia is still an Asia-Pacific power," said Pavel Baev of the Peace Research Institute Oslo. "Moscow's plans are definitely a signal to China that Russia takes this area seriously."

Russia's paramount leader, Prime Minister Vladimir Putin, has promised more than $651 billion in defense spending over the next decade for an annual average of around $65 billion a year. The country spent $61 billion last year.

United States core military spending was $530 billion last year, while China, the world's second largest military spender, said it put nearly $78 billion into arms in 2010, although some analysts believe that number may be higher.

Among the first arms to be sent east will be the two Mistral helicopter carriers that Moscow agreed to buy from France late last year and are expected to arrive in Russian hands in late 2013. A unit of the Russian S-400 air-defense missile system, able to counter missiles and aircraft, will also be planted in the Far East.

Deputy Defense Minister Nikolai Pankov said in an interview with Ekho Moskvy radio last month that the military was giving its Far East forces "top-priority attention."

A new nuclear arms limitation treaty between Russia and the United States has reinforced statements on both sides that war between Moscow and the West is unthinkable and given the Kremlin room to send more resources east.

ENERGY DEFENSE

President Dmitry Medvedev vowed last month to deploy weapons on a group of small islands at the center of a territorial row with Japan. Medvedev visited the islands in November, followed by top officials including Defense Minister Anatoly Serdyukov.

Emphasizing its claim on the islands Soviet forces occupied at the end of World War Two, Russia has found a reason to boost its arms in the East. But some see talk focused on Japan as a bluff.

"I think that spot was chosen not at random, but as a place where Russia can take a stance without taking any major risks," like upsetting China, said Baev.

Russia took over large swathes of resource-rich eastern Siberia from China through a combination of negotiation and military force in the mid-19th century.

Much of Moscow's policy toward China, Russia's largest trade partner with some $9.5 billion in bilateral trade, has been formed around fears Beijing wants that thinly populated land back, either as room for its burgeoning population or to exploit for the minerals, oil and gas it holds.

In 2008 Moscow ceded 174 square km (67 square miles) of land to Beijing on their shared border along the Ussuri and Amur Rivers, where the two powers exchanged fire in 1969, leaving nearly 60 dead.

"They're still worried that China will invade Siberia one day because of the resources," Dmitry Gorenburg, a senior analyst at military and public sector think tank CNA, said in an interview last month.

"Because from the Russian point of view it's a very sparsely populated area, hard to defend, very remote from the center of Russia," he said.

Beijing has alarmed neighbors with claims on a series of uninhabited islets that Japan also considers its own.

Russia is by no means looking for a fight with China, but some analysts say Moscow wants to make sure China's territorial claims do not upset a delicate balance of power in the Far East.

Russia and China commissioned the Chinese arm of the East Siberia-Pacific Ocean (ESPO) pipeline this year which is scheduled to send 300,000 barrels of crude per day to China for 20 years.

Russia's naval plans aim to keep it the world's top oil producer by protecting large offshore oil and gas holdings at Sakhalin, where a production-sharing agreement with Exxon (XOM.N: Quote, Profile, Research, Stock Buzz) will help make up for an expected oil shortfall in west Siberia.

China has been a big buyer of Russian arms but its defense orders for Russian arms will be at best flat this year, in part due to the country's own defense industry, which analysts say has come into its own in part by copying Russian technology.

Analysts say China's own fifth-generation fighter plane, which Beijing unveiled during U.S. Defense Secretary Robert Gates' recent visit to China, is little more than a tweaked version of a Russian design.

(Editing by Mark Trevelyan)

Glass ceilinghttp://rt.com/politics/press/vedomosti/russia-women-rights/en/

Published: 2 March, 2011, 05:42

Elena Gorelova and Maria Podtserob

For women in Russia, career growth is hampered as a result of gender stereotypes, including those established by the women themselves. The policies of employers, who in 90% of all cases have already predetermined what a manager’s gender should be, also have a negative effect, say researchers.

“Each work place carries its own gender overtones: the rules of the game are set by the employers,” stated Marina Semina, CEO of Virtuoz Research Agency. “If the managerial positions are, from one year to the next, held by men, then a tradition develops in which women simply stop taking the initiative to apply for these positions.”

For example, the dean of faculty of the Sociology Department at Moscow State University, where she teaches, is a man – and it is highly unlikely that he will be replaced by a woman anytime soon, she argues. It is considered to be a male-dominated environment, and the stereotypes at the top and bottom make it impossible to break the tradition, says Semina.

In 90% of all cases, employers know what the gender of an employee in a certain position should be, explains Irina Kozina, department chair at the Higher School of Economics. Seven years ago she, together with her co-authors, conducted a study of gender employment strategies.

“If an employer had initially wanted to hire a man, then he hired a man, regardless of the women who aspired to the position,” said Kozina.

The study of gender policies in 38 Russian companies showed that there are four guiding principles, says Semina. Male, when the leadership promotes mostly men. Neutral, if both genders have an equal chance to succeed. Female, when the weaker sex has the advantage. And finally, the out-and-out male policy, which mainly exists in companies with former military officers as executives; there, it is practically impossible for a woman to make a career, adds Semina.

A step backward

“The higher you climb on the career ladder, the fewer women you see around you,” noted Margarita Varganova, marketing director at AGC Glass Europe. Not only are gender stereotypes to blame, but so are limited resources – time and energy – of the women themselves: they are forced to give more time to their family, and children. She says that she has built her career with this in mind: First she got a stable position within her field, and only then decided to have a child. In 10 years of working for ACG, Margarita moved up from the position of sales manager to being a marketing director, before deciding to take maternity leave.

Maternity leave is always a step back on the career track, say 44% of Russia’s female managers – such is the finding of a 2010 study conducted by the nonprofit organization The Committee of 20. This is understandable: In Russia, a working mother does not receive any assistance from the state or the employer, says Yana Mikhailova, director of Nestle Purina in Russia and the CIS.

Our society assigns women the role of a caregiver: if something happens to her parents or children, it is she who must come to their rescue, says Semina.

“When my father became seriously ill, I took care of him for three years, and this had a negative impact on my career,” she recalled. As a result, Semina was forced to resign. “I felt that I was not reaching the bar which I had set for myself.”

Men in the rearguard

What prevents women from building a career? This question was posed by the Russian consulting company Watcom Group to 500 shoppers last weekend. Thirty percent believe that the main obstacle is the psychology of the women themselves. The same number of respondents blames family and the difficulty of combining work and family.

A family, however, could become a barrier just as well as a major source of support. Anna Sokolova, owner of the Syrnaya Dyrka (Cheese Hole) restaurant chain, said that for her, the birth of each of her three children coincided with major career undertakings and did not stop her from achieving success in the business life. When she was promoted to director of the restaurant Absent, she was only 24 years old and pregnant. She would not have been able to build a career in the restaurant business had it not been for the support of her family – husband and parents, she says. Initially, she struggled in her new role of director, and Anna’s husband, who at that time worked as a programmer, resigned and came to work with her in the restaurant.

“Since then, we have been working together,” she noted.

During this time, Sokolova managed to become head of the Syrnaya Dyrka restaurant (while giving birth to their second child) on Pokrovsky Boulevard and buy it from the owner. In the fall of last year, the couple opened a restaurant with the same name on Cherkassky Lane, after which they had their third child.

“In a family business, it usually happens that the husband is the head, and the wife the power behind the throne. In our case, it’s the other way around,” stated Sokolova.

Out-and-out chauvinism

Male chauvinism is the main obstacle for women aiming to have a career, says Anna Kulikova, deputy general director of Muztorg.

“Women started reaching the very top – they hold chair positions in the government, are mayors of large cities, but the feeling of jealously and mistrust in them remains,” she said. “In addition to achieving goals, being tough is also often a requirement – and not every woman is, by nature, able to elbow her way to the top.”

Twelve percent of respondents to the Watcom Group study believe that women’s career growth has been slowed due to discrimination within companies. Nine percent pointed to the stereotype that women work worse than men. And only 7 percent profess awareness of a “glass ceiling” for women preventing career growth.

In Russian companies, prejudice against women is more prevalent than in foreign firms, confirmed The Committee of 20’s research.

“The Russian business sector initially focused on men,” write the researchers.

But an even bigger barrier on a woman’s path to success, say The Committee of 20 researchers, is her mindset, her lack of confidence (perhaps a resulting condition), and her inability to properly present herself and her ideas.

Veni, Vinci, Von!http://russiaprofile.org/politics/33057.html

The Battle for Khimki Forest Is Coming Alive Again if Renewed Administrative Pressure on Their Leaders Is Any Gauge, Say Activists

By Tom Balmforth Russia Profile 03/01/2011

As ecological activist leaders claim that Russian authorities are threatening to take away their children, environmentalists on Tuesday stepped up their opposition to construction of a highway through prize woodland outside Moscow, with a public protest in the capital. Around forty activists of the “Khimki Forest Defenders” movement gathered at Chistiye Prudy before walking to Vinci, the French construction company currently contracted to build the controversial highway from Moscow to St. Petersburg. The Vinci offices, however, have moved place.

Many thought the grassroots movement to stop the felling of Khimki Forest north-west of Moscow was falling from the heights of media attention that it reached last year.

Back in July 2010, President Dmitry Medvedev’s decision to impose a moratorium on the road’s construction for an investigation was seen as a rare victory for Russian civil society, so often seen as weak. When journalist Oleg Kashin, who covered the conflict for Kommersant daily, was brutally beaten in November, the movement won widespread coverage in the media.

That was until December, when Medvedev unceremoniously gave the project the go-ahead.

But the activists pledged to continue their struggle. “The Khimki Forest is definitely not lost and we will continue to fight for it. What Medvedev said about the construction recommencing – for   the majority of those here it is illegal. The project is completely illegal,” said Yaroslav Nikitenko, deputy head of the Khimki Forest Defenders.

And the latest bout of administrative pressure being levied on the Khimki activists is testament to the success of their continued opposition to the highway, the activists claim.

On February 21, Chirikova thought nothing more of it when she did not answer the door to her apartment. Later a neighbor came to her and explained that the local Child Welfare Services had called on them in connection with a complaint that Chirikova was being a bad mother to her children, four and nine.

Outraged, the fiery ex Moscow businesswoman and mother of two, called the Child Welfare Services and filmed the phone call in a video now widely circulating on Russia’s blogosphere since it was posted on the movement’s Web site.

The Child Welfare Services told Chirikova, 33, that they are obliged to follow up the complaint with an inspection of Chirikova’s apartment in order to submit a report to the police. In a tweeted message on Saturday, Chirikova said the police rang at their apartment door in connection with the child abuse claims, although her husband refused to let them in.

“Everything used to be completely normal. Now there is the woe that the police are trying to take Yevgenia Chirikova’s children away from her,” said Nikitenko.

“We have realized that we are being effective in our protest now that opposition to us has begun again,” Chirikova said at the rally at Chistiye Prudy. “On February 1, they broke up our rally by planting a fake bomb at it. And then ten days later Chernysheva was detained along with her children allegedly for doing this,” said Chirikova.

On February 10, the editor of the activist pamphlet “Khimki Pravda is Alive,” Alla Chernysheva, was detained along with her children after she was accused of planting an imitation bomb at a rally that she helped organize. Her children were held for four and half hours. Chernysheva told Russia Profile that she was denied access to a phone in order to call her relatives to pick up her children. She was also asked to sign a confession, she said.

The activists say they are trying to make as much noise in their opposition as possible, writing letters to a raft of non-governmental organizations, now including those which deal with child rights. Russia's Child Ombudsman Pavel Astakhov on Friday condemned the pressure on her through the child welfare services as "foul, illegal and unacceptable," Gazeta.Ru reports. They also wrote letters to European Commission President Jose

Manuel Barroso timed to coincide with his meeting with Premier Vladimir Putin last Thursday.

In their latest strategy, the activists are trying to put pressure directly on Vinci, the French construction company contracted to build the road. They are appealing to Vinci’s president, Xavier Huillard, in an open letter published on the front page of their newspaper, “The Khimkinskaya Pravda is Alive,” which carries the headline “Vinci, Clear Off!” (Vinci, Vyidi Von!” Since Thursday they tried to distribute 15,000 copies in time for the protest. They had planned to submit an appeal letter to Vinci publically, although when they arrived at Vinci’s old offices this afternoon, it turned out that they have moved, Nikitenko said.

“Clearly, Vinci are not up to speed with this project. If they really understood what is going on, then they would have left ages ago and stopped taking part in this corrupt project,” said Chirikova.

Members of the opposition from the Just Russia and Liberal Democratic Party of Russia (LDPR) parties tried to score political points by attending the rally. Dmitry Gudkov of Just Russia called on the protestors not to give up their fight, arguing that it inspired civil society across the country.

“There is something called the Khimki Forest effect,” Gudkov told the protestors. “I know a lot of rights workers in the regions who after the Russian president halted the project were overjoyed. They said: ‘look our bureaucrats are actually thinking instead of carving up our money and our woodland between them.” He called on them to keep up their opposition, which has been an example to other nascent grassroots movements across the country.

The last stand for Siberian tigers?http://themoscownews.com/russia/20110302/188459952.html?referfrommn

by Alina Lobzina at 02/03/2011 10:56

The endangered Amur tiger is down to barely a dozen, according to alarming new research.

But the headline grabbing figure that the big cat’s effective population is just 15 is less of a threat than loss of habitat, environmentalists say.

There are about 500 Amur tigers living in the wild – but genetic researchers have found that they are descended from just 15 animals.

And that, they claim, raises the spectre of genetic disorders and other illnesses in the population.

“The worryingly low effective population size challenges the optimism for the recovery of the huge Siberian cat,” the researchers from Russia, Germany and Spain wrote in the paper published in the magazine Mammalian Biology.

Russia has invested heavily in protecting its tiger population, with Vladimir Putin personally endorsing the campaign at an international forum in St. Petersburg last year.

 

Overstated

The research, and its gloomy conclusion, may not take into account the different effects of genetic diversity on different species, ecologists say.

“For example cats are less sensitive to it than dogs,” Vladimir Krever, biological diversity programme co-ordinator at WWF’s Moscow office, told the Moscow News.

And he pointed to the successful reintroduction of European bison into the wild to prove that the genetic pool might not be the main criteria for saving threatened creatures.

Since 1951 the European bison has returned to the wild, despite the fact that in the early 20th century there were fewer than 50 surviving animals, all living in captivity.

 

Tigers need trees

Today’s tigers are threatened by illegal woodcutting just as much as their ancestors were devastated by poaching.

“Currently the most burning issue is conservation of the habitat area,” Vladimir Krever said.

Poachers haven’t disappeared today, but luckily they don’t make any serious impact on the number of feline predators, Krever said, while stripping away their natural habitat clearly does.

Preserving the forests would help maintain stocks of hoofed mammals – tigers’ natural prey – and ensure that the big cats have enough to eat.

“And if we are aiming to increase their number further, it’s definitely forests restoration to start with,” Krever concluded.

National Economic Trends

Ruble Spurs Best BRIC Market for Bond Buyers: Russia Credit

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

Ruble bonds are giving dollar-based investors the biggest gains among countries including Brazil, India and China as rising oil prices lifted confidence in Russia and extended the currency’s winning streak to three months.

Last Updated: March 2, 2011 01:36 EST

UPDATE 1-Rouble sets fresh peaks after Russia widens corridorhttp://www.reuters.com/article/2011/03/02/russia-rouble-idUSLDE72109F20110302

2:59am EST

* Adds 0.5 pct to 9-mth high of 33.47 vs basket

* Hits strongest in over 2 yrs vs dollar at 28.58

* Analysts see further gains after cbank corridor widening

(Adds quotes, details, background)

MOSCOW, March 2 (Reuters) - The rouble surged to fresh peaks on Wednesday after Russia widened its trading band to deter speculators and allow more room for currency appreciation that will help it battle inflation. The rouble firmed 17 kopecks or 0.5 percent in the first minutes of trade to hit a 9-month peak of 33.47 against the euro-dollar basket, RUS=MCX according to Reuters data. It also reached its strongest level against the dollar since late 2008.

The central bank announced the widening of the floating band by 0.5 rouble on either side -- to 32.45-37.45 roubles against the basket -- after the market closed on Tuesday, but it said it had already been running that range during the day's session. [ID:nLDE72026E]

The bank's first deputy chairman Alexei Ulyukayev said that the band widening should help battle Russia's surging inflation while increasing risks for speculators, and added short-term risks point to further currency appreciation.

The bank on Monday raised all of its interest rates -- raising the premium investors get for holding roubles and adding to the case for more gains after a surge in oil prices.

"A wider, stronger corridor, rouble-bullish policymaker rhetoric and high oil prices make continued rouble appreciation possible," analysts at JP Morgan said in a note, forecasting that the rouble would firm to 33.00 against the basket by mid-year.

Versus the dollar, the rouble added 10 kopecks to 28.58, its strongest since December 2008 RUBUTSTN=MCX. Against the euro it added 27 kopecks or 0.7 percent to 39.40 EURRUBTN=MCX.

Goldman Sachs and HSBC turned more bullish on the rouble after the central bank's announcement. With Russia's move on the rouble underlying its concerns about surging inflation, Goldman also now sees scope for more rises in interest rates. Oil prices -- a key source of revenues for Russia and a major driver of the rouble's strong gains in recent months -- remained supportive, with Brent near 2-1/2 year highs. [O/R]

Russia produced 10.23 million barrels of oil a day in February, retaining its top status globally and closing in on record volumes, data showed on Wednesday. [ID:nMSC000162]

But some dealers said further rouble gains could be preceded by a correction, given the currency's recent strength and a 'buy the rumour, sell the fact' stance among some investors regarding the central bank's announcement. (Reporting by Toni Vorobyova; editing by Patrick Graham)

Rouble extends gains to 26-mth highs vs dollarhttp://www.reuters.com/article/2011/03/02/russia-rouble-dollar-idUSLDE72109H20110302

2:33am EST

MOSCOW, March 2 (Reuters) - The rouble hit its strongest versus the dollar since late 2008 on Wednesday, extending gains after Russia widened its trading band to deter speculators while allowing more currency appreciation to help battle inflation. The rouble firmed to 10 kopecks or 0.35 percent against the dollar by 0730 GMT to hit its strongest level since December 2008, at 28.58 RUBUTSTN=MCX according to Reuters data. (Writing by Toni Vorobyova, Editing by John Bowker)

Russia's cbank widens floating corridor for bi-currency basket to 5 rblshttp://finchannel.com/news_flash/Banks/82091_Russia%27s_cbank_widens_floating_corridor_for_bi-currency_basket_to_5_rbls/

02/03/2011 01:20 (00:54 minutes ago) The FINANCIAL -- MOSCOW . Russia's central bank widened the floating corridor for its bi-currency basket, comprising $0.55 and 0.45 euros, to 5 roubles from 4 roubles on March 1, Central Bank First Deputy Chairman Alexei Ulyukayev said on March 2, according to RIA Novosti.

"The central bank made the changes as part of activities aimed at a gradual transition to an inflation targeting regime and the free float of the ruble... A higher potential currency rate flexibility achieved with the help of the changes will contribute to improving efficiency of the Bank of Russia's interest rate policy to providing price stability," Ulyukayev told a news conference.

The new floating corridor for the bi-currency basket is between 32.45 and 37.45 rubles.

Ulyukayev also said that the central bank had cut the maximum currency intervention volume within the floating corridor to $600 million from $650 million.

In February, the central bank bought $4.5 billion from the domestic currency market, Ulyukayev said.

He also said that the ruble was more likely to strengthen in the short-term.

The regulator does not rule out a capital outflow from Russia in February.

03/02 11:37   Customs Union Commission zeros out grain import duty to June 30http://www.interfax.com/

Business, Energy or Environmental regulations or discussions

March 02, 2011 11:47

Russia railways boost cargo handling by 7.9% in Jan-Feb, up 5.2% in Feb – Yakuninhttp://www.interfax.com/newsinf.asp?id=225915

MOSCOW. Mar 2 (Interfax) - Russia's railway system increased cargo handling in January-February 2011 by 7.9% year-on-year, the president of OJSC Russia Railways (RTS: RZHD) (RZD), Vladimir Yakunin, told journalists in Moscow on Wednesday.

"We are still lagging behind [the pre-crisis result for January-February]. In comparison with last year we saw growth of 7.9%," he said.

Cargo handling increased by 5.2% in February, Yakunin said.

Ih

United Co. Rusal (486 HK): Environmental prosecutors in Ukraine are investigating a red dust cloud from a Rusal-owned alumina refinery, Russia’s state-run Channel One television reported yesterday. Rusal, the world’s largest aluminum maker, gained 0.3 percent to HK$13.14 in Hong Kong.

Last Updated: March 2, 2011 01:36 EST

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

VTB Group (VTBR RX): Standard & Poor’s said yesterday that it put VTB’s long-term ‘BBB’ rating on credit watch because of its acquisition of a stake in Bank of Moscow. Russia’s second- largest lender fell 3.2 percent to 9.79 kopeks.

Last Updated: March 2, 2011 01:36 EST

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

OAO Mosenergo (MSNG RX): The Moscow power generator controlled by OAO Gazprom is scheduled to release its earnings results for 2010. The company’s shares fell 0.8 percent to 3.0053 rubles.

Last Updated: March 2, 2011 01:36 EST

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

Sberbank May Buy Ryan’s UFG for $35 Million, RBC Daily Reports

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

OAO Sberbank, Russia’s largest lender, may buy investor Charles Ryan’s wealth manager United Financial Group for $35 million, RBC Daily reported, citing unidentified people familiar with the matter.

Last Updated: March 2, 2011 01:36 EST

Billionaire Abramovich May Rebuild Gorky Park, Vedomosti Says

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

Russian billionaire Roman Abramovich is interested in rebuilding Gorky Park in the center of Moscow, Vedomosti reported, citing deputy mayor Lyudmila Shvetsova.

Last Updated: March 2, 2011 01:36 EST

Rusal Says Ukraine Dust Cloud Poses No Environmental Threat (1)

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

A red dust cloud that covered two villages in southern Ukraine poses “no threat to the environmental situation” in the city of Nikolaev, United Company Rusal said today.

Last Updated: March 2, 2011 01:36 EST

Rusal Says Ukraine Red Dust Cloud Poses No Environmental Threat

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ale.nRJZBbJ8

A red dust cloud that covered two villages in southern Ukraine poses “no threat to the environmental situation” in the city of Nikolaev, United Company Rusal said today.

Last Updated: March 2, 2011 01:36 EST

London court rejects RusAl request for documents from Norilsk lawyershttp://en.rian.ru/business/20110302/162825462.html

11:53 02/03/2011

MOSCOW, March 2 (RIA Novosti) - The London High Court has rejected a claim filed by RusAl, one of the core shareholders of Russia's biggest nickel producer Norilsk Nickel, to access confidential documents on Norilsk's deals from the metal giant's lawyers, Debevoise & Plimpton LLP, Norilsk said late on Tuesday.

RusAl filed several suits in Britain and the U.S. in February to suspend Norilsk's $4.5 billion buyback program, claiming the program would distort the company's structure

The buyback program was launched on January 27 and was to be completed on February 10, but Norilsk has said that a ruling by a court in the Caribbean island of Nevis  blocked the program following a suit from RusAl. Corbiere Holdings Ltd, a Norilsk subsidiary, which is in charge of the buyback, has said it suspended actions to complete the decision.

"I am delighted to report that today the London High Court judge threw out this claim, describing the order sought by RusAl as "an abuse of the process of the court" and sanctioning RusAl's 'unreasonable' conduct with an indemnity costs order," Norilsk quoted its President Andrei Klishas in a statement

"The Norilsk Nickel management will not tolerate serial litigation or diversionary tactics to prevent it from continuing to look after the interests of all shareholders. Management remains committed to promoting the prosperity of the Norilsk business for the benefit of all of its shareholders," the statement said.

"We are extremely happy that Debevoise strongly resisted this illegitimate attempt by RusAl to get information from our own lawyers and stood firm to preserve the sanctity of the lawyer-client relationship. We will continue to resist these illegitimate attempts by RusAl to selfishly promote its own interests at the expense of other shareholders. We will not allow RusAl to damage the company in this way," Klishas added in a statement.

The court considered much of what RusAl alleged as speculation and stressed that Debevoise itself was a wholly innocent party.

"Neither Norilsk nor its subsidiaries was involved in this application in London. The judge rightly made clear that his findings have very limited relevance and application, that they apply only in the context of this unusual and unsuccessful discovery application and that his findings are strictly without prejudice to the positions of Norilsk or any other party," Norilsk also said.

RusAl, controlled by billionaire Oleg Deripaska, and Interros, an investment arm of another Russian billionaire Vladimir Potanin, have long been at odds over control of Norilsk Nickel. RusAl says the Norilsk board is dominated by officials linked with Interros after a June AGM, where RusAl lost one board seat, while Interros increased its representation.

In December, Norilsk sold American Depositary Shares equaling about 8% of its stock to Trafigura Beheer BV. RusAl said it was worried by the deal which it called non-transparent and filed a suit to the U.S. District Court for the District of Connecticut on February 10.

RusAl said in late February that the District Court compelled Trafigura AG to produce documents and testimony relating to its recent purchase of Norilsk Nickel securities and ordered the company to produce any other agreements or understandings with Norilsk Nickel or Interros.

The aluminum company reacted to Norilsk's statement late on Tuesday by saying RusAl could obtain the information about Norilsk deals in its other existing court cases.

"The English Court noted that it could well infer that there is an agreement or arrangement between Trafigura and Interros, so as that they form a group for the purposes of passing the 30% threshold which RusAl complains amounts to a breach of Russian law and gives rise to an obligation on those who form the group to make an offer to acquire the shares of the other shareholders of Norilsk," RusAl said in a statement.

RusAl considers this conclusion will strengthen the company's position in legal proceedings in the Nevis court, where RusAl is questioning Norilsk buyback program, the Norilsk deal with Trafigura and possible conspiracy between Norilsk subsidiaries Corbiere and Raleigh.

The London court told RusAl that the company's claims could be valid if Norilsk's goal to neutralize the negative effects of the shareholders' conflict on the company was achieved by assembling a block of shareholders through the buyback plan organized by parties who act together as a group.

"RusAl remains determined to vindicate its rights and expose all acts of corporate piracy which are in violation of recognized corporate governance norms and that prejudice shareholder interests," RusAl said in a statement.

March 02, 2011 10:30

NCSP shells out 2.531 bln rubles buying shares from holders against Primorsk Port dealhttp://www.interfax.com/newsinf.asp?id=225893

MOSCOW. March 2 (Interfax) - OJSC Novorossiysk Commercial Sea Port (NCSP) (RTS: NMTP) has spent 2.531 billion rubles buying up shares from shareholders not in favor of the port's purchase of Primorsk Trade Port LLC, the company reported.

NCSP bought back 516,686,496 ordinary shares, or roughly 2.7% of overall issued shares.

Cf

Lisin Gets More of North-Western Shipping http://www.themoscowtimes.com/business/article/lisin-gets-more-of-north-western-shipping/431861.html

02 March 2011Combined Reports

Passenger Port, which is part of Vladimir Lisin's Netherlands-based Universal Cargo Logistics Holding, has acquired 25.5 percent of the shares of North-Western Shipping Company for 934 million rubles ($32.3 million) at auction.

The Federal Property Management Agency held an open auction Tuesday for the sale of the stake in North-Western Shipping. The starting price for the state packet was 924 million rubles.

The auction was conducted in increments of 10 million rubles, and was over after the first round. Three companies took part in the auction, two of which represented the interests of Universal Cargo.

Prior to this auction, Universal Cargo owned 62.42 percent of the shipping company through the offshore Havensight Shipping Cyprus. The remaining shares were distributed between minority shareholders. With the new purchase, the holding has consolidated an 87.92 percent stake in North-Western Shipping Company.

"We were uncomfortable with having a passive partner. But now nothing hinders stepping up the asset's development. We believe that the shares in the shipping company have been significantly revalued but, at the same time, we were unable to acquire them," Rishat Balutdinov, a spokesman for the buyer, told journalists.

He said the shipping company plans to order 100 new vessels in the near future to upgrade its fleet.

North-Western Shipping is a major transportation firm in Russia's waterway transport system. The company has six daughter companies, including its shipping company North-West Fleet, the Neva Shipbuilding and Ship Repairing Company, the Voznesensky Repair Yard and also the Volgo-Baltik Logistics Company.

Universal Cargo now consists of four divisions: cargo vessels, passenger vessels, shipbuilding and stevedoring.

(Vedomosti, Interfax)

Palladium Rising 15% as Russian Shipments Drop: Freight Markets http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=agdRbAYz9bi8

By Nicholas Larkin

March 2 (Bloomberg) -- Russia, the world’s biggest palladium producer, is shipping the smallest amount of metal to Switzerland in 15 years, a sign of declining state stockpiles that may drive prices as much as 15 percent higher by December.

Cargoes to Switzerland, one of Europe’s two main hubs for storing and trading precious metals, fell 12 percent to about 500,000 ounces last year and compare with the two-decade average of 1.3 million ounces, Swiss customs data show. Fewer shipments of the metal used in almost every catalytic converter may mean shortages. The five analysts ranked by Bloomberg as the most accurate over the past two years forecast prices as high as $940 an ounce in 2011, based on the median of their estimates.

While Russian stockpiles are a state secret, Johnson Matthey Plc, the London-based trader, says they were the fourth- largest source of supply in 2010. OAO GMK Norilsk Nickel, the biggest producer, said in December it expects “insignificant” amounts from reserves and Standard Bank Group Ltd. forecasts stocks will be depleted as early as this year.

“The palladium market, excluding any Russian stockpiles coming in, is going into an ever-increasing deficit,” said David Davis, a mining investment analyst at Standard Bank’s SBG Securities (Pty) Ltd. in Sandton, near Johannesburg. “It’ll put upward pressure on the price.”

The metal traded at $817.25 at about 7 p.m. yesterday in London. Prices hit a record $1,125 in 2001 when shipments were disrupted.

Mine Production

Mine output will fall 5.4 percent to 6.8 million ounces and demand from carmakers will climb 6.7 percent to about 5.5 million ounces in 2011, Barclays Capital estimates. Demand rose 15 percent last year to the highest in a decade while supply, excluding recycling, was steady, and without Russian reserve sales there would have been a shortage, Johnson Matthey said.

Palladium accounts for 90 percent to 95 percent of precious metals used in gasoline catalytic converters and about 25 percent in diesel devices, according to Johnson Matthey, which has supplied one in three of the world’s autocatalysts.

Catalytic converters each use about 4 grams (0.13 troy ounces) of precious metals, according to Mark Bedford, the director of precious-metals marketing at Johnson Matthey. Four grams of palladium cost about $105 and $237 for platinum.

Palladium jumped more than fourfold since the end of 2008, reaching a 10-year high of $862.25 on Feb. 21. Platinum doubled in that period. The Standard & Poor’s GSCI Total Return Index of 24 commodities rose 34 percent, the MSCI World Index of equities climbed 46 percent and Treasuries returned 1.9 percent, a Bank of America Merrill Lynch index shows.

Energy Prices

Prices have declined on concern that protests across North Africa and the Middle East will drive energy prices higher and weaken economic growth.

Russia mined 2.7 million ounces of palladium in 2010, worth $1.4 billion at last year’s average price, Johnson Matthey data show. South Africa produced 2.49 million ounces, for $1.3 billion, and mine output totaled about $3.2 billion. Recyclers recovered 1.32 million ounces from spent autocatalysts.

Sales of Russian stockpiles dropped to 1.01 million ounces in 2010 from as much as 1.49 million in 2007, the data show. Inventories were built up from excess output in the 1970s and 1980s and may have declined to less than 1 million ounces last year, SBG’s Davis said.

Customs Data

“We don’t know how many years it took to build them up and how they big they were, but at some time they must empty out,” said Thorsten Proettel, an analyst at Landesbank Baden- Wurttemberg in Stuttgart, Germany, and one of the members in the Bloomberg survey. “At that time it might be a problem for the market.”

Swiss customs data includes ingots, powder and half- processed material, mostly brought in by air freight. Bars are stacked on pallets, according to Afshin Nabavi, a senior vice

president in Geneva at bullion refiner MKS Finance SA, which trades the metal. It is transported in plastic pots when in powder form, said Johnson Matthey’s Bedford.

Any rise in car sales and palladium may be curbed by energy prices after oil in New York jumped 27 percent from a year ago. Protests across North Africa and the Middle East have disrupted supply, sending gasoline prices to a record in the U.K., according to the Automobile Association, the nation’s largest motoring organization.

“Everybody’s suddenly nervous about high oil prices reducing the amount of distance that people are driving and pushing back the likelihood of people buying cars, and therefore it could impact on palladium consumption in the short term,” said David Wilson, an analyst at Societe Generale SA in London and another participant in the Bloomberg survey.

Auto Sales

Investor demand may overcome a drop related to auto sales. Palladium held in exchange-traded products reached a record 73.08 metric tons on Feb. 28, about 26 percent of annual gross demand, according to data compiled by Bloomberg.

Norilsk Nickel, based in Moscow, will report earnings per share rose 22 percent to $33.09 this year, based on the mean of seven analysts’ estimates compiled by Bloomberg.

Palladium slumped 87 percent over two years after reaching a record in 2001 as manufacturers switched to using more platinum. Ford Motor Co., the second-largest U.S. carmaker, wrote down the value of its precious metals by $1 billion that year, contributing to the Dearborn, Michigan-based company’s first annual loss since 1992.

An ounce of platinum bought 2.16 ounces of palladium on Feb. 18. The ratio was last that low in 2002, after which platinum climbed 29 percent and palladium fell 31 percent in the following year. While sustained prices above $1,000 may spur autocatalyst makers to use more platinum, the process “won’t happen overnight,” SBG’s Davis said.

Vehicle Sales

Asia is leading the increase in auto demand, with personal vehicle sales likely to increase 7.3 percent to 24 million this year, according to Oxford, England-based J.D. Power Automotive Forecasting.

China’s economy will grow 9.5 percent this year, according to the median in a Bloomberg survey of eight economists. While that’s down from 10.3 percent in 2010, it’s almost three times predicted growth in the U.S. and almost sixfold the forecast for the euro region.

The U.S. in 1975 introduced legislation leading to vehicles being fitted with catalysts to cut pollution, and about 95 percent of all new vehicles sold globally are fitted with the

devices, according to Johnson Matthey. Ceramic or metal is formed into a honeycomb and coated with chemicals and metals, and is installed in the exhaust line in vehicles.

Even after last week’s drop, “palladium is likely to be the star performer of precious metals again in 2011,” said Anne-Laure Tremblay, a London-based analyst at BNP Paribas SA and another participant in the Bloomberg survey.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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

Last Updated: March 1, 2011 19:00 EST

Fiat to Build Russia Plant to Meet Sales Target, Government Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ais4h8zaQV2k

By Ekaterina Shatalova and Tommaso Ebhardt

March 2 (Bloomberg) -- Fiat SpA plans to build its own plant in Russia after ending talks last month on a 2.3 billion- euro ($3.2 billion) joint venture with OAO Sollers, A Russian Economy Ministry official said.

The Turin, Italy-based company is considering various regions for the plant, including so-called special economic zones, Dmitry Levchenkov, a Russian Economy Ministry department head, said in a telephone interview late yesterday. Investment in such projects is usually about 1 billion euros, he said.

Fiat submitted a plan to the Russian government to build as many as 300,000 cars a year in the country, the carmaker said last week. Fiat is still in talks with possible partners, Chief Executive Officer Sergio Marchionne said yesterday at the Geneva Motor Show. A Fiat spokesman declined to comment further.

Fiat, which also runs Auburn Hills, Michigan-based Chrysler Group LLC, is targeting fast-growing economies to counter losses in Europe, its biggest market. Ford Motor Co., Volkswagen AG and General Motors Co. have signed deals with Russian partners in recent weeks to produce cars in the country.

The carmakers sealed agreements to meet a Feb. 28 deadline set by the Russian government to signal their intentions for increasing production to at least 300,000 vehicles in order to receive tax breaks. The detailed planning is to follow in the coming months.

“Virtually all major producers are interested in the new mechanism and as of today we have already signed six preliminary agreements,” Economy Minister Elvira Nabiullina said yesterday following a government meeting. “We have signed memoranda of understanding with them and they should present business plans to us by June 1.”

Expanding Market

Russia may become the world’s sixth-largest auto market in 2020, with 4 million deliveries a year, the Boston Consulting Group said in a report earlier this month. The nation is now the world’s 10th-largest car market, with 1.9 million annual sales, according to the Boston-based consulting firm.

Magna International Inc., which does contract assembly for automakers, has also signed a letter of intent to produce more than 300,000 cars in Russia and is in talks to assemble cars with GAZ Group in Nizhny Novgorod and with Avtotor Group in Kaliningrad, Levchenko said. Daniel Witzani, a Magna spokesman, didn’t immediately return a call to his mobile phone seeking comment.

GM’s Opel will probably participate in a capacity expansion at GM’s St. Petersburg plant, while at the same time looking for a local partner to produce vehicles, the division’s chief Nick Reilly said yesterday in Geneva.

To contact the reporters on this story: Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net; Tommaso Ebhardt in Milan at tebhardt@bloomberg.net.

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Last Updated: March 1, 2011 16:07 EST

First LADA cars sold in Venezuela http://english.ruvr.ru/2011/03/02/46820464.html

Mar 2, 2011 11:39 Moscow TimeOn Tuesday in Caracas Venezuelan Trade Minister Edme Betancourt handed over ignition keys and certificates to the first owners of Russian-made LADA cars, - Lada Priora, Lada Kalina and Lada Niva. “Today we hand over the first 450 Russian-made cars to Venezuelans”, she told the ITAR-TASS news agency correspondent in an interview. Betancourt said that Russian cars are sold at fair prices, with state-run banks giving buyers soft loans for purchasing cars, with a five-year payment period. The Venezuelan Minister voiced interest in launching the production of LADA cars in Venezuela.      

Walmart Fails Where Others Succeedhttp://russiaprofile.org/business/33058.html

As the Latest Large Retailer Leaves Russia, Some in the Industry Believe Existing Players Have the Market Sewn UpBy Rosemary Griffin Russia Profile 03/01/2011

Walmart closed its representative office in Moscow yesterday after failing to crack the Russian market. The decision to pull out came after Walmart missed out on deals to acquire two Russian retailers, Kopeika and Lenta, last year. But why did the world’s largest retailer struggle to make an impact in Russia, and have grocers looking to enter the Russian market today already missed the boat?

"I think Walmart overslept. With their decision-making processes and management from the United States (an eight hour time difference), they didn't have a chance,” a source close to Walmart's attempts to enter the Russian market told Russia Profile.

Kopeika was finally bought in December of 2010 by Russia’s largest grocery retailer X5, in a deal worth 51.5 billion rubles ($1.65 billion). A successful take-over of either Kopeika or Lenta would have given Walmart an entry point into the Russian market, with Kopeika seen as the favorite. Walmart’s decision to leave Russia came just a week after X5, of which Mikhail Fridman is a significant stakeholder and owner of Pyaterochka, Perekrestok and Karusel, secured the deal.

Speaking on December 13, 2010 – the day Walmart announced its plans to exit Russia – the CEO of Walmart International Doug McMillon cast the group’s decision to exit the Russian market as a matter of strategy. "Since we have decided to enter the market through acquisition, not green-field development, and since there is no clear acquisition partner in the near term, there is not a business reason to continue our Moscow representative office,” McMillon said. The CEO did not rule out further attempts to enter the Russian market in the future, however. "The Russian market is a compelling retail opportunity and we believe that Russian consumers could benefit from Walmart's value proposition. We will continue to pursue market entry opportunities."

Galina Maliborskaya, the director of the Retail Department at the Moscow office of commercial real estate firm Colliers International, said it is hard to say why Walmart pulled out without a full understanding of the company’s global strategy, but she did offer some theories. “Perhaps one reason could have been land prices,” Maliborskaya said. “Land here is very expensive, and maybe they counted on it getting significantly cheaper during the crisis. But the crisis was relatively short and during that time prices did not become very low.” Maliborskaya also pointed to the difficulties of finding a suitable acquisition target. “Walmart has very specific branding and image. It needs certain features, such as plenty of parking, and not all chains that are already operating in Russia have a similar concept.”

For some in the industry, Walmart failed to strike while the iron was hot. There had been rumors circling that the American company was looking for a way to enter the Russian market since 2002, but the representative office only opened in April of 2008. "They just

weren't in a position to be competitive. Real, Auchan, OKEY, Globus and Metro had snapped everything up. What is more, they were probably already in Russia when it was still possible to be competitive, before the Germans and then the French entered the market," a source close to Walmart's attempts to enter the Russian market told Russia Profile. "In terms of smaller shops, Sedmoy Kontinent, Azbuka Vkusa and little stores like Kopieka, Spar and Perekrestok were well established. Walmart started looking at development too late."  

Strategy changes also failed to turn the company’s fortunes around. "At the beginning of 2009 Walmart launched a tender to design two prototype shops: one a medium-sized hypermarket, similar to a Real store, and the other a large format hypermarket, similar to a large Auchan," the source said. But a year later the company had changed its requirements. "In August 2010 there was another tender, to design a prototype for a much smaller development, something like a local neighborhood store."

Walmart is not the only major international retailer to pull out of Russia in recent years after failing to establish a viable business in the country. In October 2009, Carrefour announced it was pulling out after opening just one shop in Moscow and another in the Southern city of Krasnodar.  A Carrefour statement released to coincide with the pull-out reads similar to Walmart’s complaints: "Carrefour has decided to sell its activities in Russia and pull out of the market, given the absence of sufficient organic-growth prospects and acquisition opportunities in the short-and medium-term that would have allowed Carrefour to attain a position of leadership," the statement read.

Retreating when a suitable acquisition target is not available could be a wise strategy for discount retailers looking to enter Russia, however. In regard to the acquisition versus starting from scratch debate, Maliborskaya said that in the discount sector, buying an existing chain is the safest bet. “It’s the best way to get a large sales area quickly and sell a big enough volume of stock to keep margins down – essential in discount retail.”

That’s not to say that today’s lack of suitable acquisition targets will keep the likes of Carrefour and Walmart out of Russia for long, something about which Maliborskaya remains optimistic.

“The Russian market is very big, there are a lot of people here and the sector in which Walmart operates – discount retail – is severely underrepresented. There are only two international hypermarket chains, Auchan and Real, that are operating in this sector, so the market is certainly not saturated".

Vimpelcom clears court hurdle on way to Wind dealhttp://af.reuters.com/article/investingNews/idAFJOE72103W20110302

Wed Mar 2, 2011 6:23am GMT

By Victoria Howley

LONDON (Reuters) - Vimpelcom's Russian owners moved closer to building a leading emerging markets telecoms group when a London court thwarted an attempt by key shareholder Telenor to derail a $6 billion purchase.

The court on Tuesday denied Telenor an injunction preventing a shareholder vote to approve Vimpelcom's deal to buy Cairo-listed Orascom Telecom and Italy's Wind from Egyptian tycoon Naguib Sawiris.

Telenor fears the move will dilute its 36 percent stake in Russia's No. 2 mobile phone group. But the deal is backed by the other main owner, Mikhail Fridman's Alfa Group, and the company's board.

The $6 billion-plus cash-and-shares transaction, if approved by a special general meeting on March 17, would see Telenor's stake fall to 25 percent and Sawiris gain 30.6 percent.

"It looks like the Wind transaction will be completed," Tore Toenseth, telecoms analyst at Argo Securities, told Reuters.

"This will present a lot of strategic problems for Telenor. They are losing influence in Vimpelcom. It means they will potentially not consider Vimpelcom a strategic asset any longer... unless they win (a separate) arbitration," he added.

The court refused to accept Telenor's request to have pre-emptive shares issued to it in escrow, pending the outcome of a separate arbitration initiated by Telenor that was to rule on whether it had pre-emptive rights to buy new shares.

Analysts said the verdict was a blow to Telenor even though it gave the Norwegian operator assurances that it would get its pre-emptive rights back if it won the arbitration case and that Telenor's voting stock in Vimpelcom would not fall below a 25 percent threshold until arbitration ends.

Telenor said the guarantees given by the other parties in court pledging to its pre-emptive rights should Telenor win arbitration were "the next best thing" to an injunction.

"We are in a much more secure position now than we were before the court hearing," Telenor spokesman Dag Melgaard said, adding that Telenor will now focus its attention on rallying independent shareholders against the Sawiris deal.

KEY DECISION

Telenor initially backed the deal, but later said it did not make financial or strategic sense.

"Telenor remains confident that the arbitration tribunal will recognize Telenor's right to receive the pre-emptive right shares if Vimpelcom's proposed acquisition of Wind Telecom is completed," said Telenor's Melgaard.

Its shares fell 1.18 percent by 1647 GMT.

Analysts said it will be tough for Telenor to persuade 70 percent of Vimpelcom shareholders to join it in voting against the deal -- something one banker called "an uphill struggle".

"We strongly believe that the shareholder meeting will support the deal," Moscow-based analyst at VTB Capital Viktor Klimovich said, a view echoed by Renaissance Capital analyst Ivan Kim who said he thought the deal was likely to go ahead.

"The best thing for minority shareholders now is for the deal to go through as quickly as possible and the combined group get a listing on a major index overseas," Kim said.

Alfa Group's telecoms arm Altimo welcomed the court ruling.

"We will vote our shares in favour of the proposed deal at the EGM and urge all shareholders to do the same... We will continue to work hard to achieve a complete dismissal of the arbitration proceedings initiated by Telenor as quickly and efficiently as possible," Vice-President Yevgeny Dumalkin said.

Yota, a new kind of Russian companyhttp://www.globalpost.com/dispatch/news/business-tech/innovation/110301/yota-internet-russia-company

Youthful internet provider expands by focusing on Russia's friends.Miriam ElderMarch 1, 2011 15:02

MOSCOW, Russia — Yegor Ivanov, vice president of business development at Yota, remembers walking into the offices of South Korean electronics giant Samsung in 2007. “We didn’t even have business cards,” he said. “They didn’t see why they should talk to us. They thought, ‘Who are these people from Russia?’”

Four years later, Yota is leagues closer to nipping at the heels of Russia’s established telecoms giants, offering some of the most innovative products in the world of high-speed mobile broadband and internet services.

There is Yota Music, Russia’s answer to Pandora internet radio. In April, the company is set to launch Yota Play, modeled on Netflix movie streaming. It’s all built upon the company’s main product, 4G wireless broadband, for which it currently counts 750,000 customers.

“We all live with these things,” said Ivanov, who at 30 exemplifies the overwhelming youth of the company. Speaking of himself and his colleagues, he said: “We all have multiple telephones, an iPad, computers — the latest of everything. We know how the service should be and the right way to do it.”

Yota launched in June 2009, at first in Moscow and St. Petersburg before spreading to three other cities around Russia. Within five months, it had broken even. Last year, it reported revenue of $125 million.

The company immediately set itself apart, both inside Russia and globally, by its use of mobile WiMAX technology, which provides high-speed internet, including through the computer dongles that have become increasingly popular in recent years. The company poured $500 million into acquiring WiMAX technology, particularly from Samsung, which builds the base stations planted around the cities where the service is available. Soon it became one of the top users of the technology and announced plans to offer it in 15 more cities around Russia.

And just like that, plans changed. As WiMAX lost ground worldwide to Long-Term Evolution technology, better known as LTE, Yota decided it had to be flexible. The firm announced last May it would switch its technology base completely. “Following the global trend, we are seeking to give our clients the best solutions,” Yota said in a statement at the time.

In a country where big business has had a tough time shaking off the Soviet legacy of instituting years-long investment plans, the speed of Yota’s growth and change has raised many eyebrows.

Within two months, Yota had poured $20 million into developing LTE technology for its 4G coverage in Kazan, Russia’s third largest city. It may be moving too quickly for some. The technology is in place, but Russia lacks the regulation to cover it so the project has been frozen pending regulatory approval.

“Now, even though we’re a company of 1,000 employees, with a large network and subscriber base, we still have the dynamic and drive that we had at the very beginning,” Ivanov said. “We have a pro-Western mentality, versus the bureaucratic typical Soviet background.”

That can even be seen in its marketing. Its logo, a stick figure turned on its head, is simple and clean. Rather than splash out millions on additional advertising, in December Yota hosted the Yota Space festival in St. Petersburg, garnering global coverage for the exhibit of digital art and opening night concert, featuring indie favorite Hot Chip.

Yet despite its innovative feel and hipster approach, the company has not been immune to criticism. Last month, it raised its rates, turning off some users. Ivanov said the move was needed to stem a user base that was growing too quickly and to provide quality service to those who remained.

Its expansion strategy has seen it focus on countries with which Russia has good ties. After launching in Russia, it moved on to Belarus, the country run by hardline leader Alexander Lukashenko. Next, it went to Nicaragua, one of just a handful of nations that has recognized the independence of South Ossetia, the separatist Georgian republic that Tblisi and Moscow fought a bloody war over in August 2008. It has also recently launched in Peru. The financial crisis disrupted plans to clinch a deal with Venezuela.

“We understood it would be rather difficult to go to the U.S. or Europe,” Ivanov said, citing prejudice against Russian firms and protectionism on the part of big network operators.

Its global expansion has been aided by Russian Technologies, the unwieldy industrial behemoth that is fully owned by the Russian government. It holds a blocking stake of 25 percent plus one share in Yota. The rest belongs to Telconet Capital, a private investment fund. Ivanov said there were no plans for an IPO yet, but that would eventually be on the cards.

Russia Repels Retailers as Ikea Halt Curtails Medvedev BRIC Goal http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aJU8zasZ343E

By Henry Meyer

March 2 (Bloomberg) -- Ikea, the world’s biggest home- furnishings retailer, is just the type of investor Russia needs -- and isn’t getting -- to overcome the lowest foreign investment rate among leading emerging-market economies.

The Swedish company says it won’t build more stores outside the Moscow region until local officials stop withholding permission for two outlets in the central cities of Samara and Ufa. After investing $4 billion in Russia over 10 years, Ikea placed a freeze on expansion in June 2009.

The reason the stores aren’t opening is that Ikea is refusing to pay bribes to safety inspectors, said Kirill Kabanov, head of the non-governmental National Anti-Corruption Committee in Moscow.

“We have a zero tolerance on corruption and we have a very clear policy, and then things must take the time they take,” Ikea Russia Managing Director Per Wendschlag said in an interview. He said he had no specific complaint on the delay in permits in the two cities.

At stake is Russian President Dmitry Medvedev’s goal, expressed in a Jan. 26 interview with Bloomberg Television, to match the economic growth rates of other BRIC nations.

With barely more than one-tenth the population of China and India, Russia needs to attract non-energy investors to grow and diversify. Corruption has “penetrated all branches of power,” Medvedev said in the interview.

The president’s credibility as a graft-busting former lawyer working to improve the business environment was tarnished in December when a Moscow court handed a new jail sentence to Mikhail Khodorkovsky, the former Yukos Oil Co. billionaire, said James Beadle, a U.K.-based consultant for investors in Russia. Lack of progress risks harming Medvedev’s prospects a year ahead of presidential elections.

Sakhalin Permits

Foreign companies have repeatedly faced difficulties in Russia. Royal Dutch Shell Plc, Europe’s largest oil company, in 2006 ceded control to state-run OAO Gazprom of its biggest project in the country, the $22 billion Sakhalin-2 oil and gas development, amid threats by regulators to revoke the permits on environmental grounds.

Russian health officials last year warned Nestle SA, the world’s largest food company, that it was violating safety rules at its Russian plants. A spokesman confirmed the warning last month. It was a move to favor local rivals or extort money, according to the anti-corruption committee’s Kabanov.

He has been on the board of Transparency International’s Russia branch since 1995 and was an officer in the anti- corruption and anti-contraband units of the Federal Security Service, the KGB’s domestic successor, from 1994 to 1998.

Wal-Mart Stores Inc. and Carrefour SA, the world’s two biggest retailers, quit the Russian market in the past 16 months after saying they couldn’t repeat the success they had had in other countries. Both companies are expanding in China, India and Brazil. Spokesmen for both companies repeated that reason in interviews last month.

“Russia has the largest consumer market in Europe with a relatively low degree of penetration,” said Kingsmill Bond, chief strategist at Troika Dialog, in a Feb. 24 phone interview from London. “It’s a very attractive market, but companies encounter endemic corruption and that is impacting foreign investment.”

No New Fund

Vonnell Martinez, founder and chief executive officer of Vim Resources, a Miami-based investment firm, put a plan on hold in November to set up a $100-million equity fund in Russia because he decided he couldn’t risk investing other people’s money in the country.

“All the uncertainty and political threats that are constantly attacking you, it crushes investment,” he said. “If you grow too big, you’re speculating and then you put yourself under the whim of people who can destroy your business from one day to the next.”

Medvedev, who before his election in 2008 pledged to combat “legal nihilism” to win investment to help diversify Russia’s economy away from oil and gas, said in a speech to the World Economic Forum in January that “we haven’t yet achieved outstanding results” in the fight against corruption and for modernizing law enforcement.

‘Full of Determination’

Still, he said, “We are full of determination to act further,” and “I am confident that we will manage to combat corruption.”

Russia is the world’s most corrupt major economy, according to Transparency International’s 2010 Corruption Perceptions Index, issued in October. It holds the 154th spot of 178 countries surveyed, tied with Tajikistan and Kenya.

To be sure, Russia’s position as the world’s largest energy exporter yielded BP Plc’s Jan. 14 agreement to swap 5 percent of its shares for a 9.5 percent stake in OAO Rosneft, Russia’s biggest oil producer, and jointly explore new Arctic fields.

PepsiCo Inc.’s accord in December to buy a controlling stake in Wimm-Bill-Dann Dairy & Juice Co., one of Russia’s leading producers of juice and dairy products, for $3.8 billion is also a sign that companies want to tap into Russia’s fast- growing consumer market.

Rising Stocks

In addition, the benchmark Micex index has risen 30 percent in the past 12 months, while the comparable Chinese index is down 5.5 percent and India’s Sensex Index has risen 12.3 percent.

Ikea’s Wendschlag said that same-store sales in Russia are growing at more than 20 percent a year. The company, whose holding unit is based in Leiden, the Netherlands, currently has 12 stores in Russia and had planned to open the largest commercial center in Europe outside Moscow among other new outlets, said Wendschlag.

“We are one of the top-selling Ikea countries in the world,” he said. “The potential with 141 million people who are interested in consuming and furnishing their homes is big.”

At the same time, concern about the legal system is one reason Russia got less than a third of the investment fund inflows of China, slightly more than 40 percent that of Brazil and less than did India in the past three years, according to EPFR Global of Cambridge, Massachusetts, a research company that tracks $13 trillion of assets.

Falling FDI

Foreign direct investment in Russia was about $8 billion in the first nine months of 2010, compared with $16 billion in 2009, according to BofA Merrill Lynch Global Research.

Political risk and corporate governance issues mean it isn’t safe to invest long-term in Russian stocks, said Kaha Kiknavelidze, a managing partner at London-based Rioni Capital Partners LLP, who manages $60 million in emerging markets.

“Politics influences the corporate side, particularly in big sectors, so much that it’s very difficult to get comfortable on a company’s political stance in the long-term,” he said by phone. “We like to look at a 12-to-18 month horizon in Russia.”

Ikea’s founder, 84-year-old Swedish billionaire Ingvar Kamprad, has his own concerns. The company fired two executives in Russia in February 2010 for allowing a contractor to pay a bribe related to a store in St. Petersburg, the company said in a statement at the time.

Kamprad said in a statement in December that he had been “over-optimistic” about his company’s ability to navigate the Russian market. “It is shocking and sad that our organization got carried away.”

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net;

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

Last Updated: March 1, 2011 16:00 EST

Ikea Russia's Wendschlag Speaks http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aJU8zasZ343E

March 2 (Bloomberg) -- Ikea's Russia Managing Director Per Wendschlag talks with Bloomberg's Henry Meyer about the decision to suspend expansion outside Moscow until local officials stop withholding permission for two new outlets in the cities of Samara and Ufa in the central part of the country.

Aeroflot considers creating a handling JV with Sheremetyevo and Vienna airports

http://www.bne.eu/dispatch_text14320

VTB CapitalMarch 2, 2011

News: According to Kommersant, Aeroflot is considering creating a handling joint venture with Sheremetyevo and Vienna airports. It would be based at the company's core hub, Sheremetyevo, and service Aeroflot's aircraft as well as those from its Sky team alliance partners. Sheremetyevo's CEO estimates the JV's annual revenues at USD 30-60mn. Aeroflot's planes are currently serviced by own its handling subsidiary.

Our View: The Christmas collapse in Aeroflot's traffic clearly shows that there are serious problems in the company's own handling operations at Sheremetyevo. Given this, and the general idea of spinning off non-core businesses (such as Terminal-D), the creation of a JV looks logical.

However, we consider the chances of such a JV being created as low, since the government is considering inviting a foreign management company for Sheremetyevo airport as early as next year (after Terminal-D has been merged with other terminals). That is expected to bring global expertise and improve the quality of handling in the airport as a whole, thus removing the necessity to create an alternative handling company and reducing the economies of scale. Even if the JV were to be created, its impact on Aeroflot's financials would be marginal, while it is impossible to estimate what improvements there might be in operating efficiency. Therefore, we do not see any material impact for the stock.

Elena Sakhnova

Rosaviation liberalises regulation of charter flights http://www.bne.eu/dispatch_text14320

Renaissance CapitalMarch 2, 2011

Event: Today (2 March), RBC Daily reported that Rosaviation has withdrawn its previous directive that obliged airlines to obtain approval for charter flights from the designated carriers on their routes. The decision was driven by the cancellation of flights to Egypt. Now, airline companies can re-allocate their traffic from Egypt to other routes, without the need for permission from designated carriers. Rosaviation also announced a list of airlines that can operate charters on popular routes, including to Greece, Cyprus and Bulgaria.

Action: Negative for Aeroflot, in our view.

Rationale: The situation in Egypt and Tunisia adversely affected Russian airlines' passenger traffic in February, especially that of charter airlines. According to Domodedovo's director of marketing, Vladimir Kamynin, Egypt traffic fell 79.8% YoY, depressing total traffic 26% YoY. In the short term, charter liberalisation is aimed at the reallocation of charter flights following the reallocation of tourist traffic, and preventing significant ticket-price growth. In the longer term, however, the charter companies could depress prices and take traffic away from Aeroflot, in our view.

Ivan Kim

Activity in the Oil and Gas sector (including regulatory)

Russia Holds Oil Output Near Post-Soviet Record in February (1) http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a6.FOwZ86qMc

By Stephen Bierman

March 2 (Bloomberg) -- Russia, the world’s largest oil producer, kept crude output near a post-Soviet record in February, at 10.23 million barrels a day.

That was 0.2 percent higher than a month earlier and 1.5 percent higher than the same month last year, according to statistics from the Energy Ministry’s CDU-TEK data unit.

Russian crude exports advanced to 5.28 million barrels a day, rising 2 percent from the previous month and 1.1 percent from February of last year, according to the statistics.

Prime Minister Vladimir Putin pledged that Russia’s oil production will remain above 10 million barrels a day for at least a decade, after reaching a post-Soviet high of 10.27 million in October. Putin ordered the government to create tax incentives so that companies will invest in new projects.

Russia’s Soviet-era crude output peaked at 11.48 million barrels a day in 1987, according to BP Plc data.

Gains by OAO Gazprom, projects run under production sharing agreements with Royal Dutch Shell Plc, Exxon Mobil Corp. and Total SA, and smaller producers offset monthly declines by Russia’s two largest oil producers, OAO Rosneft and OAO Lukoil.

Lukoil’s production fell 0.6 percent from the previous month and 5.3 percent from a year earlier. The Moscow-based company said last year that its 2011 domestic oil output may fall this year.

State-controlled Rosneft pumped 0.5 percent less oil than in January, while boosting production 2.4 percent from February of last year. Rosneft’s figures do not include its Tomskneft venture with OAO Gazprom Neft.

Natural-gas output declined to 2.04 billion cubic meters a day in February, 0.7 percent lower than the previous month and 1 percent down from a year earlier, according to the statistics.

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

To contact the editors responsible for this story: Torrey Clark at tclark8@bloomberg.net; Will Kennedy at wkennedy3@bloomberg.net

Last Updated: March 2, 2011 03:53 EST

UPDATE 1-Russia Feb oil output up at 10.23 mbpd, near recordhttp://uk.reuters.com/article/2011/03/02/russia-energy-idUKLDE7210I420110302

9:15am GMT

* Government aims to keep output at 10 million bpd

* Well ahead of Saudi but has little to no spare capacity

* Gas output down slightly month-on-month and year-on-year

(Adds exports, ranking in global output)

MOSCOW, March 2 (Reuters) - Russia increased oil output in February, approaching record levels and retaining its status as the world's top producer, but leaving little spare capacity to respond to global supply shocks, data showed on Wednesday.

Russia produced 10.23 million barrels per day (bpd) of oil last month, up from 10.21 million bpd in January and just shy of October's daily record 10.26 million bpd, the Energy Ministry data showed.

Russia forecasts its output for the rest of the decade will average 10 million bpd or slightly more.

It exported 5.24 million bpd, the data, provided by Russia's Energy Ministry, showed.

At February's rate, Russia comfortably maintained its rank as the world's top crude producer with a margin of 1.6 million bpd over Saudi Arabia during the month, according to a Reuters survey. [ID:nLDE7202EF].

But unlike Saudi Arabia, Russia boasts little, if any, spare capacity to step into any gaps caused by political upheaval in the Middle East.

A senior Saudi oil official said on Monday the kingdom was pumping at 9 million bpd and still had 3.5 million bpd of spare capacity.

Russia faces significant costs in the coming years to squeeze more oil out of the ageing Soviet-era fields of Western Siberia and expand new projects, much of whose oil is destined for the fast-growing markets of Asia.

The marginal output that has helped the country pump at peak levels has largely been from smaller producers such as the fields of Sakhalin, operated by Russian and foreign oil companies under production-sharing agreements.

Gas output slipped slightly to 2.04 billion cubic meters per day, a decline of 10 million cubic metres per day from the previous month and 0.4 percent below its output level in February 2010. (Reporting by Gleb Gorodyankin; writing by Melissa Akin; editing by James Jukwey)

TNK-BP offers to buy BP stakehttp://www.upstreamonline.com/live/article246569.ece

TNK-BP has offered to buy a 5% stake in BP for £5 billion ($8.16 billion) in an attempt to resolve a dispute over BP's proposed deal with Russia’s Rosneft.

News wires  02 March 2011 03:42 GMT

BP's Russian joint venture would buy the BP stake and then swap it for a 10% stake in Russian state-controlled Rosneft, mirroring the original BP-Rosneft deal, the Times reported today.

However, under the new proposal to be discussed at a meeting on Friday, the Rosneft stake would be owned by TNK-BP, instead of BP, and BP would gain £5 billion in cash, the newspaper added.

BP and Rosneft struck a deal in January to jointly develop Arctic oil and gas, and they also signed a share swap agreement.

But Russia-connected shareholders of TNK-BP said the deal violated its shareholder agreement with BP and won an injunction in a London court to put it on hold.

Published: 02 March 2011 03:42 GMT  | Last updated: 02 March 2011 03:42 GMT

TNK-BP confirms eying BP-Rosneft Arctic projecthttp://af.reuters.com/article/energyOilNews/idAFLDE72020320110301

Tue Mar 1, 2011 3:22pm GMT

MOSCOW, March 1 (Reuters) - The management of Russia's TNK-BP (TNBP.MM) has told its board the company should try join co-owner BP's (BP.L) Arctic drilling deal with state oil company Rosneft (ROSN.MM), its chief financial officer said on Tuesday.

"In relation to Arctic opportunity it has been accurately reported that management at this point has proposed that the board consider participation in the Arctic opportunity," CFO

Jonathan Muir told a conference call, adding that the board was still considering the proposals.

TNK-BP, which produced 1.74 million barrels of oil equivalent per day and plans to boost output by 1.7 percent next year, expects to export 40 percent of crude output in 2011, Chief Operating Officer Bill Schrader said. (Reporting by Melissa Akin; editing by Andrey Ostroukh)

TNK-BP proposes taking BP's place in Rosneft dealhttp://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8356144/TNK-BP-proposes-taking-BPs-place-in-Rosneft-deal.html

TNK-BP’s management has proposed taking BP’s place in the controversial £10bn Rosneft deal in a plan that would give the British oil giant £5bn in cash, according to sources. By Rowena Mason 6:00AM GMT 02 Mar 2011

The Russian joint venture’s executives last week put forward a plan to gatecrash the deal amid a boardroom split between its two 50pc shareholders, BP and four Russian billionaires.

The four Russian investors, known as Alfa Access Renova, are unhappy that BP has agreed to swap £5bn of shares with Rosneft and explore the Arctic - excluding TNK-BP. They consider Rosneft to be a rival.

It is understood that the proposals involve TNK-BP subscribing for £5bn in BP shares.

TNK-BP would then swap this 5pc stake in BP worth £5bn for a 9pc stake in Rosneft – also worth £5bn.

Although BP would only end up owning half of the Rosneft stake through its 50pc shareholding in TNK-BP, the British oil giant would benefit from £5bn in cash from the issue of new shares.

The proposal will be subject to a vote on Friday, but is likely to be opposed by BP board members and vetoed by Rosneft.

Bob Dudley, BP’s chief executive, has previously cast doubt on whether the TNK-BP could afford to get involved in the deal and questioned its technical capabilities as a partner in Arctic exploration.

On Tuesday TNK-BP’s chief financial officer Jonathan Muir said the company would be able to raise the money required to get involved in the deal.

“At the moment we are confident of our balance sheet, that we would be able to raise the funds required,” Muir told reporters in Moscow.

TNK-BP may seek loans from banks as it refinances $500m of bonds this year.

Rabble rousing: TNK-BP offers to replace BP in Rosneft tie-up

http://www.bne.eu/dispatch_text14320

bneMarch 2, 2011

TNK-BP hopes to replace BP in its deal with Rosneft, according to a report this morning in British newspaper The Times. The Russian JV is said to have offered to buy a 5% stake in the British company for GBP5bn, allowing it to complete the planned share swap with the Russian state-controlled giant.

The proposal comes as the fight between TNK-BP shareholders AAR and BP hots up. AAR has managed to block the tie-up between Rosneft and BP in a London court, saying that the deal violates shareholder agreements inside TNK-BP. The trio is set for arbitration talks next week, whilst the TNK-BP board has rearranged a meeting for Friday, after AAR accused BP of deliberately avoiding the original date last week.

AAR has this week been pushing to enter the JV deal between BP and Rosneft to develop a challenging Arctic project. "In relation to Arctic opportunity it has been accurately reported that management at this point has proposed that the board consider participation," TNK-BP CFO Jonathan Muir told a conference call yesterday, according to City A.M., adding that the board was still considering the proposals.

However, without revealing sources, The Times reports that TNK-BP hopes to push BP out of the deal whilst it takes over. According to the plan, TNK-BP would buy the BP stake and then swap it for a 10% stake in Rosneft, essentially mirroring the original BP-Rosneft deal. Despite being a partner in TNK-BP, this would leave BP without the reserves it is seeking, but with GBP5bn compensation in its pocket.

However, the news only seems to increase suspicion that AAR is really just angling for a high value exit from TNK-BP by causing as much trouble as possible. The long-term nature of the Arctic project is at odds with the usual strategies of the oligarchs that control AAR, and whilst powerful figures, they're no challenge for the Kremlin, which is essentially the power behind Rosneft.

The state-giant has little incentive to bring TNK-BP into the deal, which it struck in order to attract international expertise in off shore drilling and to gain exposure to global

markets through the BP stake. As Rosneft's CFO outlined last month: "They have neither the technology, nor the experience, nor the personnel."

TNK-BP begins construction of intercession comprehensive gas treatment unithttp://www.istockanalyst.com/business/news/4933799/tnk-bp-begins-construction-of-intercession-comprehensive-gas-treatment-unit

Wednesday, March 02, 2011 1:53 AM

(Source: Datamonitor)TNK-BP has started construction of the intercession comprehensive gas treatment unit capacity of 450 million cubic meters per year in the framework of the integrated project Orenburg, which will almost eliminate the burning of associated gas and minimize emissions to the atmosphere in the region.

The volume of investments in Intercession CPF is $ 195.9 million, launch the installation is scheduled for May 2012. Integrated Project Orenburg brings together the main group of fields Orenburgneft and Sorochinskneft - its implementation involves the construction of additional refining capacity, new pipelines and compressor stations.

The project implementation will soon bring the rate of utilization of associated gas at TNK-BP in the region to 95%.

A service of YellowBrix, Inc.

Blow To Private Gas Sector As Gazprom Wins Kovykta Auctionhttp://www.oilandgasinsight.com/file/96867/blow-to-private-gas-sector-as-gazprom-wins-kovykta-auction.html

March 2011 | Company News Alert

BMI View : As BMI had expected, Rusia Petroleum has been sold to a Russian state-run company, with Gazprom having reportedly paid US$776mn to buy it, dealing a blow to Russia's private gas sector.

Russia's gas export monopoly Gazprom has won the auction of Rusia Petroleum , which is the licence holder of the Kovykta gas field. According to reports, the starting price was put at RUR15.1bn (US$525.5mn) and Gazprom bid RUR22.3bn (US$776mn) to secure the assets. This seems a low price when considering that the Kovykta field holds estimated reserves of 2trn cubic metres (tcm), under Russia's C1+C2 classification, making it one of the world's largest untapped conventional gas fields. However, according to Jonathan Muir, TNK-BP 's CFO, quoted by Dow Jones , the company is

pleased with the price, having invested US$675mn in Kovykta's development, it had aimed 'to get back what we've spent'.

The auction brings an end to years of wrangling between the Anglo-Russian joint venture (JV) TNK-BP, which owns a 62.7% stake in Rusia Petroleum, and the Russian government. TNK-BP acquired a stake in Kovykta in the 1990s, hoping to sell the gas to the lucrative Asia-Pacific market. However, those ambitions were dashed after Gazprom ...

Gazprom

02.03.2011

Gazprom, Statoil: Shtokman is Going According to Planhttp://www.oilandgaseurasia.com/news/p/0/news/10698

Shtokman is going according to plan, say Statoil and Gazprom. Ill.: Shtokman Development.

Shtokman partners Statoil and Gazprom are pleased with preparations for the first development phase of the huge gas field in the Barents Sea.The final investment decision is planned to be taken in March.

On Monday the Gazprom headquarters in Moscow hosted a working meeting between Alexey Miller, Chairman of the Company's and Helge Lund, President and Chief Executive Officer of Statoil, Gazprom’s web site reads.

"Alexey Miller and Helge Lund appraised progress with preparations for Phase 1 of the Shtokman field development and considered further steps on the way to the project execution", Gazprom says.

Two weeks ago Petr Sadovnik, Deputy Head of Rosnedra, the Federal Agency on Subsoil Usage, said that the Shtokman partners were discussing to postpone launch to 2018, as BarentsObserver reported. The reason  he said was the uncertain market for natural gas. Shtokman Development has denied the assertion.

The current plans see a start-up of pipe gas production at the field in 2016.

The Shtokman field, located more than 500 kilometers (310 miles) off the coast of Russia in the Barents Sea, may contain 3.9 trillion cubic meters of gas resources.

The venture aims to build a plant capable of producing 7.5 million tons of liquefied natural gas a year after output is started. About 90 percent of this supply was originally earmarked for the U.S.

Copyright 2010, Barents Observer. All rights reserved.

Srbijagas Wants to Expand to Banking, Insurance With Gazprom http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aG6XH8g2kp2g

By Gordana Filipovic

March 2 (Bloomberg) -- Serbia’s gas monopoly, Srbijagas, wants to expand into banking and insurance with Russia’s OAO Gazprom, Chief Executive Officer Dusan Bajatovic said.

The plan will be discussed during a visit to Belgrade by Russian Prime Minister Vladimir Putin later this month.

“I expect to discuss the establishment of joint banks and insurance companies between Srbijagas and Gazprom,” Bajatovic told reporters late last night while attending the Kopaonik Business Forum in Serbia.

Serbia’s central bank last granted a new banking license in 2008 to the Bank of Moscow, the first in years as Serbia tried to sell as many banks as possible to foreign investors. Bajatovic, the deputy chairman of the Socialist Party of Serbia, a coalition partner, said he expects no problem getting the required approvals.

Srbijagas indicated interest in the financial business in 2009, months after GazpromNeft acquired a 51 percent stake in Serbian oil company Naftna Industrija Srbije AD. At the time, the company was seeking a license to open a joint insurance company with Russian insurer Sogaz.

Bajatovic also said he expects talks with Putin to focus on bilateral energy agreements, including details to “fully respect” the oil company purchase agreement, the part of the South Stream gas pipeline that runs through Serbia, the Banatski Dvor natural gas reservoir and investments in gas-based electricity generation.

South Stream Project

The construction of the Serbian section of the South Stream pipeline will cost around 1.3 billion euros ($1.8 billion), Bajatovic said, with a local company managing the project, providing 30 percent of the funds and raising the rest from lenders.

Srbijagas has an accumulated loss of 300 million euros. Bajatovic said a tariff system will cover part of the losses.

Part of the loss may be counted as public debt, some of which stemmed from unrealistically low gas prices, weak debt collection, interest payments on loans and exchange-rate differentials, he said.

Bajatovic expects the government to discuss new gas prices for Serbian consumers around mid-April, with higher prices taking effect in May or maybe June.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Last Updated: March 2, 2011 03:39 EST