Russia 091103

Basic Political Developments Reuters: PRESS DIGEST - Russia - Nov 3 RIA: Medvedev congratulates Afghan president on re-election Itar-Tass: Medvedev congratulates Afghan president on re-election The Seoul Times: Russia and the War in Afghanistan - By Dr. Dmitry

Shlapentokh RIA: Russia to contribute $6.5 million to global nuclear security NTI: Nuclear Cargo Security Workshop Held in Russia Your Industry News: Protection of Nuclear Shipments Focus of U.S.-Russia

Workshop RFERL: Russia To Build New Nuclear Plant In Armenia Famagusta Gazette: Lavrov to visit Cyprus - Russian FM Sergei Lavrov will pay

an official visit to Cyprus on November 4, at the invitation of his Cypriot counterpart Markos Kyprianou

Focus: Putin warns EU – comments in the European print editions Itar-Tass: Yushchenko urges govt to amend gas contracts with Russia RIA: Russia, Ukraine to jointly seek release of crew seized in Congo RIA: Ukrainian police stop Russian military cargo - Ukrainian police in the

Crimea stopped on Tuesday morning a Russian truck carrying anti-ship missiles in the fifth such incident this year.

Arminfo: Armenian PM meets with delegation of UC RUSAL - The press service of the Government of Armenia reports that the sides discussed the prospects of Rusal Armenal CJSC in the face of the global crisis.

OfficialWire: Russia, Poland Ink Gas Deal Through 2037 HotNews.ro: Kremlin gets involved with the political fight in Moldova: Marian

Lupu and Vladimir Voronin go to Moscow Reuters: Russia's Putin sees climate deal, but with conditions Reuters: Poll ratings of Russia's Putin, Medvedev tumble BBC: 'Respectful disagreement' in Moscow - "I'm here to talk, not growl," said

David Miliband, as he ended his latest interview with a Russian journalist about this, the first Moscow visit by a British foreign secretary in five years.

RIA: David Miliband's tour of Moscow – by Andrei Fedyashin Guardian.co.uk: Miliband's talks: From Russia with civility Russia Profile: Kiss and Make Up - Miliband’s Visit Marks the End of a Freeze

Rather Than the Beginning of a Thaw Today.Az: Incident occurs in roundtable on Nagorno Karabakh conflict in

Moscow The Moscow Times: Arctic Research of Oil-Rich Territory Planned UralSib: Helicopter Producers: Output to improve in 2009 - 18% output increase

projected in 2009. Yesterday, Sergey Ivanov, Deputy Prime Minister, announced that helicopter production in Russia is projected to increase by 18% in 2009 to 200 units.

AFP: Last Arctic Sea sailors return to Russia RIA: Last 4 Arctic Sea crewmembers return home

RFERL: Ingushetian President Opens Culture Center In Almaty Asiaone News: Russian police boss sacked over poaching in Siberian tiger reserve RIA: Number of swine flu deaths in Russia rises to 10 KyivPost: Russia to make 35.5 million doses of swine flu vaccine by the end of

the year RIA: Soil moisture and ocean salinity to be measured from space 24.kg: Science Teacher held in Russia for trafficking heroin from Kyrgyzstan The Moscow Times: Luzhkov Replaces Moscow Prefect The Moscow Times: Former KGB Spy Kalmanovich Shot Dead BBC: Ex-KGB spy gunned down in Moscow Telegraph.co.uk: Former Israeli double agent shot dead near Putin's office Axisglobe: Shabtay Kalmanovich, spy, businessman and sports manager, shot

dead in central Moscow today The Moscow Times: Red Tape Swells Despite Kremlin Vow - For being just a

small strip of gray paper, a foreigner’s registration can become quite a bureaucratic nightmare — especially when you lose it.

Russia Today: Brain drain continues to plague Russia

National Economic Trends CommodityOnline: Russia reserve fund dips to $77.18 billion RenCap: Federal budget deficit in October was financed from sources other than

the Reserve Fund RBC: Bank of Russia tightens controls on banks

Business, Energy or Environmental regulations or discussions Bloomberg: AvtoVAZ, Center Telecom, Gazprom: Russian Equity Market

Preview Reuters: Russian markets -- Factors to Watch on Nov 3 Bloomberg: Gazprom, Lukoil, Novatek Upgraded to ‘Overweight’ at HSBC RenCap: Deripaska offers to repair RusHydro plant in return for cheap power RBC: Banks reduce overdue debts in September Reuters: RLPC-Russia's MDM signs increased $250 mln loan Alibaba.com: Nov. Russia government may raise scrap export duty RBC: NLMK to float exchange bonds Interfax: Highland Gold could grow Mnogovershinnoye reserves by 190,000 oz Sharecast: Highland Gold regains luster The Moscow Times: Gold Production Rises on Project Launches Bne: Hungarian-Russian talks on Malev to conclude in weeks The Moscow Times: Moscow Office Rentals In Q3 Hit 1-Year High Reuters: BRIEF-N.Renkaat sees slow Russian tyre mkt recovery WSJ: Russian Trust Svc Backs Down On Daimler/Kamaz Comment - Report WSJ: Renault Offers Avtovaz Know-How but No Cash Bne: Russian supermarket chains - seats reserved at the top table

Activity in the Oil and Gas sector (including regulatory) Gazeta.kz: Caspian pipeline consortium in January - October, 2009 increased oil

export by 11.6 %

Steel Guru: Russia oil export to non CIS in 10 months up by 3pct YoY Bne: Russian oil companies may be force to sell 10% of production via new

exchange Steel Guru: Watchdog in Rosneft and Gazprom feud LUKOIL PAYS FINAL TRANCHE FOR AKPET   Oil and Gas Eurasia: E.ON Expects to Produce 6 bcm of Gas at Yuzhno-

Russkoye Field Hungary MOL subsidiary gets potential buyer from Bosnia - Bosnian oil group

Optima, owned by Russia's Zarubezhneft, may bid for a stake in fuel retailer Energopetrol if a regional government does end a deal with a consortium of Hungary's MOL and Croatia's INA, Reuters reported. Optima already has plans to earmark EUR 200 m for the transaction.

Gazprom RBC: Gazprom boosts monthly gas production by 20% Reuters: UPDATE 1-Gazprom, Eni back EDF joining South Stream –Gazprom Nasdaq: Iran Co Says Gazprom Signed Azar Oilfield Development MOU Payvand Iran News: Russia's Gazprom inks MOU for development of Iran's Azar

oilfield Gazprom delegation visits China Oil and Gas Eurasia: Gazprom, CNPC begin commercial talks on price of Russian

gas deliveries to China

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Full Text Articles

Basic Political Developments

Reuters: PRESS DIGEST - Russia - Nov 3http://uk.reuters.com/article/idUKL325833020091103

Tue Nov 3, 2009 8:18am GMT

MOSCOW, Nov 3 (Reuters) - The following are some of the leading stories in Russian newspapers on Tuesday.

Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Russian Railways has transferred 916.8 million tonnes of freight in the first ten months of 2009, which is 18.7 percent less than in the same period of 2008, the daily writes.

- Russia's TNK-BP holding (TNBPI.RTS: Quote, Profile, Research) will pay an interim dividends of $3.9 billion for the first nine months of 2009, the paper says.

- The board of Russia's mobile telecoms operator Vimpelcom (VIP.N: Quote, Profile, Research) recommended to pay a dividend of 9.75 billion roubles ($335.7 million) for the first nine months of 2009, the paper reports.

VEDOMOSTI

www.vedomosti.ru

- The paper cites an independent poll as showing that 20 percent less Russians voted for the United Russia party in regional elections than the figures shown in officials results.

- Russian Railways may issue up to 200 billion roubles ($6.89 billion) worth of bonds before the end of 2010, the paper writes.

- The amount of rouble credits and mortgage loans grew by 0.7 percent in the third quarter of 2009, the paper says, citing central bank data.

GAZETA

www.gzt.ru

- Russians expect real wages will grow by 16 percent in 2010, and by 54 percent in the next 5-7 years, the paper writes, citing largest insurer poll.

ROSSIISKAYA GAZETA

www.rg.ru

- The rouble strengthened against the U.S. dollar by 9 percent in September-October of 2009, the paper writes.

RIA: Medvedev congratulates Afghan president on re-electionhttp://en.rian.ru/russia/20091103/156694273.html

11:2603/11/2009

MOSCOW, November 3 (RIA Novosti) - Russian President Dmitry Medvedev has congratulated Afghan leader Hamid Karzai on his re-election, the Kremlin press office said on Tuesday.

"I am convinced that friendly Russian-Afghan relations and multi-faceted cooperation between our countries will advance further for the benefit of the peoples of Russia and

Afghanistan, in the interests of peace and stability in the region," the congratulatory message said.

Karzai was declared the winner of Afghanistan's presidential elections on Monday when officials scrapped the second round of voting following the withdrawal of his opponent, former foreign minister Abdullah Abdullah.

Abdullah had wanted the removal of key election officials before taking part in the November 7 run-off, which Karzai had agreed to after international pressure following his fraud-tainted victory in the first round.

Itar-Tass: Medvedev congratulates Afghan president on re-election

http://www.itar-tass.com/eng/level2.html?NewsID=14494491&PageNum=0

03.11.2009, 11.19

MOSCOW, November 3 (Itar-Tass) - Russian President Dmitry Medvedev has sent a telegram of congratulations to Hamid Karzai in connection with his re-election as Afghan President.

“I am confident that friendly Russian-Afghan relations and multi-faceted cooperation between our countries will develop further for the benefit of the people’s of Russia and Afghanistan, in the interests of peace and stability of the region,” the Kremlin press service quoted the telegram as saying.

“Russia is ready to continue offering assistance in the establishment of an independent and democratic Afghanistan, contribute to a just and lasting peace in the country, to an improvement of its social and economic situation,” the telegram stressed.

The Seoul Times: Russia and the War in Afghanistanhttp://theseoultimes.com/ST/?url=/ST/db/read.php?idx=9019Tuesday, November 3, 2009Special ContributionBy Dr. Dmitry ShlapentokhAs time has progressed, it has become clear that Afghanistan is an increasingly challenging endeavor for the USA. While America has engaged in fighting a variety of forces, the most dangerous is international jihadism or, as it is usually called, Islamic extremism. While its ideology, as well as the ideology of any movement, is often contradictory, it still has clearly defined features that make it appealing to many people. One might state that the ideology of jihadism, in a way, replaces the Marxist ideology of old.First, it proclaims that Muslims are brothers regardless of their ethnicity or race. Secondly, it emphasizes social/economic equality and states that rich Muslims should

share their wealth with the poor. Thirdly, it stresses armed resistance and martyrdom as the way to exit from life and shows this by example to others.Finally, the ideologists of jihadism visualize the future as a universal Khalifat—the ideal society, sort of a replacement of Marxist communism.This universal aspect of jihadism makes it attractive to quite a few Muslims, some of whom go to Afghanistan, which is seen as one of the major battlegrounds between Muslims and infidels. There are a considerable number of jihadists from all over the world who go over there, including from Russia where several sources of jihadists have emerged.The first, and the most important, is, of course, the Russian Northern Caucasus. The anti-Russian resistance broke out here in the early 1990s under, basically, a nationalistic agenda—the creation of an independent state. By the late 1990s and, especially, in the early 2000s, nationalists with often pro-Western sympathies were increasingly pushed aside by the jihadists.Finally, in 2007, Dokka Umarov, the leader of the Chechen resistance and the president of the virtual Chechen republic promulgated an “emirate,” which heralded the end of the jihadist transformation of the movement.A similar process could be recorded in the other Muslim enclaves of the Russian Federation. Tatarastan, for example, had mostly a moderate nationalistic opposition throughout most of the 1990s. Still, with increasing pressure from the Kremlin, extremist jihadism became an attractive option. Jihadism also started to spread even among people who had never been historically Muslim.For example, a certain Said Buryatsky, who perished in a terrorist suicide attack, had at least some Buryat blood. (Buryats, close to Mongols, are traditionally Buddhists.) There were also increasing cases of ethnic Russians converting to Islam, and some became jihadists. This was, for example, the case with a certain Pavel Kosolapov, who has engaged in several terrorist attacks in Russia. Jihadists, similar to Marxist radicals of old, regard it their duty to fight what they regard as anti-Islamic, wherever they are located. Consequently, they often move beyond the borders of the Russian Federation and even the former USSR. Some of them moved to Afghanistan even before the American invasion in 2001.During the early years of the war, some of them were captured and landed in Guantanamo, later to be released and sent to Russia. Still, new jihadists recruited from Russia continued to arrive and participate in the fighting.According to some reports, there were several Chechens among the victims of a recent air strike called by a German commander in Baghlan Province in Afghanistan. There are indications that jihadists—quite a few of them from Tatarastan—have participated in the fighting in Pakistan, at least if one would trust their Internet sites. What is the implication of these jihadists for the war? It is true that although their numbers are still small, they could well have a considerable impact on the combat abilities of the fighters. The jihadists from the Russian Federation usually have good knowledge of weapons and, in the case of people from the Northern Caucasus, considerable combat experience and stamina.Thus, their role in the war in Afghanistan and Pakistan should not be downplayed. What could be done to deal with the problem? What is the most important way of slowing down the penetration of these people into the war zone? Cooperation with Russia and

other states that have borders with Afghanistan is the most important way: the sharing of intelligence and other confidential information would help to trace and wipe out potential fighters.Cooperation with Russia is not absolutely impossible, for a considerable segment of the Russian elite understand well that the Americans’ defeat and departure from Afghanistan would constitute a great danger, not just for the USA but for Russia as well. Still, the tracing of these individuals would be a daunting task, not only because of the lingering mistrust between Russia and the USA, but also because such an enterprise would require full cooperation with Iran and Pakistan’s full control over its borders.Contact:Dmitry Shlapentokh,PhDAssociate Professor of HistoryIndiana Universitye-mail: dshlapen@iusb.edu

RIA: Russia to contribute $6.5 million to global nuclear securityhttp://en.rian.ru/russia/20091103/156690456.html

02:3303/11/2009

UNITED NATIONS, November 3 (RIA Novosti) - Russia is planning to contribute $6.5 million to the IAEA Nuclear Security Fund (NSF) in 2010-2015, Russia's envoy to the UN said.

The NSF is a voluntary funding mechanism established by the International Atomic Energy Organization (IAEA) to support, among others things, the implementation of nuclear security measures to prevent, detect and respond to nuclear terrorism.

"Russia has made a decision to allocate a large voluntary contribution to the IAEA Nuclear Security Fund - $1.5 million in 2010 and $1 mln annually in 2011-2015," Vitaly Churkin told a meeting of the UN General Assembly on Monday, adding that he hooped the money would contribute to the strengthening of the system of nuclear safety.

The official also said that Russia contributed 23.6 mln rubles (over $800,000) to the IAEA Technical Cooperation Fund in 2009 and would continue making voluntary contributions in line with prior agreements with the IAEA.

In addition, Moscow contributed $10 mln to the Chernobyl Shelter Fund (CSF) in 2009 and will allocate another $7 mln to the fund next year, Churkin said.

The CSF was established in 1997 at the EBRD to assist Ukraine in transforming the existing shelter over Chernobyl's destroyed unit 4 to a stable and environmentally safe state.

NTI: Nuclear Cargo Security Workshop Held in Russiahttp://www.globalsecuritynewswire.org/gsn/nw_20091102_8095.php

Monday, Nov. 2, 2009

Officials from Russia and the United States met last week to discuss strategies for improving security in the transport of nuclear materials (see GSN, Oct. 19).

Participants met for three days in Kolontaevo, Russia to share best practices in training, equipping and operating security forces traveling with nuclear cargoes, according to a press release from the U.S. National Nuclear Security Administration.

The workshop followed a similar session in March at Fort Chafee, Ark. It involved officials from the NNSA Material Protection, Control and Accounting Program and Russian transportation security officials from Atomguard, Rosatom and the Internal Affairs Ministry.

"The National Nuclear Security Administration's long-standing cooperation with Russia on critical nuclear security issues demonstrates a shared commitment to learning and collaboration," said NNSA Principal Assistant Deputy Administrator Kenneth Baker in a press release. "Working together to ensure the secure transport of nuclear materials is another way we can help meet the president's commitment to secure nuclear material."

Moscow and Washington have been jointly working on security of nuclear shipments since 1996. The United States, through last month, had provided Russia with 283 reinforced nuclear material shipment containers, 115 escort vehicles, 97 cargo trucks, 77 freight railcars and 25 guard railcars (U.S. National Nuclear Security Administration release, Oct. 30).

Your Industry News: Protection of Nuclear Shipments Focus of U.S.-Russia Workshophttp://www.yourindustrynews.com/protection+of+nuclear+shipments+focus+of+u.s.-russia+workshop_41062.html

Monday, Nov 02, 2009U.S. and Russian officials today concluded a three-day workshop in Kolontaevo, Russia, designed to exchange expertise on the secure transportation of nuclear materials.  This joint workshop builds on and highlights U.S.-Russian cooperation outlined in the joint statement on nuclear security that Presidents Obama and Medvedev signed in July.

“The National Nuclear Security Administration’s long-standing cooperation with Russia on critical nuclear security issues demonstrates a shared commitment to learning and collaboration,” said NNSA’s Principal Assistant Deputy Administrator for Defense Nuclear Nonproliferation Kenneth Baker.  “Working together to ensure the secure transport of nuclear materials is another way we can help meet the President’s commitment to secure nuclear material.”

Members of the National Nuclear Security Administration’s (NNSA) Material Protection, Control and Accounting (MPC&A) Program, and Russian transportation security representatives from Rosatom, Atomguard, and the Ministry of Internal Affairs–Internal Troops (MVD-IT) participated in this week’s workshop, which is a continuation of a cooperative meeting at Fort Chaffee, Arkansas, in March 2009.  NNSA’s Office of Secure Transportation was part of that meeting.

U.S. subject matter experts from the MPC&A Program have been cooperating with Russian experts since 1996 to improve the training, equipment and procedures of guard forces accompanying shipments of nuclear material.  As of October 2009, 97 cargo trucks, 115 escort vehicles, 77 cargo railcars, 25 guard railcars and 283 security overpacks (reinforced nuclear material transport containers) have been procured through this cooperative program.  These activities will help ensure the sustainability and optimal utilization of transportation security assets and vehicles provided by the MPC&A Program.

U.S. and Russian participants expressed their belief that this workshop will result in a better understanding regarding procedures and training for protective forces involved in the shipment of nuclear material in the Russian Federation.

At a summit in Moscow earlier this year, Presidents Obama and Medvedev issued a joint statement outlining expanding cooperation on nuclear security issues.  In addition to accelerating efforts to secure vulnerable nuclear material around the world, the joint statement included a commitment to strengthen our cooperation to prevent the proliferation of nuclear weapons and stop acts of nuclear terrorism.

RFERL: Russia To Build New Nuclear Plant In Armenia http://www.rferl.org/content/Russia_To_Build_New_Nuclear_Plant_In_Armenia/1867519.html

November 02, 2009 YEREVAN -- The Armenian government says Russia will build a nuclear power plant in Armenia that will nearly triple the country's current levels of nuclear energy production, RFE/RL's Armenian Service reports.

Armenian Energy Minister Armen Movsisian told RFE/RL on October 30 that Armenia welcomes "all those who want to invest as a stakeholder in our future nuclear-energy unit."

The new facility will replace the 1979 nuclear power plant, also operated by Russian nuclear energy agency Rosatom, that is located in the western city of Metsamor.

Rosatom head Sergei Kirienko discussed construction plans for the new plant in a meeting with Armenian President Serzh Sarkisian last week.

The Metsamor plant, operating at a capacity of 400 megawatts, will be shut down by

2017 and replaced with the new unit, which is slated to have a capacity of 1,000 to 1,200 megawatts.

Famagusta Gazette: Lavrov to visit Cyprushttp://www.famagusta-gazette.com/default.asp?sourceid=&smenu=123&twindow=Default&mad=No&sdetail=9829&wpage=&skeyword=&sidate=&ccat=&ccatm=&restate=&restatus=&reoption=&retype=&repmin=&repmax=&rebed=&rebath=&subname=&pform=&sc=2350&hn=famagusta-gazette&he=.com

FAMAGUSTA GAZETTE 03.NOV.09Russian FM Sergei Lavrov will pay an official visit to Cyprus on November 4, at the invitation of his Cypriot counterpart Markos Kyprianou. According to an official statement, during his visit, Lavrov will be received by President of the Republic Demetris Christofias and he will attend a working lunch, at the Presidential Palace.

Later in the day, he will have a private meeting with his Kyprianou, followed by talks with the participation of the respective delegations from the two countries. Lavrov will also meet the President of the House of Representatives Marios Garoyian.

During Lavrov’s visit, Cyprus and Russia will sign a political consultations protocol for 2010 - 2011 and a cooperation programme in the fields of science, education and civilisation for 2009 - 2012.

Focus: Putin warns EU – comments in the European print editions http://www.focus-fen.net/index.php?id=n199201

(FOCUS News Agency) 3 November 2009 | 10:30 | FOCUS News Agency

Moscow. Russian Prime Minister Vladimir Putin urges European Union to grant Ukraine a loan to prevent the gas crisis during the winter, Sueddeutsche Zeitung commented. According to Putin, who warned of new problems, the EU must provide " one billion at least”. The European Commission said this summer that it has prepared to give Ukraine a loan for modernization of its gas network. Russia warns EU on potential problems with gas supplies, Austrian newspaper Di Press notes. According to the statement of Russian Prime Minister Vladimir Putin "problems" with gas deliveries to Europe via Ukraine are very likely to occur. Kiev must secure USD 500 million for natural gas deliveries in October. If Ukraine can not pay, Gazprom may insist on advance payment. Experts commented that Putin is trying to exert pressure in connection with presidential elections in Ukraine on January 17, 2010. Yesterday the Spanish State Secretary for European Affairs Diego Lopez Garrido visited Moscow, newspaper La Vanguardiya writes. Garrido said that "relations between Russia and the EU could depend on relations between Russia and third countries and this problem must be solved. Secretary of State was in Moscow to prepare the Russia - EU summit under the Spanish presidency of the bloc, which starts on January 1, 2010. But he explained that the strategic agreement between Brussels and Moscow may not be signed

during the first six months of next year. Russian Prime Minister Vladimir Putin asked the EU to help Ukraine's payments for natural gas, De Morhen Belgian newspaper says. Ukraine has obligations amounting to EUR 330 million. Putin hinted that gas supplies to Europe may be terminated in the event that Kiev did not pay quickly.

Itar-Tass: Yushchenko urges govt to amend gas contracts with Russia

http://www.itar-tass.com/eng/level2.html?NewsID=14493298&PageNum=0

02.11.2009, 22.32

KIEV, November 2 (Itar-Tass) -- Ukrainian President Viktor Yushchenko urged the government to amend effective gas contracts with Russia signed on January 19, 2009.

“In order to make further politicisation and artificial aggravation of relations in the gas sector impossible, these agreements have to be revised,” presidential spokeswoman Irina Vannikova said on Monday.

“The president of Ukraine is worried by the fact that less than two months before the end of the you’re the government has failed to officially settle key parameters of equal cooperation in the gas sector with Russia,” she said.

Vannikova noted that Yushchenko believes it necessary to determine “optimum volumes of natural gas purchases from Russia in 2010, taking into account the actual state of the economy, and also introduce mutually acceptable gas pricing formulas for Ukraine and the transit rate, taking into consideration the arrangements made by the presidents of the two states on February 12, 2008”.

On January 19, Russia’s Gazprom and Ukraine’s Naftogaz Ukrainy signed new long-term contracts for the transit of Russian natural gas to Europe through Ukraine and for gas supplies to Ukrainian consumers. The contracts allow no intermediaries between the two companies.

RIA: Russia, Ukraine to jointly seek release of crew seized in Congohttp://en.rian.ru/world/20091103/156693811.html

10:4103/11/2009

MOSCOW, November 3 (RIA Novosti) - Russian and Ukrainian diplomats will join efforts to seek the release of the crew of a cargo vessel accused of a murder in the Congo, the Russian Foreign Ministry said in a statement on Tuesday.

The 23-member crew of the Island of Luck vessel, including 15 Ukrainians and four Russians, was detained on October 20 in Matadi, the chief sea port of the Democratic

Republic of the Congo. Congolese police have accused the crew of murdering a local resident and beating several others.

The vessel brought 12 metric tons of rice worth $12,000 to Matadi on October 4. When preparing to release the ship from port, Congolese officials found three locals in the water near the vessel. The suspected illegal migrants were allegedly beaten by the crew and thrown overboard. A fourth reportedly drowned.

However, no traces of violence were found on three of the Congolese men, while the body of the fourth was buried without an autopsy on October 22.

The president of the Association of Sea Captains in the Russian Far East, Pyotr Osichansky, said the Russian sailors had appealed to Russian authorities for assistance in order to return home.

"The passports have been seized from the crew," Osichansky said.

The Russian Foreign Ministry said on its website on Tuesday that "the Russian Embassy in Kinshasa [the Congolese capital] is keeping the situation under control."

A Russian embassy source told RIA Novosti that no official charges had yet been brought against the crew and the Ukrainian members of the crew were the chief suspects.

A spokesman for the Victoria Oceanway Ltd., the operator of the ship, said Ukrainian diplomats had been informed of the situation and that the Ukrainian ambassador was likely to arrive in Kinshasa later on Tuesday.

RIA: Ukrainian police stop Russian military cargohttp://en.rian.ru/exsoviet/20091103/156694785.html

12:1503/11/2009

SEVASTOPOL, November 3 (RIA Novosti) - Ukrainian police in the Crimea stopped on Tuesday morning a Russian truck carrying anti-ship missiles in the fifth such incident this year.

Russia's Black Sea Fleet uses a range of naval facilities in Ukraine's Crimea, including a base in Sevastopol, as part of a 1997 lease agreement valid until 2017.

The Russian truck was taking the missiles to be decommissioned and, in accordance with safety requirements, was accompanied by two other vehicles and armed security personnel. Ukrainian traffic police demanded that it return to base, saying the Russian Black Sea fleet's actions had not been coordinated with the Ukrainian Navy.

Russian Black Sea Fleet officers who escorted the cargo maintain that they held documents allowing the transportation of missiles for decommissioning.

"For reasons unknown to us, Ukraine failed to notify the police, in particular traffic police and security service officers," a Russian Black Sea Fleet spokesman said.

The Russian officers said they would hold talks, adding that returning to the base was "senseless."

Ukrainian President Viktor Yushchenko has led calls for Russia to prepare to withdraw its fleet from Ukraine's territory when the agreement on the base expires, although Russia hopes to extend the lease.

Arminfo: Armenian PM meets with delegation of UC RUSAL

http://www.businessneweurope.eu/dispatch_text10337

ArminfoNovember 3, 2009

Yerevan. Today, Prime Minister of Armenia Tigran Sargsyan met with a delegation of UC RUSAL, led by Director for International and Special Projects Alexander Livshits.

The press service of the Government of Armenia reports that the sides discussed the prospects of Rusal Armenal CJSC in the face of the global crisis.

Presently, UC RUSAL is preparing for international IPO. The Western media report that the owner of the company, Oleg Deripaska, the richest Russian businessman before the crisis, now manages companies with a total debt of over $20bln.

In Jan-Sept 2009 Rusal Armenal increased the production of aluminum foil by 78% to 15,478 tons but decreased the output of rolled aluminum from 183.2 tons to 35.1 tons. In 2004-2006 Rusal Armenal was stopped by for complex modernization by the owner, UC RUSAL

OfficialWire: Russia, Poland Ink Gas Deal Through 2037http://www.officialwire.com/main.php?action=posted_news&rid=50701&catid=62

Published on November 03, 2009

by EU News Network

(EUNewsNet.com and OfficialWire)

MOSCOW, RUSSIA

Russian energy giant Gazprom and Poland's PGNiG signed agreements to increase gas supplies for Poland in a contract extending nearly 30 years.

Both companies agreed to a contract that increases the volume of natural gas from Russia to Poland until 2037, Gazprom announced.

Poland consumes around 483 billion cubic feet of natural gas each year. Its domestic production capacity can satisfy only 30 percent of that demand, however.

Russian natural gas is exported to Poland through a 425-mile section of the Yamal-Europe gas pipeline. Gazprom exported close to 280 billion cubic feet of gas to Poland in 2009.

Both companies also settled lingering disputes over gas transit fees and management.

The relationship between Poland and Russia in the gas sector is governed by an intergovernmental agreement signed in 1993.

HotNews.ro: Kremlin gets involved with the political fight in Moldova: Marian Lupu and Vladimir Voronin go to Moscow http://english.hotnews.ro/stiri-regional_europe-6401329-kremlin-gets-involved-with-the-political-fight-moldova-marian-lupu-and-vladimir-voronin-moscow.htm

de Olga Popescu, transl/adapt. C.B. HotNews.ro Luni, 2 noiembrie 2009, 17:22 English | Regional Europe

Marian Lupu, a runner up for Moldova's presidency, does not exclude signing a collaboration agreement between the Democratic Party from the republic of Moldova and the United Russia Party, Vladimir Putin's Party, according to unimedia.md. The information comes following Lupu and Vladimir Voronin's visits to Moscow. "Kremlin got involved in the political fight in Moldova, where a president cannot be elected after half a year", Kommersant reads.

Unimedia informs that has been invited by the United Russia (Edinaia Rossia), Vladimir Putin's party. He met with Constantin Kosaciov, president of the Foreign Policy State Duma, with the presidential administration chief Serghei Nariskin and with Tatiana Iakovleva, member of the ruling party.

Marian Lupu is the candidate for Moldova's presidency representing the Alliance for European Integration (AIE). To be elected, he needs to secure eight votes from the Communist Party.

Lupu's visit took place one day after Vladimir Voronin, the ex-president of the Republic pf Moldova, paid a visit himself to Moscow.

Communist Voronin, asked to decide for a leader

Kremlin got involved in the political fight from Moldova, a country left without a president for half a year now. According to Kommersant, Kremlin tried to convince Voronin to back the AIE leader to the Moldovan presidential elections.

Should the political crisis in Moldova lead to new parliamentary elections, the power might be taken by forces that are not favourable to Russia's interests, the publication goes on. Voronin's calling on Moscow can be Moldova's chance to get out of the political crisis. Communist deputies take 48 seats in the Parliament from Chisinau. They have refused so far to back Lupu for the president role. AIE holds 53 seats, not enough to elect a president on their own.

Voronin's presence in Moscow was not made official, but Kommersant received the confirmation both from the Moldovan Communist party leadership and from the Russian presidential administration.

"Voronin was received by the Medvedev administration chief, Sergei Naryshkin. The communist leader needs to understand that his political resources have run out. I proposed to Voronion very clear work schemes. Lupu's support was also on the agenda. So far, he ignored our suggestions. Let us see what he will do from now on", Kommersant reads.

The presidential elections date was not made official in Chisinau. But the pools need to take place no later than November 11. Previously, the Russian authorities have suggested many times that Lupu was a convenient solution.

Reuters: Russia's Putin sees climate deal, but with conditionshttp://in.reuters.com/article/worldNews/idINIndia-43621220091102

Tue Nov 3, 2009 1:22am IST

By Darya Korsunskaya

MOSCOW (Reuters) - Russia will support a new global climate deal only if major powers also sign up and take into account the role Russia's giant forests play as the lungs of the world, Prime Minister Vladimir Putin said on Monday.

Putin, in his first extensive comments on the climate talks, said Russia was ready to support a deal to replace the Kyoto Protocol at next month's United Nations climate change conference in Copenhagen.

Russia, the world's number three emitter of greenhouse gases, is seen as a key player in the talks.

"Yes, we are ready to do this," Putin said when asked by a reporter if Russia would support a deal in Copenhagen.

"We will support the idea of Mr. Rasmussen to have a politically binding agreement at the end of the Copenhagen meeting," said Putin, who was speaking after talks in Moscow with Danish Prime Minister Lars Lokke Rasmussen.

But Putin, who many diplomats and citizens believe is the true ruler of Russia despite stepping down as Kremlin chief to become prime minister in May 2008, said two conditions had to be met for Russia's support.

"All countries, especially those with the biggest emissions -- the world's major economies -- must sign this document without exception, otherwise it loses any logic," Putin said.

He added Moscow "will insist that the ability of Russia's forests to absorb carbon dioxide be taken into account".

WORLD'S LARGEST FORESTS

Russia has the largest forests in the world and says expanding forests means they help offset carbon dioxide emissions by other countries and should be taken into account when setting targets under a new deal.

"We've long known that Russia wants its forests included in a deal. But it's not provided satisfactory data on deforestation and on forestry management," said Bill Hare, of the Potsdam Institute for Climate Impact Research.

"Russia contends that the overall amounts of carbon in forests has increased since 1990," he said.

The United Nations says just a few degrees change in the world's climate could provoke floods, heatwaves, the extinction of animal species and the spread of diseases into new regions.

Rasmussen, speaking in an interview to Reuters, said he sees momentum for a deal next month and that he hoped to convince world leaders to attend the conference.

Russia's emissions are now more than 30 percent below 1990, the year before the Soviet Union fell, ushering in nearly a decade of economic collapse with emissions bottoming out during 1998.

Putin, who once quipped that a climate change could be positive as Russians would have to buy fewer fur coats, said that Russia was sticking to cutting greenhouse gas emissions to 30 percent below the 1990 level.

World Bank researchers say that under current forecasts for temperature change Russia's permafrost regions could partially melt and new pests could threaten the vast forests of Russia's north, though warmer temperatures could help increase crop yields.

According to the World Bank, one of the easiest ways for Russia to cut emissions would be to reduce the vast amount of energy -- equal to France's annual energy consumption -- it wastes for heating, electricity production and industry.

(For Reuters latest environment blogs click blogs.reu ters.com/environment)

(Writing by Guy Faulconbridge, editing by Myra MacDonald)

Reuters: Poll ratings of Russia's Putin, Medvedev tumblehttp://in.reuters.com/article/worldNews/idINIndia-43622520091102

Tue Nov 3, 2009 2:50am IST

MOSCOW (Reuters) - The approval ratings of Russian President Dmitry Medvedev and Prime Minister Vladimir Putin had their sharpest fall since Putin stepped down as Kremlin chief in May 2008, according to a poll by the Public Opinion Foundation.

Medvedev appointed Putin as prime minister after his election as president last year and the pair, dubbed the "tandem" by the media, has enjoyed consistently high ratings despite a sharp deterioration in the economy.

Public trust in the work of President Dmitry Medvedev and Prime Minister Vladimir Putin each fell six percentage points on Oct. 24-25 from a week earlier, the poll said.

Fifty-six percent of 2,000 people polled said Medvedev held their trust, down from 62 percent a week earlier. Sixty-six percent trusted Putin, down from 72 percent.

Support for the pro-Kremlin party of power, United Russia, fell four percentage points to 53 percent, the poll showed.

Russian media reports linked the fall to accusations of rigging in regional elections swept by United Russia on October 11 that prompted the opposition to briefly walk out of parliament.

Analysts say Russia's leadership risks a fall in support if the effects of the economic downturn drag on too long.

GDP is expected to contract by more than eight percent from its 2008 level this year. Unemployment has recovered slightly after hitting a 9-year high earlier this year.

BBC: 'Respectful disagreement' in Moscow Page last updated at 01:45 GMT, Tuesday, 3 November 2009http://news.bbc.co.uk/2/hi/uk_news/8339292.stm

By Bridget Kendall Diplomatic correspondent, BBC News, Moscow

"I'm here to talk, not growl," said David Miliband, as he ended his latest interview with a Russian journalist about this, the first Moscow visit by a British foreign secretary in five years.

By the end of the day he had honed his new definition for better working ties with Russia down to a neat formula.

"Respectful disagreement, or the respectful recognition of a disagreement, can be the basis of new agreement," he pronounced slowly.

Note the word "respect'". It came up a lot during his day in Moscow. A deliberate amendment to the old Miliband mantra of 'hard-headed engagement', apparently.

It looked like a conscious recognition that when relations were at their lowest ebb in 2007 and Britain wanted the extradition of the main suspect in the Litvinenko murder investigation, telling the Russian government to change its constitution to allow Russian suspects to be tried abroad had not been appreciated.

Not that Britain's demand has gone away, or Russia's refusal. But the aggrieved tone during this Moscow visit was mostly on Russia's side.

It was Britain in the person of David Miliband who came across as the supplicant - unwilling to paper over differences but keen to set relations on a better footing.

Meanwhile the Russian Foreign Minister, Sergei Lavrov, made clear Russia remains wary. Britain's stand over the Litvinenko affair was "absolutely unrealistic", he said, and an "artificial barrier to better relations".

During the afternoon came a visit to Ekho Moskva, the liberal radio station where only weeks before brother and fellow minister Ed Miliband, Britain's environment secretary, had been surprised by a call from an 87-year-old long-lost cousin.

Sofia Miliband made headlines round the world when she unexpectedly rang in to tell him she was the last living relative of a distant branch of the family that had moved to Moscow.

David confirmed on air that he too was looking forward to meeting her and hearing her remarkable story. The radio interviewer told him he understood she had now made her two new London cousins the beneficiaries of her estate when she died.

"I wish her a long life," said David Miliband.

Britain 'selling out'?

But the rest of the interview was not so friendly.

For more than half an hour he was grilled on any aspect of British foreign policy that differed from Russia's.

Why Britain felt it could demand the extradition of Mr Lugovoi, for example, while refusing Russia's demand for the extradition of Kremlin opponents like Boris Berezovsky; and why Iran was given such grief over its nuclear programme when India, Pakistan and probably Israel were under no such pressure.

Mr Miliband gave as good as he got.

"You sound like a spokesman of the Supreme Ayatollah," he joked nervously.

But other questions were just as tricky - whether, for example, he might become Europe's new foreign policy chief.

"As I've said many times, I'm not a candidate and I'm not available," said Mr Miliband, slightly awkwardly. And then added: "Anyway, rumours of the death of Tony Blair's candidacy as new EU President are greatly exaggerated."

"Are you sure you're not a candidate?" persisted the radio host, ensuring another apparent denial with the same careful wording.

Disagreement and distrust

Later on, talks with NGO representatives and a visit to the paper where the murdered journalist Anna Politkovskaya worked brought a different perspective - worries that Britain, in seeking to repair its rift with Russia, was selling out - swapping principles for realpolitik and economic interests.

"Our engagement with the Russian government has been principled, serious and respectable," said Mr Miliband.

"We try to explain to Russia our own perspective. It doesn't mean we have to compromise."

"This place won't change unless there is serious political reform," he added.

As he left he signed the visitors' book: "Anna Politkovskaya is much missed, but her independence and her values live on."

On the way back, his car made a brief detour to Red Square. By now night had fallen. The immense cobbled space could not have looked more dramatic. Red walls of the Kremlin along one side, the 19th century department store GUM lit up in silhouette, and the multi-coloured domes of St Basil's cathedral in the distance.

"I'm here on Red Square… I've been meeting NGOs, businesses and others today… this is an amazing place," he ad-libbed, as a press officer recorded it onto his mobile phone.

Press conferences and meetings were not enough. This was another version of the same message for his video blog.

And will this brief visit warm up UK Russian relations? The tests are to come - in possible trade deals, cultural links, and classic diplomatic collaboration when the next global crisis hits.

But on both sides, there is still plenty of room for disagreement and distrust.

RIA: David Miliband's tour of Moscowhttp://en.rian.ru/analysis/20091102/156688591.html

22:0802/11/2009

MOSCOW. (RIA Novosti political commentator Andrei Fedyashin) - An attempt to add a bit more warmth to the relations between Russia and Britain during the visit of British Foreign Secretary David Miliband to Moscow and his talks with Sergei Lavrov on November 2 seems to have gotten off on the wrong foot. From all appearances, Russian-British relations will remain in limbo until next summer.

This summer, Britain will hold parliamentary elections, which the Conservatives are likely to win, and Moscow will then have to build new relations with the British Cabinet. Strange as it might seem, the diplomatic tango between Moscow and London does not necessarily become more complicated or awkward when the Conservatives come to power. One can hardly conceive of anybody more conservative than Margaret Thatcher, but she was the first western leader with whom Mikhail Gorbachev started building new relations with the West.

The current situation is paradoxical in that Vladimir Putin, as president, and now President Dmitry Medvedev have developed sincere and business-like relations with most of Europe's main governments with the exception of Britain. These governments can be labeled: conservative (French President Nicolas Sarkozy), right (Italian Prime Minister Silvio Berlusconi) or center-right (German Chancellor Angela Merkel).

Moscow is least successful in developing relations with the U.K.'s (socialist) Labor Party. During the past five years relations between Moscow and London have been characterized by diplomat and spy extradition, government and semi-government office closure, court hearings, sanctioned officials (including visa denials) and a number of fallen oligarchs choosing London as a place of residence. It should be noted that France, Switzerland and Spain have their share of expatriated Russian oligarchs, but they seem to behave differently in these countries, being somehow less overt. This is difficult to explain; maybe the environment differs from that of the British Isles.

Mr. Miliband is the first British foreign office chief to come to Moscow in five years. The last time was Jack Straw's visit in July 2004. It's hard to contemplate a worse "reagent" for a Russian-British thaw than Mr. Miliband.

Ironically he arrived in Moscow on November 1, the day when former KGB agent Alexander Litvinenko was ostensibly poisoned with polonium-210 in London three years ago. The Litvinenko case has been a key irritant in Russian-British relations, and one cannot speak about it without mentioning Mr. Miliband. He was appointed Secretary of State for Foreign and Commonwealth Affairs in June 2007. One of his first Russia-related cases was the expulsion of three Russian diplomats in response to Moscow denying London's request to extradite Andrei Lugovoi. Mr. Miliband had demanded the extradition of supposedly the only culprit in the Litvinenko murder. Sergei Lavrov replied that it was impossible since: A) Russia is not going to change its Constitution and B) British evidence was insufficient. This situation mirrors the controversy over Russian asylees. Moscow has demanded the extradition of Boris Berezovsky and Aslan Maskhadov more than once, but Britain says the Russian Prosecutor General's Office hasn't submitted the requisite documents allowing an extraction.

The personal relationship between Mr. Miliband and Mr. Lavrov could not be worse. The British even assert that last September Mr. Lavrov allegedly lashed out at Mr. Miliband saying he would not listen to his preaching and reprimands in a telephone conversation initiated by his British counterpart right after the war in South Ossetia started. Moscow asserts this never happened. Knowing Mr. Lavrov as a diplomat, this hardly seems likely. In the diplomatic community, he is considered experienced and skillful. However, knowing Mr. Lavrov as a person, it's very easy to believe.

All in all, something has to change in relations with Britain. This applies to both Moscow and London, since they are equally responsible for this conflicted relationship.

The fact is that the British secretary didn't need to come to Moscow to reach these agreements with his Russian counterpart on November 2. The declarations on non-proliferation support, stabilization in Afghanistan and support for the plans to enrich Iran's uranium in Russia could have been released without the visit.

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

Guardian.co.uk: Miliband's talks: From Russia with civilityhttp://www.guardian.co.uk/commentisfree/2009/nov/03/miliband-russia-medvedev-litvinenko

EditorialThe Guardian, Tuesday 3 November 2009

There is a substantial paradox in the relationship between Russia and Britain. Trade between the two nations has tripled in the last six years and Britain remains the fourth

biggest foreign investor in Russia. There are also about 250,000 Russians living in the south-east of England. But among that select group of people whose job is to get on with each other – British and Russian diplomats – things could not have been worse. The dialogue at one point descended into expletives over Russia's war with Georgia. And as a result, Britain has the worst bilateral relationship of any other major EU state. It's a case of relations being good in practice and bad in theory.

Somewhat late in the day, David Miliband is in Moscow to restore an official relationship in dire need of repair. His visit is the first in five years, although Gordon Brown speaks frequently to the Russian president Dmitri Medvedev. There was no attempt to evade the subject that produced the big freeze, the poisoning of the former Russian agent Alexander Litvinenko in London three years ago, and no breakthrough on Britain's demand that the prime suspect in his killing, Andrei Lugovoi, be extradited. Apart from Lugovoi's extradition, Britain continues to demand things that it knows Russia will not deliver, such as an admission that the Russian secret services were involved in Litvinenko's murder and an assurance that it will never happen again. And there is no indication that Britain is prepared to relax the visa restrictions on senior Russian officials, which diplomats say cause disproportionate irritation to the Russian elite.

These issues remain unresolved. What is new and welcome is a mutual determination not to let the consequences of this affair affect overall bilateral relations. Mr Miliband's hand has been forced by Barack Obama's decision to press the reset button. One can debate the benefits this has achieved: America traded a missile defence system that did not work for an influence on Iran that Russia did not have. But engagement has undoubtedly produced a better atmosphere from which to launch negotiations on bigger, technical and more complex issues. Talks to replace the Start 1 agreement which expires in December are difficult enough. Under a continuation of George Bush's policies, attempts to find a compromise would have been doomed.

The continued impasse with Russia was an example of Britain punching well below its diplomatic weight, and it is high time that this was changed. If yesterday's visit has provided the political impetus to do this, then there should be fewer expletives in the dialogue and more communication.

November 2, 2009Russia Profile: Kiss and Make Uphttp://www.russiaprofile.org/page.php?pageid=International&articleid=a1257183166

By Roland OliphantRussia Profile

Miliband’s Visit Marks the End of a Freeze Rather Than the Beginning of a Thaw

When David Miliband arrived in Moscow yesterday, his visit was heralded by both sides as an opportunity to “reset” relations. Borrowing a phrase from their relations

with the United States, the Russians have heralded the visit as an opportunity to “reset” relations with Britain. But the British seem just a little more standoffish.

Britain does not hold half the hypnotic grip on the Russian imagination that the United States does. But anyone listening to the rhetoric surrounding British Foreign Secretary David Miliband’s arrival in Moscow yesterday could be forgiven for thinking that another American was visiting. Borrowing directly from language coined by the U.S. secretary of state to describe the Barack Obama administration’s reaching out to Moscow, the Russian Ambassador to Britain Yuri Fedotov called the visit “a chance to reset our relationship” in an article for the Guardian.

Britain’s relationship with Russia is not a mirror of America’s - Russia has much stronger business and economic ties with the UK, for example - and the thorns in their sides are also slightly different. The United States tends to row with Russia about Georgia; for Britain, the sorest point is – and will probably continue to be – the murder of Alexander Litvinenko.

Nonetheless, the reset of either relationship is likely to follow the American pattern of trying to agree to disagree on the points of intractable contention, while emphasizing cooperation in whatever areas of common interest can be found, which in both cases are pretty much limited to Iran and Afghanistan. “It is not a breakthrough,” said Fydor Lukyanov, the editor in chief of the Russia in Global Affairs journal, “as much as a return to ordinary business. The period of treating each other as if we were in the Cold War is finished. But it doesn’t mean we’re friends.”

Russian-British relations have been in the deep freeze since the autumn of 2007, when the former FSB officer and vocal Kremlin critic Alexander Litvinenko was murdered by polonium poisoning in London. His death kicked off a diplomatic row that resulted in a tit-for tat expulsion of diplomats, the suspension of cooperation between the two counties’ intelligence services, and the closure of the British Council’s offices in Yekaterinburg and St. Petersburg. The Russian-Georgian war last August did nothing to improve matters - Miliband and his Russia counterpart Sergei Lavrov were even reported to have had a less than diplomatic exchange of opinions. And relations were further strained by a battle between the British and Russian shareholders of TNK-BP, the Anglo-Russian oil company. In short, said Lukyanov, “Relations between Russia and Britain have been at their worst since the end of the Cold War.”

Lavrov’s invitation to Miliband, and the Russian talk of a “reset” in relations, signifies a longstanding willingness, at least on the Russian side, to put those quarrels to rest. “There was always an attitude on the Russian side that we should forget the issue of Lugovoi and Litvinenko and move on,” noted Oksana Antonenko of the International Institute of Strategic Studies in London.

Britain has been noticeably more reluctant to normalize relations in the wake of that diplomatic spat. From the Russian point of view the decision to break off the relationship was a British one, and in some cases – the suspension of intelligence cooperation, for

example – that is true. But although the British have avoided the kind of upbeat rhetoric coming from the Russian side, there does now seem to be some willingness to move forward. “The change of leadership in the United States, and the new momentum in Russia’s relationship with Europe and NATO, was leaving Britain a little on the sidelines,” said Antonenko.

At a press conference Monday neither Miliband nor Lavrov tried to overplay the common ground. Both spoke of their disagreement over the Litvinenko affair, and the only common ground they could really speak of was, predictably, on Iran and Afghanistan. And despite Miliband’s hailing of business and cultural ties between the two countries, the differences still run much deeper.

Because the two-year freeze in relations has coincided almost exactly with Miliband’s tenure at the British Foreign Office, some in Russia have accused him of having a personal vendetta against the country. His suggestion that Russia should change its Constitution to allow it to extradite Andrei Lugovoi, the chief suspect in the Litvinenko murder, has gone down as a notorious example of Western arrogance. A change of personality, some suggest, could be the way forward. William Hague, the shadow foreign secretary who is likely to succeed Miliband after the British general election next year, recently made a speech suggesting that a conservative government would reach out to Russia.

There’s not much hope of that, however. For a start, Miliband probably does not have a vendetta against Russia (much of the criticism, it should be said, has been nothing but ill-disguised anti-Semitism), and his now notorious suggestion about changing the Constitution was probably intended as a way out of the impasse. “If anything, Miliband has been more pragmatic toward Russia than many,” said Antonenko.

Then there was the successive British government’s frosty attitude to the European Union, which is enough to illustrate that strong business ties are not enough to trump public opinion in political decision making. Britain’s business ties with Russia are much weaker than those with the EU, and the British press is even more unanimously suspicious of Russia than it is of Europe. The business lobby is unlikely to have a huge say in Whitehall’s approach to Russia.

Nor is the Litvinenko case going to go away. The fact that an act of nuclear terrorism could be carried out in London “shocked the British political elite to the core,” said Antonenko, and the inquest into the affair is likely to be concluded under the next – probably conservative – government. When it does, there is likely to be another outcry in the press, and no British government, whether labor or conservative, will be able to let the matter rest. 

Today.Az: Incident occurs in roundtable on Nagorno Karabakh conflict in Moscowhttp://www.today.az/news/politics/57138.html

03 November 2009 [10:08] - Today.AzAn incident occurred at the roundtable on “Nagorno Karabakh conflict: creating conditions for establishment of peace. Russia’s role” held in the editorial office of the Izvestia newspaper in Moscow.

Chairman of Russia’s Islamic Committee Heydar Jamal, who attended the meeting, said the incident was due to participation of the separatist regime representative at the meeting.

“We demanded that he should participate in the event as an individual, not as the representative of Nagorno-Karabakh. As his words were a political statement, but not what a participant was expected to say, he was immediately expelled from the roundtable,” he said.

Jamal said there were more Armenians than Azerbaijanis in the discussions adding that Rasim Musabayov and Avaz Hasanov represented Azerbaijan.

“Though I was invited to the roundtable as the chairman of Russia’s Islamic Committee, I can be considered the person who represented Azerbaijan, sinceI support Azerbaijan’s position in Nagorno-Karabakh issue,” he said.

Jamal believes that Nagorno-Karabakh conflict would have been impossible, if it had not been for Russia support to Armenia.  

“Taking into account these two moments, we had an opportunity to express our views. The injustice of the Armenian experts caused negative climate, and made a nonprofessional analysis into the situation.”

“As usual, the meeting did not emphasize the major issues. Less time was allotted for speeches, but the Armenians spoke more, as more Armenians attended the roundtable and they did not obey the regulations. I told the participants that the countries around the South Caucasus – Iran, Turkey, Russia, Europe are not interested in the settlement of the conflict, as they use the current situation for their interests,” Jamal said.

“Russia does not want the conflict to end without its participation, because always, in the Soviet times, anti-Azerbaijan lobby that united around Beria demonstrated solidarity with the national interests of Armenians. Russia played anti-Azerbaijan role in the Soviet times and in the post-Soviet history. Russia is interested in the protraction of the conflict. Earlier, there was Azerbaijan-Turkey unity against Armenia and Iran. Now, due to the new format of Armenia-Turkey relations, Azerbaijan has been ringed by Iran, Armenia, distancing Turkey and Moscow that supports Yerevan-Tehran line. The role of the West is also obscure. So, Azerbaijan is in a strategic isolation,” he said.

The Moscow Times: Arctic Research of Oil-Rich Territory Planned http://www.themoscowtimes.com/news/article/arctic-research-of-oil-rich-territory-

planned/388674.html

02 November 2009

Russia is planning extensive research to support its claim to a broad swath of energy-rich territory beneath the Arctic Sea, a senior official of the country’s icebreaker fleet said Friday.

Icebreakers will lead research vessels into the Arctic in a series of missions over the next three years to conduct a detailed geological analysis of the seabed, said Andrei Smirnov, deputy director for operations at Atomflot.

Smirnov said researchers are planning an Arctic mission that will depart in June. It will include an atomic icebreaker and a research ship.

(AP)

UralSib: Helicopter Producers: Output to improve in 2009http://www.businessneweurope.eu/dispatch_text10337

UralSib, RussiaNovember 3, 2009

18% output increase projected in 2009. Yesterday, Sergey Ivanov, Deputy Prime Minister, announced that helicopter production in Russia is projected to increase by 18% in 2009 to 200 units.

Demand projected to stay strong. Despite the output target of 200 being 13% lower than previously announced, it nevertheless is 18% higher than output in 2008, and confirms our view that the domestic helicopter industry is well positioned and not affected by the recession. Demand for domestic helicopters is supported by both export contracts and state orders. The latter, according to Sergey Ivanov, should generate demand of about 1,000 units in 2010-20 (or an average 91 helicopters per annum, which represents about a half of the production volumes of Russian producers, according to our estimates). The 13% downward revision of the 2009 production target was possibly caused by short-term delays in export contracts. We nevertheless expect a continuation of output growth in 2010, supported thereafter with strong demand for Russian Mitype helicopters, which have a competitive price advantage and sufficient quality, which is very attractive in developing countries (the main consumers of Russian helicopters).

Positive for the share performance of helicopter producers. This news is in line with our expectations for the helicopter industry, which is one of the bestpositioned in the defence sector. We view Kazan Helicopters and Ulan-Ude aviation plant as the main winners from helicopter industry development (having contributed 33% and 35% of total production in 2008) and believe export contracts and domestic fleet replacement should ensure a high medium-term capacity loading factor. This in turn should have a positive

impact on the companies' financials in the foreseeable future. We also highlight that both companies have healthy balance sheets with a 2009E net debt/EBITDA of 0.13 which we see as an advantage in the current market environment. Hence, we reiterate our positive view on the helicopter industry and, in particular, Kazan helicopters and Ulan-Ude aviation plant.

Anna Kupriyanova

AFP: Last Arctic Sea sailors return to Russiahttp://www.google.com/hostednews/afp/article/ALeqM5h__39ndj4BWNDEE63IrrVg6rUVhg

(AFP) – 30 minutes ago

MOSCOW — The four remaining sailors from the Arctic Sea, the cargo ship at the centre of an international piracy mystery, have returned to their hometown in Russia after over three months at sea.

Television pictures showed the smiling sailors arriving at the airport in Russia's northern city of Arkhangelsk and hugging their relatives, who also greeted them with flowers and champagne in plastic cups.

"Hurrah!" some relatives cried as the sailors emerged from the landing area into a dense crowd of family members and journalists.

Captain Sergei Zaretsky denied that his ship was carrying any secret cargo, after widespread media speculation that it may have been carrying weapons, drugs or even nuclear materials.

When asked what was on board the Arctic Sea, Zaretsky said: "Sawn timber in bundles. 6,702 cubic metres. And that's it. Nothing else!"

The Russian-crewed, Maltese-flagged ship was carrying a listed cargo of wood from Finland to Algeria when, according to investigators, it was boarded by masked pirates posing as police near the coast of Sweden in July.

The boldness of the seizure -- in one of Europe's busiest shipping lanes -- and the huge international effort to recover the vessel prompted speculation that it may have been carrying a secret cargo.

After the Arctic Sea was recaptured by Russian warships in August, Moscow said nothing suspicious was found on board and strongly denied reports that it was carrying advanced S-300 anti-aircraft missiles to Iran.

Maltese officials said last week that they had determined the ship to be free of radioactive materials or dangerous chemicals, after Russia formally handed over the ship to the small

Mediterranean island nation.

The four sailors -- the captain, boatswain and two mechanics -- had remained aboard the ship for more than two months after its recapture, while 11 other sailors went back to Russia immediately after being rescued.

In recent weeks the wives of the four issued a series of emotional public statements urging the release of their husbands, who were left to staff the ship while it was under the control of the Russian navy.

Russian investigators said last week that the four sailors are not regarded as suspects and that authorities had finished questioning them about the hijacking.

The 11 other sailors were detained upon returning to Russia and apparently kept from speaking to their families or the media, fuelling speculation of an official cover-up.

Eight men -- including Russians, Estonians and Latvians -- have been accused of hijacking the Arctic Sea and are now awaiting trial in Moscow on charges of piracy and kidnapping. They have maintained their innocence.

RIA: Last 4 Arctic Sea crewmembers return homehttp://en.rian.ru/russia/20091103/156689849.html

00:3803/11/2009

ARKHANGELSK (Russia), November 2 (RIA Novosti) - Four sailors, who remained on board the Arctic Sea cargo vessel after a mysterious hijacking case, returned on Monday to their home base in northern Russia.

The other 11 Russian crewmen have already been sent home. They were held for several weeks for questioning by Russian authorities and were subsequently released, reportedly after being sworn to secrecy.

"I am happy to be back home," the captain of the ship, Sergei Zaretsky, told reporters in Arkhangelsk.

He criticized the media for controversial and biased coverage of the Arctic Sea incident, insisting that the ship carried a shipment of timber rather than an allegedly illegal cargo.

The Arctic Sea disappeared in the Atlantic on July 24 while carrying a $2 million shipment of timber from Finland to Algeria and was intercepted by the Russian Navy off West Africa on August 17, when eight alleged hijackers were arrested.

The ship had been anchored to the east of Gibraltar for weeks and guarded by two Russian vessels as Algeria, the vessel's original destination, denied the vessel entry. It was then towed to Malta.

On Thursday, the Arctic Sea was handed over to Maltese authorities. The ship was given permission to enter the port following a thorough inspection by Maltese officials.

The head of Finnish company Solchart, the ship's operator, said the inspection showed the Arctic Sea was not carrying any illegal cargo.

A new crew of 14 sailors flew from Russia to Malta on Wednesday to replace the captain and three sailors who had remained on the vessel.

The ship's disappearance, which triggered a major international search effort, raised suspicions about it carrying a "secret cargo" of drugs or weapons. Russian authorities have denied the rumors, saying the vessel was hijacked by criminals who demanded a ransom.

Russia's special investigations committee announced last Friday that all 14 crewmembers of the Arctic Sea had been formally recognized as victims of a pirate attack.

RFERL: Ingushetian President Opens Culture Center In Almaty http://www.rferl.org/content/Ingushetian_President_Opens_Culture_Center_In_Almaty/1867504.html

November 02, 2009 ALMATY, Kazakhstan -- The president of the Russian Republic of Ingushetia, Yunus-Bek Yevkurov, presided at the ceremonial opening of an Ingush Cultural Center in Almaty on October 30, RFE/RL's Kazakh Service reports.

At a meeting with leaders of the Ingush diaspora in Kazakhstan, Yevkurov said: "I envy you that you are living here in peace, keeping the traditions of your ancestors."

Yevkurov arrived in Kazkahstan on October 28, although Kazakh state media did not report on his visit.

Yevkurov -- who was appointed head of Ingushetia by Russian President Dmitry Medvedev last year -- was seriously wounded in an assassination attempt on his convoy in Ingushetia in June.

There are some 20,000 ethnic Ingush in Kazakhstan living as Kazakh citizens.

Asiaone News: Russian police boss sacked over poaching in Siberian tiger reservehttp://news.asiaone.com/News/AsiaOne%2BNews/Crime/Story/A1Story20091103-177663.html

Tue, Nov 03, 2009AFP

MOSCOW, RUSSIA - A senior Russian policeman has been sacked after his officers were accused of illegal hunting in a wildlife reserve designed to help save the rare Siberian tiger, the interior ministry said Tuesday.

Alexander Gerlikhman, head of transport police in the port city of Nakhodka in Russia's far east, was sacked in connection with the poaching incident at Zov Tigra (Roar of the Tiger) preserve, the ministry said in a statement.

The incident occurred in late September after a group of Nakhodka transport police were caught with hunting gear and a dead animal by wildlife inspectors on the territory of the preserve.

The inspectors stopped the police officers' car when they looked inside the vehicle and saw ammunition, a rifle and "a large bag from which the paw of an animal, believed to be a bear, was sticking out", the statement said.

However the police officers refused to let the car be searched and fled the scene, it said.

The Zov Tigra preserve, which takes up more than 80,000 hectares (197,700 acres) in the Primorye region of Russia, was established in 2007 to help protect wildlife including the endangered Siberian (or Amur) tiger.

RIA: Number of swine flu deaths in Russia rises to 10http://en.rian.ru/russia/20091103/156690165.html

01:3803/11/2009

MOSCOW, November 3 (RIA Novosti) - The death toll of the swine flu pandemic in Russia has risen to at least 10, the country's consumer rights watchdog said on its website on Tuesday.

"Russia has so far registered 10 deaths from the pandemic H1N1 virus, complicated by pneumonia, among people aged 20-53, including eight in the Trans-Baikal Territory, one in Moscow and another one - in the Krasnoyarsk Territory," Rospotrebnadzor said.

According to the agency, all of the sick patients were late to report their illnesses as they sought medical attention 3-5 days after feeling the first symptoms of the disease, when the swine flu virus had already led to complications in the form of pneumonia and toxic shock.

The most threatening situation with swine flu has been monitored in Russia's Far East, Siberia and Moscow, Rospotrebnadzor said.

The swine flu cases in Russia began growing considerably in October, traditionally the time for a seasonal flu outbreak. The total number of officially confirmed swine flu cases in the country has reached almost 2,000.

Russian Health Minister Tatyana Golikova earlier said the country planned to start a swine flu vaccination program on November 9, primarily in the regions that were severely hit by the H1N1 virus outbreak.

According to the World Health Organization, more than 5,700 people have died from swine flu worldwide, and the total number of officially confirmed cases has exceeded 440,000, as of October 25.

KyivPost: Russia to make 35.5 million doses of swine flu vaccine by the end of the yearhttp://www.kyivpost.com/news/russia/detail/51777/

Today at 09:11 | Interfax-Ukraine Moscow, November 2 (Interfax) - The first people to be vaccinated against swine flu will be those living in regions that border districts where the number of cases are above the epidemic threshold, said Russian Minister of Health Care and Social Development Tatyana Golikova.

"The regions that will be the first to receive a vaccine against the A/H1N1 virus will be identified in the near future. Golikova said that the first supplies of vaccinations will be sent to regions bordering those where the number of cases are above the epidemic threshold," the Health Care and Social Development Ministry said in a statement.

"The plan is to produce 35.5 million vaccine doses before the end of 2009 and 43 million vaccine doses before the end of January 2010," the ministry said in the statement issued on Monday after an emergency meeting between the Russian health minister and domestic manufacturers of swine flu vaccines.

RIA: Soil moisture and ocean salinity to be measured from spacehttp://en.rian.ru/analysis/20091103/156689764.html

00:2203/11/2009

MOSCOW. (RIA Novosti commentator Alexander Peslyak) - Early in the morning of November 2, a Rokot carrier rocket, which is a derivative of the SS-18 ICBM (NATO reporting name SS-19 mod.2 Stiletto), was launched into orbit from Russia's Plesetsk Space Center. It carried two European Space Agency (ESA) satellites: the SMOS (Soil Moisture and Ocean Salinity) and PROBA-2 (PRoject for OnBoard Autonomy).

As ESA representative in Moscow Rene Pischel told RIA Novosti during an interview, the simultaneous launch of these two satellites marks a new chapter in the history of studying the Earth from space and the ESA's Living Planet Programme.

According to his colleague Volker Liebig, the SMOS satellite is the most important spacecraft in the Earth Explorer series and will be used for research into two aspects of Earth's complex climate system. Over the next three years, it will record soil moisture and the salinity at various locations in the world's oceans.

The latest space-based remote sensing technologies can use electromagnetic waves to help study the Earth's water cycle, make weather forecasts more precise, simulate climate situations, and obtain useful knowledge for agriculture and water resources management.

The data obtained from this line of research will allow scientists to create the first continuously updated, high-precision map of the salinity of the world's oceans and enrich their knowledge of the principles of oceanic flows and their influence on climate systems. Exact data on the Earth's hydrologic cycle will help scientists understand phenomena causing climate change, as well as predict extreme weather conditions and the sources of storms and hurricanes.

"We are very interested in monitoring the North Atlantic: it is there that we have the highest average water temperature, salinity and density," says Vladimir Sokolov, a department head at the State Oceanographic Institute. "It is the 'birthplace of weather' for the entire Eurasian continent. Although the North Atlantic receives a large portion of the entire fresh water influx, including fresh water from rivers, it maintains the highest salinity in the World Ocean because of a high evaporation rate." The evaporation transforms into energy producing an average thermal anomaly of up to 10 degrees, which affects Europe as well.

The scientist says the SMOS will help test the theory of antiphase temperature oscillations in the land-ocean cycles, and thus allow us to see more clearly what is in store for us in the near future. It will also shed light onto the question of whether Western Europe will turn into Magadan, a city in north-eastern Russia, if heat transfer from south to north is disrupted.

The PROBA-2 satellite will serve as a platform for testing 17 new technologies to be used in future spacecraft. Additionally, the Belgian engineers who designed the satellite will stage two experiments in different frequencies to measure the solar radiance and the solar corona, and, at the initiative of Czech scientists, two experiments on space weather.

In total 10 European countries and Canada contributed to the satellite program. The PROBA-2 is the smallest of the ESA's spacecraft, and is shaped like a cube with one side measuring a little more than 0.5 meter and a weight of 130 kg. The agency says cheaper satellites could allow smaller companies to gain experience in satellite construction, which is vital for European companies to be competitive.

The Mission Control Center outside Moscow, along with stations in Norway, Spain, France and Sweden, will control the satellites and oversee the collection of data.

Russian engineers took the satellites' specifics into account when planning the launch. Firstly, the Rokot is the only Russian space launch vehicle (SLA) whose nose cone can be installed when the rocket is already in a vertical position at the launch pad. Secondly, according to Andrei Novikov from the Khrunichev Space Center, the satellites are attached to the SLA via an adapter system that is similar to a "kind of a Matryoshka nested doll that serves both as a fastener and a protective cover."

The nose cone is fitted atop the Briz-KM upper stage, thus allowing a design formerly used for ICBMs to be adopted to that of a carrier rocket. Equipped with a set of instruments and control systems, the Briz launches satellites into their prospective orbits. According to ESA specifications, the heavier SMOS will be launched into a 760 km-high orbit first, and then the Briz will carry the trial PROBA-2 down to a lower orbit altitude, releasing it at an altitude of 725 km to prevent a collision between the two spacecraft.

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

24.kg: Science Teacher held in Russia for trafficking heroin from Kyrgyzstanhttp://eng.24.kg/investigation/2009/11/03/9534.html

03/11-2009 09:07, Bishkek – News Agency “24.kg”, By Arstan AALYEV

A science teacher from Kyrgyzstan was held at the Yekaterinburg (Russia) train station while carrying 3 kilograms of pure heroin through the border, the Russian media reported.

The woman reportedly carried drugs in banana boxes, where 24 small packages with drugs were glued to the sides of the boxes. The interrogating officers learnt that the teacher was promised $3,000 for mulling the drugs.

The investigation goes on. At the time the currier may face charges from 8 to 20 years of imprisonment and a major fine.

The Moscow Times: Luzhkov Replaces Moscow Prefect http://www.themoscowtimes.com/news/article/luzhkov-replaces-moscow-prefect/388773.html

03 November 2009The Moscow Times

Mayor Yury Luzhkov has replaced the head of Moscow’s northwest administrative district with a United Russia loyalist, a City Hall source told RIA-Novosti on Monday.

Luzhkov replaced prefect Viktor Kozlov, who resigned in August, with Yelena Vasina, a former deputy prefect of the central administrative district and former head of the Basmanny district administration.

Vasina, born in Moscow, has worked in City Hall since 1978 and has been a municipal official since 1985, RIA-Novosti reported.

She also coordinated cooperation between United Russia and the authorities of Moscow’s central administrative district, the web site of the party’s district branch said.

Kozlov, 56, had occupied the prefect’s post since 1996 and worked in the city administration since 1981, RIA-Novosti said.

The Moscow Times: Former KGB Spy Kalmanovich Shot Dead http://www.themoscowtimes.com/news/article/former-kgb-spy-kalmanovich-shot-dead/388774.html

03 November 2009The Moscow Times

Businessman and former KGB spy Shabtai Kalmanovich was shot dead in central Moscow on Monday, investigators said.

Shots were fired at Kalmanovich’s Mercedes from a passing Lada Priora near 10 Novodevichy Proyezd at about 5 p.m., the Investigative Committee said in a statement.

Kalmanovich, 60, was shot more than 20 times and died at the scene, while his driver, Pyotr Tumanov, sustained grave injuries and was rushed to the hospital, it said.    

Lithuanian-born Kalmanovich immigrated to Israel in 1971 and worked for the Labor Party. He was jailed in 1988 on charges of spying for the KGB in exchange for being granted permission to immigrate to Israel.

Kalmanovich was pardoned for medical reasons in 1993 and moved to Russia, where he was the general director of the Tishinka joint-stock company and owner of the Moscow region Spartak women’s basketball team at the time of his death, Interfax reported.

He also was known for organizing concerts for celebrities like Michael Jackson and Tom Jones.

BBC: Ex-KGB spy gunned down in Moscowhttp://news.bbc.co.uk/2/hi/europe/8339290.stm

A Russian businessman who was convicted in Israel as a KGB spy has been shot dead in Moscow, police say.

Investigators said Shabattai Kalmanovich, 60, was killed by gunmen who fired at his Mercedes from a passing car, Russian media reported.

His driver was seriously wounded in the attack but tried to chase the killers, reports said.

Mr Kalmanovich was well known in Russia as a music concert promoter and as a basketball sponsor.

His killing appeared to have been "carefully planned", a police official was quoted by ITAR-Tass news agency as saying.

In televised remarks, Moscow Investigative Committee chief Anatoly Bagmet said the killing could have been related to Mr Kalmanovich's business affairs or have been driven by "personal revenge".

Jailed for spying

Mr Kalmanovich emigrated from the former Soviet Union to Israel in 1971 and in 1988 was jailed for spying for the KGB, media reports said.

He was released after serving five years and relocated to Sierra Leone, where he made a fortune in the diamonds trade.

He later returned to Russia where he ran a large shopping centre in Moscow and promoted concerts for stars including Michael Jackson and Liza Minnelli.

Mr Kalmanovich also sponsored basketball clubs and in 2008 became general manager of the Russian women's basketball team.

Telegraph.co.uk: Former Israeli double agent shot dead near Putin's office http://www.telegraph.co.uk/news/worldnews/europe/russia/6489381/Former-Israeli-double-agent-shot-dead-near-Putins-office.html

Shabtai Kalmanoivich, a former Israeli double agent who penetrated Golda Meir's government on behalf of the KGB, has been shot dead in Moscow.

By Andrew Osborn in Moscow and Adrian Blomfield in Jerusalem Published: 7:00AM GMT 03 Nov 2009

Kalmanovich, who later became a prominent businessman and allegedly had links with the Russian mafia, died after an unidentified gunman fired at least 20 shots into his chauffeur-driven Mercedes Benz. Mr Kalmanovich's driver was seriously wounded in the incident.

"Kalmanovich had practically no chance of surviving," a police official was quoted as saying by Russia's Interfax news agency. "He died on the spot from numerous gun wounds." A figure with a colourful if chequered past, Kalmanovich and his Jewish family immigrated to Israel from Lithuania in 1971.

After becoming an Israeli citizen, he joined the Israeli Labour Party, was appointed to a position in the government press office and became a mole for the KGB.

He later moved to the Knesset, the Israeli parliament, as an aide, and successfully forged close relations with several leading government figures, including the former prime minister Golda Meir.

According to the CIA, Kalmanovich was responsible for passing on to Moscow sensitive American intelligence that Israel had acquired from Jonathan Pollard, an American national now serving life in prison for spying for Israel.

Kalmanovich fled to Africa in the 1980s, becoming the proprietor of the only bus operating in Freetown, the capital of Sierra Leone – while continuing to spy for the KGB.

He was later extradited to Israel, where he served five years in prison before being handed back to the Russians in 1993 as part of an intelligence deal.

In Russia, Kalmanovich reinvented himself as an entrepreneur and man-about-town.

Quickly making a multi-million pound fortune, he brought Michael Jackson and Liza Minelli to Moscow to stage massively popular concerts.

He also became a patron of women's basketball and took over Spartak Moscow, one of the game's most successful teams. Spartak's female players were housed in a lavish lakeside villa outside Moscow that seemed more Playboy Mansion than training camp.

There were other controversies too, not least when his wife was allegedly involved in a relationship with one of Russia's most famous female pop stars.

"Even if they live together there is nothing terrible about it," he was quoted as saying. "Personally, I like to look at two beautiful women."

Russian police said there could be a link between the murder and Kalmanovich's ownership of the Spartak basketball club – which could suggest that the killing was mafia related.

Although Russia became synonymous with mafia-linked violence in the 1990s, the bloodshed dropped off significantly by the end of the decade.

Even so, contract killings have been reported on an increasingly frequent basis in recent years. There have been warnings of a fresh bout of mob warfare after Vyacheslav Ivankov, a Russian crime boss better known as Yaponchik, was shot and fatally wounded in July.

According to Russian media outlets, Kalmanovich was friendly with Yaponchik.

Axisglobe: Shabtay Kalmanovich, spy, businessman and sports manager, shot dead in central Moscow todayhttp://www.axisglobe.com/article.asp?article=1938

02.11.2009 The known Russian businessman, the president of basketball club Spartak, Shabtay Kalmanovich, was killed today by unknown gunmen in central Moscow, news agencies are reporting. Kalmanovich was the general director of open joint-stock company Tishinka.  It has appeared that the investigators have initially wrongly defined the site of the attempt on Kalmanovich. His Mercedes vehicle has undergone gunfire attack in the area of Krasnopresnenskaya Quay and the badly wounded driver has tried to pursue the murderers car, therefore the Mercedes has reached the area of Novodevichye Monastery, online paper NEWSru reports, referring to the Investigatory Committee of the Russian General Prosecutor’s Office. The driver somehow managed to drive almost three more kilometers up to Novodevichye Street, only there the vehicle has stopped: apparently, the driver began to lose conscience and the car has taxied on a lawn, Life.ru adds. The murder has been carefully planned, those were professionals who shot him, according to an informed source of the news agency ITAR-TASS from the law enforcement bodies. Most likely, the killers in advance knew about the route of Kalmanovich, having overtaken with the Mercedes, they opened continuous shooting at the vehicle’s windshield. Kalmanovich had practically no chances to survive and he died instantly from gunshot wounds at the site.  The Moscow directorate of the Investigative Committee of the Russian Federation has confirmed that the killed person was Shabtay Kalmanovich, news agency Interfax reports, referring to the the head of the Investigative Committee's Moscow branch Anatoly Bagmet. Kalmanovich died almost instantly from received wounds.

 According to preliminary data, 6-7 bullets of total of 23 shot have hit Kalmanovich, most of them embedded in businessman’s corpse, a source from the investigation is cited by online paper Life News. Experts consider that the killers have shot from the weapon made to individual order. “The killer’s weapon was specially ordered, most likely, it had a powerful core and a strong cartridge,” retired Major-General of the Russian Federal Protection Service (FSO), the former assistant to the President of the Russian Federation on security issues, Boris Ratnikov told Life News. “Such a weapon at first has been adjusted at proof ground. It is

evident that this has been a custom-made murder. It is visible that the victim has been long tracked down, his daily routes studied. Then the decision was made to commit this act in the very city centre of Moscow. All this impudence is pointing at professionalism and gravity of the task. These have not been simple amateurs”. The General made such conclusions, having learned that the attackers shot from two kinds of weapons and that converging fire has been shot, striking a small spot of 15 cm in diameter. Cartridge cases of 9 and 7.62 mm have been found at the site. Shabtay  Kalmanovich was born in 1947 in Kaunas, nowadays Lithuania, and repatriated himself in 1971 to Israel. His family, having submitted repeated requests on departure from the USSR since 1959, received the sanction after Shabtay’s recruitment by the KGB which had paid attention to him during the military service. Kalmanovich spent a year in the KGB special school. For instance, Suren Santuryan, the former US representative of the Soviet foreign trade company Soyuzplodoimport, currently an American businessman, has become Kalmanovich’s friend during the period of joint work with the First Main Directorate of the KGB. As Kalmanovich agreed to join the KGB as a sleeper agent in exchange for an immigration permit he received the task to deliver information on activity of the anti-Soviet organizations acting in Israel. He was employed in the Propaganda Centre under the office of Prime Minister Golda Meir.   AIA reported in one of reviews that Kalmanovich was one of the two young KGB emissaries who were sent for penetration into «the Israeli political system» together with an agent, Samaritan, the most high-ranking Soviet spy in Israel, Marcus Klingberg. He became the head of the Association of New Repatriants under the then ruling party Avoda. Kalmanovich also begun his business career holding concerts of Soviet artists in Israel. For years he handled some of Israel's sanctions-busting business with South Africa and acted as its representative in Sierra Leone; he was Bophuthatswana's "Ambassador to Israel," until Israel arrested Kalmanowitch as a Soviet agent.  A week after the sentencing of Jonathan Pollard, The Washington Times reported that the United States had identified Shabtay Kalmanovich as the Soviet spy in Israel who supposedly worked for the Mossad but was actually working for the KGB. There were suspicions that he had managed to transfer to the USSR a number of confidential military technologies developed in the USA and Israel. He had also reported to Moscow on particularies of activity of the Bureau of communications with Jews of the USSR and the Eastern Europe, Nativ. He was released from prison after serving several years of a nine year sentence for spying and left for Russia where he became a businessman.  In 1993-94, together with popular Russian/Jewish singer Joseph Kobzon he founded several firms in Russia. He has owned a tourism company in Moscow, has been the head of Liat-Nataly consortium and other companies. Kalmanovich was engaged in reconstruction of Moscow Tishinsky market and creation on its base of a modern trading complex. In 1994, he became the general director of the Tishinsky market.  According to Le Monde Renesegneman, in 1999, Shabtay Kalmanovich involved in bribery scandal with accusation of top Kazakhstan governmental officials receiving bribery from Tractebel through group and was one of the persons who have developed this provocation. According to some sources, Kalmanovich was amicable with "the father of Russian mafia" Vyacheslav Ivankov, nicknamed Yaponchik, NEWSru writes. This

criminal authority was shot several months ago in Moscow and recently was buried at Vagangovsky cemetery with unprecedented honours and security measures. Kalmanovich has been also known as a successful patron of art and a producer. He was a sponsor of several basketball clubs. Since recently he held a post of the president of women's basketball club Spartak; he was the general manager of Russia’s women's basketball team.  He was going to depart to Hungary for a business trip tomorrow, according to Sergei Chernov, Russian Basketball Federation head who spoke to Radio Ekho Moskvy. 

The Moscow Times: Red Tape Swells Despite Kremlin Vow http://www.themoscowtimes.com/news/article/red-tape-swells-despite-kremlin-vow/388777.html

03 November 2009By Nikolaus von Twickel

For being just a small strip of gray paper, a foreigner’s registration can become quite a bureaucratic nightmare — especially when you lose it.

This is what happened to Austrian businessman Alexander Schachner this summer. He left the country without handing in his registration. When he tried to re-register upon returning in August, his consultancy firm was fined 400,000 rubles ($13,700).

Apart from the hefty sum, Schachner said, the biggest hassle for him was the many hours he had to spend at police stations and with Federal Migration Service representatives.

“I was forced to fill out incredible amounts of paperwork. I sat with officers who seemed to have little understanding of what they were doing but said there was no way out for me. All for a tiny piece of missing paper. It was so bizarre,” he said in an interview last week.

Schachner challenged the fine with an official complaint, and the fine was waived after he received backing from the German Chamber of Commerce.

The registration hassle is just one facet of a bigger phenomenon felt by everyone in the country: Despite President Dmitry Medvedev’s latest pledges to fight for modernization, the country’s infamous bureaucracy continues to grow.

“This kind of modernization cannot take place in an economy overtaken by other processes, one that is infested with corruption and is ruled by an ineffective bureaucracy,” Medvedev told the St. Petersburg International Economic Forum on June 5.

“A research historian once wrote that even as far back as the 18th century, the Russian government bureaucracy grew at the same pace as society, swallowing the society as it

expanded. This is a well-known but highly unwanted scenario that must be avoided,” he said.

Schachner got off lucky. The Austrian had clearly violated a regulation that mandates employers to inform authorities whenever their foreign staff members leave the country for more than three working days.

The law, whose logic is not clear even to experts, was introduced back in 2007 and is causing an increasing number of headaches, especially to foreign employers.

“The rules are very strict, and there is no room to determine whether someone acted willfully or just negligently. Fines can be exorbitant for even small violations,” said Frank Schauff, CEO of the Association of European Business, a lobby group.

The registration rule was actually introduced to make life easier for expatriates by moving the obligation from landlords to employers, said Alexei Filippenkov, head of the Visa Delight agency, which helps companies navigate Russian bureaucracy. But at the same time, he said, the de-registration requirement was changed from visa expiry to every departure.

In another layer of red tape, an amendment to the law on limited liability companies required all such firms to re-register this summer. While the amendment’s rationale was to ease corporate acquisitions, its implementation resulted in long lines and angry company owners, who by law are required to present the registration personally in front of a tax inspector.

“And there is only one tax inspector for all of Moscow,” complained Ruslan Rajapov, owner of the Correa’s chain of cafes who was preparing to submit documents.

“I am planning to queue up outside the tax inspectorate at 4 a.m. in order to get that done in one day,” Rajapov said, speaking from his cell phone while waiting at a notary to get his paperwork ready.

He said he would have to repeat the process because the inspectorate accepts only one legal entity at a time and his company consists of more than one legal entity.

“This also creates a great opportunity to take bribes,” Rajapov said.

In a sign that bureaucratization is spreading in other areas as well, St. Petersburg State University decided last month that scientists seeking foreign grants or wishing to present or publish their work abroad needed to obtain permission from administrators.

After the decision was leaked on the Cogita.ru web site, worried scientists asked whether a new “iron curtain” would cut off the country’s academic community, already hit hard by the 1990s exodus of many of its brightest talent.

But the university denied that the decision would have any negative effect on international academic relations. Because the submissions will be done by deans, scientists’ work will not be affected, Igor Gorlinsky, a first vice rector of the university, said in e-mailed comments last week. Gorlinsky also said the university had simply clarified a rule that had been in place since 1999 and that conformed with federal law.

Yet spokespeople for both Moscow State University and the Russian Academy of Sciences told The Moscow Times that no comparable rule existed at either institution to their knowledge. “This would clearly result in worsening conditions for international research,” Moscow State University spokeswoman Olesya Bezler said.

Amid a growing media flap, St. Petersburg State University issued a statement Friday saying that the new rules would not apply to researchers in humanities and social sciences and only to those working with “dual-use technology,” nonmilitary techniques that could have military applications.

Not only higher educational facilities are affected. At least one school in central Moscow is being forced to close the building that housed its first graders for more than 15 years after city authorities suddenly found that it violated sanitary norms.

The school’s directorate was notified in early October that the building should be vacated by Nov. 5 because it lacked facilities to prepare food on the premises, said Eduard Greshnikov, the father of one of 22 students affected. He said the principal told worried parents that she decided to comply for fear of losing the building altogether.

“She said that sanitary inspections have increased recently and that she did not want to provoke a dispute with her superiors,” Greshnikov said, requesting not to name the school because of the principal’s worries.

David Fawkes, a British economist who headed an EU-funded administrative reform project in Russia until last year, said the state of bureaucracy has seemingly worsened and prospects were bleak for improvement because there is no longer any constituency for change.

“The government is unable or unwilling to do anything substantive. The Duma has ceased to play any material role, and the public is thoroughly disenchanted,” Fawkes said in e-mailed comments. “Arguably, the only reason there isn’t more public anger is that people never expected much to begin with and so are inured to disappointment.”

His words were echoed by Yury Korgunyuk, a researcher with the anti-corruption Indem think tank, who said the problem could only be tackled from bottom to top. “If the intelligentsia is barely discernible and society fails to protest, the problem will persist,” he said.

He said the path toward reforming bureaucracy from its present self-serving attitude to an efficient part of the state would be controls “from society, from parliament, a free press and independent courts.”

However, he said, this is unlikely to happen any time soon. “Our society does not feel the need for this. It feels no connection between its well being and the ills of a bureaucracy that behaves as it likes,” he said.

Meanwhile, Schachner, the Austrian businessman, faces a new problem. On Friday, he was forced to leave a plane that he had just boarded at Domodedovo Airport after having been caught with an undeclared 11,000 euros ($16,000) in cash at customs. By law, a person can carry up to $3,000 undeclared and $10,000 declared.

“You get the impression of total helplessness — every law is used against you, regardless of how nonsensical it is,” he told The Moscow Times after emerging from the airport police station where the entire sum was confiscated.

Russia Today: Brain drain continues to plague Russiahttp://russiatoday.com/Sci_Tech/2009-11-03/science-russia-career.html/print

03 November, 2009, 08:51

Home to many pioneers of science, Russia has always been a land of learning. But today that reputation is at risk, with a lack of opportunities at home forcing many of the best and brightest to look beyond the borders.

With science and innovation still on a shoestring budget in Russia, not many youngsters dream about a career in these fields.

A recent poll says about 70 percent of first year students in Russian universities are open to pursuing a career in science. But by the time they graduate, only two percent are willing to do this. What about the rest? Well, the majority – about one third – would like to work abroad, but not necessarily in the field of their degree.

While Maksim Odnobludov, director of the company Optogan, specializing in nanotechnology, has been lured back with a promise of state support, his story is an exception rather than the rule.

It’s been a while since Maksim last had the chance to stroll through his home town of St. Petersburg. A young scientist and successful businessman, he’s been dividing his time between Finland and Germany where his invention – special diode modules – has been put into production. But now he's ready to take his company back to where it all began.

“It was a business decision”, says Maksim. “We think the time is right, the market is ready and the conditions are good to expand our business in Russia”.

However the majority of young talents are dreaming about moving abroad. While stemming the brain drain has long been a policy goal in Russia, physicist Irina Arefyeva says very little is being done. For decades she’s been studying black holes and working as an academic advisor to young scientists. And she’s seen a lot of them gravitating across the ocean.

“Despite all the difficulties, the number of talented students stays the same,” says Irina. “But they have only two options to succeed. To stay in Russia and go into business. Or if they want to remain in science – they need to look for positions abroad”.

Andrei Bodrov is one of Irina’s most promising students. Now in his first PhD year, he’s already refused an offer to study in Germany. Yet, he says, moving abroad is just a matter of time.

“If you place any Russian scientist in Stanford or Harvard, he’ll get far more recognition for the same work. As somebody who wants to make a name for himself in physics, I need to be in a place where I’ll be noticed,” Andrei says.

A formula of success for an individual, but an unsolved problem for the country.

National Economic Trends

CommodityOnline: Russia reserve fund dips to $77.18 billionhttp://www.commodityonline.com/futures-trading/currency/Russia-reserve-fund-dips-to-$77.18-billion-3304-2.html

2009-11-03 13:19:46

Russia said its Reserve Fund decreased 2.4% to $77.18 billion, while the National Welfare Fund shrank 1.9% to $93.38 billion in October.

The Reserve Fund was set up to cushion the federal budget against a fall in oil prices, and the National Welfare Fund is intended to help the government carry out pension reforms.The Finance Ministry said it did not channel money from the Reserve Fund to balance the federal budget in October largely due to high oil prices, with Russia's Urals oil blend hitting a historic high of $72.5 per barrel for 2009.

As of October 1, the Finance Ministry channeled a total of $67 billion from the Reserve Fund to balance the federal budget, including $10.3 billion in September.

In line with budget policy guidelines for 2010-2012 approved by the government in July, a total of $95.5 billion, or 7.9% of the country's GDP, will be spent on covering the budget deficit this year.

Russia's Reserve Fund is expected to fall to $50 billion by the end of the year and run out entirely in 2010, while the National Welfare Fund will fall to $91 billion by the end of the year and down to $3 billion by the end of 2012.

RenCap: Federal budget deficit in October was financed from sources other than the Reserve Fundhttp://www.businessneweurope.eu/dispatch_text10337

Renaissance Capital, RussiaTuesday, November 3, 2009

Yesterday (2 Nov), the Ministry of Finance reported that the Reserve Fund rose to $77.2bn and the National Welfare Fund (NWF) was up to $93.4bn, fully reflecting the effects of revaluation as the dollar weakened against world currencies. While the rouble strengthened and, when calculated in roubles, the Reserve Fund even contracted to RUB2.242trn, while the NWF was down to RUB2.712trn. The data seem quite surprising as the ministry did not transfer any funds from the Reserve Fund in order to balance the federal budget. Certainly, this does not mean that the budget in October was balanced and we estimate that it could have significantly improved from September's RUB200bn. The contracted budget deficit was mostly financed via the domestic market, as gross OFZ placements (primary and additional) account for RUB65-70bn and return of deposits from commercial banks added RUB20bn. April through September the ministry transferred funds in advance in order to place them at commercial banks' deposits, while in October there was virtually no demand for these funds as banks were massively selling their FX positions. Budget expenditures are likely to continue coming at slow pace, as we do not expect collected revenues to have increased more than 10% in October (based on September data from the Ministry of Finance, we estimate that the budget deficit narrowed by RUB80bn).

With the oil price near $75/bbl and the current pace of budget implementation, we do not expect any significant monetary emission from the Reserve Fund through to the end of the year, as the year-end budget deficit may be financed easily by the return of deposits from commercial banks. In October, banks continued to be aggressive in their repayments of their Central Bank of Russia obligations (around RUB350bn), implying that budget emissions are already sterilised. Therefore, we do not see any inflation risks in the current fiscal policy, at least until the start of next year even if budget expenditures experience a one-off increase in December.

Anton Nikitin

RBC: Bank of Russia tightens controls on bankshttp://top.rbc.ru/english/index.shtml?/news/english/2009/11/02/02135459_bod.shtml

Last week saw a whole string of tough statements from regulators. The Bank of Russia, for one, is set to implement special controls over banks and is already busy revoking licenses. The bank’s complete list of suspects includes 250 Russian lending agencies.

Banks will no longer be able to attract personal deposits and violate the obligatory requirements without serious repercussions, even in spite of late September’s ban on expulsions from the deposit insurance system for such violations. The special controls will be applied to banks whose financial indicators are short of the requirements that would permit them to participate in the deposit insurance system. According to First Deputy Chairman of the Central Bank Gennady Melikyan, the 250 lending agencies are being watched not only by the bank’s regional branches, but also by its central office. And even if a regional branch turns a blind eye on the obvious problems such banks are facing, the central office will undoubtedly gauge them with precision, Rossiyzkaya Gazeta wrote. RBC Daily, in turn, reported that the Bank of Russia will be especially strict with those banks still attracting personal deposits at rates of above 15 percent per annum. “We suspect that such banks have no intention of returning the money to their depositors,” Melikyan stated, adding that when necessary, the bank will have no scruples about revoking licenses even from the banks that had been collecting a large number of deposits. On Friday, the Bank of Russia revoked licenses from two banks, Universal (Sverdlovsk region) and Senator (Moscow), for irregular accounting and breach of federal laws. The problems in the banking sector are far wider than that, however. Banks have cornered themselves by taking on commitments to pay out 18-20 percent on deposits for two or three years, and they are now struggling to solve their liquidity problems. With some banks, deposits reach up to 70 percent of their total liabilities, as banks hope that in this case the Bank of Russia will not dare revoke their licenses.

Business, Energy or Environmental regulations or discussions

Bloomberg: AvtoVAZ, Center Telecom, Gazprom: Russian Equity Market Preview http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVQ267evaLkQ

By Paul Abelsky

Nov. 3 (Bloomberg) -- The following may be active in Russian trading. Stocks symbols are in parentheses and share prices are from the previous close.

The 30-stock Micex Index added 2.4 percent to 1,266.30 in Moscow.

OAO AvtoVAZ (AVAZ RX): Russia’s biggest carmaker wants the government to finance surplus jobs until the company completes a gradual reduction of its 91,000-strong workforce, board member Christian Esteve said. Negotiations with Russian authorities and 25 percent-shareholder Renault SA are likely to continue well into next year, he said. AvtoVAZ lost 1.6 percent to 14.503 rubles.

OAO Center Telecom (CTLK RX): The dominant fixed-line phone provider in central Russia had its credit rating raised to BB-, three levels below investment grade, from B+ at Standard & Poor’s, which cited the strengthening of the company’s “financial profile, especially the liquidity position.” Center Telecom added 1.1 percent to 14.25 rubles.

OAO Gazprom (GAZP RX): Russian Prime Minister Vladimir Putin said the European Union should lend Ukraine at least $1 billion to ensure uninterrupted flows of natural gas. Russia, which supplies a quarter of Europe’s gas, has cut supplies to Ukraine twice in the last four years over financial disputes, leading to supply disruptions across the continent.

Gazprom, Russia’s gas-export monopoly, gained 3 percent to 181.01 rubles.

To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net.

Last Updated: November 3, 2009 00:00 EST

Reuters: Russian markets -- Factors to Watch on Nov 3http://www.iii.co.uk/news/?type=afxnews&articleid=7606142&subject=markets&action=article

MOSCOW, Nov 3 (Reuters) - Here are events and news stories that could move Russian markets on Tuesday.

You can reach us on: +7 495 775 1242

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

Olma: Today we don't expect big movements in the RTS index ... The material revision of asset portfolios is unlikely before Nov. 4 (a Russian national holiday).

OTP Bank: The domestic market is at a crossroads, and neither strong growth nor weakening should be expected in the near future. We expect the Russian market to open at the levels of the previous trading session.

EVENTS (All times GMT):

MOSCOW - Russian President Dmitry Medvedev to meet Emergencies Ministry chief

MOSCOW - Deputy Foreign Minister Alexei Borodavkin holds news conference

IN THE PAPERS:

US-based industrial group Access Industries, controlled by Soviet-born tycoon Len Blavatnik, has acquired Mel Gibson and Bruce Davey's cinema distribution business Icon Group, which owns the rights to films including Oscar-winning Dances With Wolves, Vedomosti business daily reports.

Hungary's government has reached a preliminary agreement with Russia's Vneshekonombank on purchasing part of the bank's 49 percent in the national airline Malev, Kommersant business daily reports.

TOP STORIES IN RUSSIA AND THE CIS: TOP NEWS: Putin sees climate deal, but with conditions Russia's oil output reaches new post-Soviet high Putin says Berlin Wall's fall was inevitable Former spy shot dead near Putin's Moscow office

COMPANIES/MARKETS: Vimpelcom to pay dividend as confidence picks up Russian Railways mulls 200 bln rbls bonds in 2010 TNK-BP Holding to pay 9-mo divs at 7.41 rbls/shr

ECONOMY/POLITICS: Poll ratings of Russia's Putin, Medvedev tumble Putin calls on EU to lend Ukraine money for gas Russia gold output up 14.6 pct in Jan-Sept Russia may cut 2010 issuance plans-deputy finmin Russia's rebound will be surprisingly strong

ENERGY: Gazprom, Eni back EDF joining South Stream

COMMODITIES: RUSAL in 1.68 mln T China aluminium supply deal

MARKETS CLOSE/LATEST:

RTS 1,348.89 -0.60 pctMSCI Russia 770.50 +2.37 pctMSCI Emerging Markets 907.60 -0.39 pct

Russia 30-year Eurobond yield: 5.845/5.731 pct

EMBI+ Russia 245 basis points over

Rouble/dollar 29.2600

Rouble/euro 43.1600

NYMEX crude $78.05 -$0.08ICE Brent crude $76.52 -$0.03

For Russian company news, double click on

Treasury news Corporate debtRussian stocks Russia country guideAll Russian news Scrolling stocks news

Emerging markets top news

Top deals European companies

Keywords: RUSSIA FACTORS/ (vladimir.soldatkin@reuters.com; +7 495 775 1242; Reuters Messaging: vladimir.soldatkin.reuters.com@reuters.net)

Bloomberg: Gazprom, Lukoil, Novatek Upgraded to ‘Overweight’ at HSBChttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aifgaPO3unRE

By Stephen Kirkland

Nov. 3 (Bloomberg) -- OAO Gasprom, the world’s biggest natural gas producer, OAO Lukoil and OAO Novatek were upgraded to “overweight” from “neutral” at HSBC Holdings Plc, which raised its price estimate on the Russian energy stocks citing a lower equity risk premium.

“The recent market sell-off triggered by the correction in the oil price creates a good buying opportunity,” Anisa Redman, a London-based analyst at HSBC, wrote in a report today.

Gazprom’s price estimate was increased to $32 from $25 and Lukoil’s projection was raised to $84 from $63. Novatek had its estimate lifted to $65 from $50 by HSBC.

OAO Rosneft, Russia’s largest oil producer, had its estimate increased to $12 from $9.50 at the bank, which has an “overweight” recommendation on the stock.

Last Updated: November 3, 2009 01:35 EST

RenCap: Deripaska offers to repair RusHydro plant in return for cheap powerhttp://www.businessneweurope.eu/dispatch_text10337

Renaissance Capital, RussiaTuesday, November 3, 2009

Event: RUSAL owner Oleg Deripaska has written to Minister of Energy Sergey Shmatko offering to finance the repairs at the Mainskaya hydro plant, which would increase output at the plant from its current 220 MW to the design capacity of 321 MW. Mainskaya is located 21 km downstream of the now out-of-commission Sayano-Shushenskaya plant and Mainskaya's main customers are RUSAL's Sayansk and Khakasia smelters. According to a Vedomosti report, Deripaska has offered to spend around $10mn on the repairs and, in return, expects the additional output from Maiskaya to be sold to RUSAL under a long-term contract with the electricity priced "at-cost".

Action: Negative for RusHydro, in our view Rationale: Reading Deripaska's letter, we are once again confronted by a balance of interests that seems to allow Russian industrialists to run hugely profitable businesses on the basis of very cheap electricity from RusHydro,

while RusHydro is so unprofitable that it apparently cannot afford to pay for urgent repairs to its generation plants. It is early days yet to take a view on whether Deripaska's proposal will prevail. However, we think the very fact of the letter suggests that this balance is unlikely to change soon.

Vladimir Sklyar

RBC: Banks reduce overdue debts in September

http://www.rbcnews.com/free/20091103112146.shtml

      RBC, 03.11.2009, Moscow 11:21:46.Russia's lending agencies have brought down the level of their overdue debts by 1 percent from August, to RUB 962bn (approx. USD 32.96bn), RBC Daily wrote today citing the Bank of Russia's September banking sector survey. According to the Bank, this was the first drop since the start of the year, which released some cash from banks' reserves and boosted their earnings.

      In September, reserves expanded 3.9 percent, down from 6.1 percent in August, and from 6.9 percent in July. Reserves made up 8 percent of all loans. Assets shrank 0.5 percent to RUB 28.18 trillion (approx. USD 965.4bn), ending a three-month rising streak. The fall was largely prompted by a contraction in credits and other loans by RUB 210.2bn (approx. USD 7.2bn) to 20.215 trillion (approx. USD 692.5bn).

Reuters: RLPC-Russia's MDM signs increased $250 mln loanhttp://www.forbes.com/feeds/afx/2009/11/03/afx7076793.html

11.03.09, 04:17 AM EST

LONDON, Nov 3 (Reuters) - Russian bank MDM announced on Tuesday it has signed a $250 million, one-year loan, which is the first syndicated loan for a Russian bank this year.

The deal was increased from $175 million after an oversubscription, as reported by Reuters Loan Pricing Corp last month.

A total of 16 banks from 10 countries joined the loan.

MDM announced the loan in August, saying the deal pays a margin of 400 bps over LIBOR/EURIBOR.

The deal involves the participation of the International Finance Corp (IFC), an arm of the World Bank.

The IFC provided a $35 million, four-year term A loan in July 2008 -- which remains in place -- while the new $250 million B loan replaces the one-year $500 million loan that matured in July.

Bookrunners for the syndicated B loan are Calyon, ING ( ING - news - people ), RZB, Standard Chartered ( SCBEF.PK - news - people ) Bank and VTB Bank (Deutschland).

Mandated lead arrangers are Erste, State Bank of India and WestLB, while arrangers are AKA Ausfuhrkredit, Citibank, OCBC Bank and Wachovia Bank. Co-arrangers are Atlantic Forfaitierungs, Banque de Commerce et de Placements, London Forfaiting Company and UBS ( UBS - news - people ).

Funds from the loan will be used to support trade financing or other trade-related projects of the bank's clients, MDM said.

Three tickets were on offer to banks in syndication, with lenders invited to commit $15 million/10 million euros, $10 million/7 million euros, or $5 million/3.5 million euros for all-in pricing of 600 bps, 580 bps and 560 bps, respectively, a banker told Reuters LPC in September.

Lenders were invited to commit in euros as well as dollars, since for some banks it was cheaper to fund than dollars.

(Reporting by Christopher Mangham; editing by Simon Jessop) Keywords: MDM/LOAN

(christopher.mangham@reuters.com; +44 20 7542 3582; Reuters Messaging: christopher.mangham.reuters.com@reuters.net)

Alibaba.com: Nov. Russia government may raise scrap export dutyhttp://news.alibaba.com/article/detail/metalworking/100194089-1-nov.-russia-government-may-raise.html

Published: 02 Nov 2009 23:55:59 PST

Nov. 3 MetalBiz--In the international Recycling Bureau holding in Amsterdam, suppliers stated that in November, Russia government probably adjusts up scrap steel export duty.

It is said that from November of 2010, Russia's scrap steel export tax will increase by 4 times, not to be confirmed. Although it is not determined that theses measures will be implemented, but the obvious point is that Russia government regularly releases some steps to restrict export, nevertheless, the domestic market demand is seasonal, and stainless scrap steel suppliers depend on the exports to large degree.

RBC: NLMK to float exchange bonds

http://www.rbcnews.com/free/20091103105503.shtml

      RBC, 03.11.2009, Moscow 10:55:03.Novolipetsk Steel (NLMK) is set to launch a flotation of series 05 exchange bonds worth RUB 10bn (approx. USD 343m). The first coupon rate has been set at 10.75 percent per annum, with the amount of interest to be paid for one exchange bond at RUB 53.6 (approx. USD 1.84) for the coupon period.

      NLMK opened the bid book on October 21 and closed it on October 30. The Russian rolled steel producer will place 10m exchange bonds with a par value of RUB 1,000 (approx. USD 34.26) each. The offering price is 100 percent of the nominal value, and the bonds will mature on the 1092nd day from the flotation.

Interfax: Highland Gold could grow Mnogovershinnoye reserves by 190,000 ozhttp://www.interfax.com/3/527289/news.aspx

MOSCOW. Nov 3 (Interfax) - Highland Gold Mining plc (HGM) couldincrease reserves at its Mnogovershinnoye (MNV) field in Russia'sKhabarovsk territory by 190,000 oz as the result of further exploration. HGM said it had been exploring the Valunistoye property, just tothe north of MNV, and found that it contains a probable 190,000 oz withaverage ore grading of 3-5 g/t for Au, which is double the initialforecast. The company expects to be able to integrate Valunistoye with theMNV operation before long. Exploration will continue in 2010.

Sharecast: Highland Gold regains lusterhttp://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=3100026

Tue 03 Nov 2009

LONDON (SHARECAST) - The share price of Highland Gold has been flagging of late but it recovered its momentum on Tuesday after the Russian gold miner announced positive exploration results from its Mnogovershinnoye (MNV) and Lyubov properties.

The company said further exploration at Valunistoye, just north of its MNV field in Russia's Khabarovsk territory, indicates potential reserves of 190,000 ounces of shallow, open-pit mineable ore grading between 3.0-5.0 grams per tonne.

The new estimate is more than double the originally defined gold reserves for Valunistoye.

At Lyubov, positive intermediate results have been received from metallurgical test work on a 320 kilogram composite sample of primary ore taken from the Evgraf target.

The results ‘corroborate the positive metallurgical properties for the Evgraf ore which also yielded gold recoveries in excess of 80% utilising gravitational enrichment during previous test work,’ the company said.

An in-house resource estimate puts the resource potential of the Evgraft target at 1.6m ounces of gold at an average grade of 1.7 grams per ton, and a cut-off grade of 0.75 grams per ton.

‘We are very pleased with the good drilling results at MNV. This underlines that this deposit still holds significant exploration potential which we are determined to fully exploit and turn into value,’ said Valery Oif, chief executive of Highland Gold.

‘The metallurgical test work at the Lyubov deposit continues to yield positive results and opens up a number of options for a low cost operation,’ Oif added.

The Moscow Times: Gold Production Rises on Project Launches http://www.themoscowtimes.com/business/article/gold-production-rises-on-project-launches/388757.html

03 November 2009Reuters

Gold production rose 14.6 percent year on year in the first nine months of 2009, mainly because of the launch of some large projects in the Far East, the Russian Gold Industrialists Union said Monday.

The union, the industry’s lobby group, said in a statement that gold output totaled 151.3 tons in January to September compared with 132 tons in the same period a year ago.

September output from mines and placers declined by nearly 2 tons from the same month a year ago, but a rise of volumes refined as a byproduct of other metals cut the decline to just 0.4 tons.

Output of gold produced as a byproduct of other metals rose 45.2 percent to 13.34 tons in the first nine months of this year, and output achieved by refining gold from scrap declined by 3 percent to 5.31 tons.

Russia produced about 8 percent of the world’s gold last year and plans to significantly increase this share by developing its reserves that are second only to South Africa’s.

It aims to produce 205 tons of gold this year, up 11.1 percent year on year.

The union attributed the latest increase to the launch of production at Kinross Gold’s Kupol mine in the remote Chukotka region, as well as the Karalveyem mine in the same region.

Bne: Hungarian-Russian talks on Malev to conclude in weeks http://www.businessneweurope.eu/dispatch_text10330bneNovember 2, 2009

Hungarian-Russian talks on flag carrier Malev airlines will be concluded within weeks, the Finance Ministry told MTI, Hungary AM reported. Finance Minister Peter Oszko held talks in Moscow with Russian First Deputy Prime Minister Viktor Zubkov last Thursday on how to resolve the airline's situation, and the talks now continue on experts' level. Oszko was sent to Moscow to help the Russian shareholders to find an outcome which did not endanger Malev's existence, which - and the successful operation of the company - is of strategic importance to Hungary, Prime Minister Gordon Bajnai told journalists in Brussels. No resolution was adopted on the settlement of Malev's capital position at a shareholders' meeting of the Hungarian airline on Thursday as no proposal was submitted by the board of directors, Malev told MTI after the general meeting. Russian state-owned bank Vnesheconombank (VEB) holds a 49% stake in Malev parent company AirBridge. VEB acquired the stake - according to unconfirmed press reports - after its owner, Russian airline tycoon Boris Abramovich, defaulted on a loan from the bank. AirBridge's other, 51%, owner is a Hungarian private individual. Airbridge holds 99.95% of Malév.

The Moscow Times: Moscow Office Rentals In Q3 Hit 1-Year High http://www.themoscowtimes.com/business/article/moscow-office-rentals-in-q3-hit-1-year-high/388749.html

03 November 2009Vedomosti

The office rental market in Moscow is beginning to pick up, with landlords renting more than 420,000 square meters of space in the third quarter, more than in the same period a year earlier, when the economic crisis was only first hitting Russia.

CB Richard Ellis, which reported the figure, said it was the highest result in a year. In the first quarter of 2009, 266,000 square meters of office space were rented, while the figure was 328,000 square meters in the second quarter. The figure even slightly tops rentals for the third quarter of 2008, when deals were signed for 415,000 square meters.

Thanks to heavy competition, property owners are making serious concessions on rental rates and terms, said Irina Frolova, head of CBRE’s analysis department. According to the company’s data, about 2 million square meters of office space in Moscow is currently empty.

Since the start of the crisis, rental rates in Moscow have fallen by about 60 percent, with Class A offices available for an average of $600 per square meter, and Class B space going for $350 to $400.

Olga Yasko, regional director of the analysis department at Colliers International, said she saw things picking up in the second quarter, as rental terms improved for tenants and property owners offered space that had already been remodeled.

Class A office space is now available for rent at the precrisis prices for Class C offices, said Lada Belaichuk, deputy head of the analysis department at Cushman & Wakefield Stiles & Riabokobylko.

According to CBRE data, the biggest office rental agreement inside the Third Ring Road last quarter was for Aeroflot, which rented 6,900 square meters in the Midland Plaza business center. Second place was shared by the RTS stock exchange and the Aton brokerage, which each rented 5,000 square meters — in the Mokhovaya business center and the Central City Tower, respectively.

Reuters: BRIEF-N.Renkaat sees slow Russian tyre mkt recoveryhttp://uk.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUKHEL00938320091103

Tue Nov 3, 2009 6:46am GMT

HELSINKI, Nov 3 (Reuters) - Finnish car tyre maker Nokian Renkaat (NRE1V.HE: Quote, Profile, Research) said in presentation slides on Tuesday:

* Aims to further strengthen its market leader position in Russia

* Recovery in Russian car mkt seen starting in 2010, gaining momentum 2011-2012

* Says Russia tyre mkt needs 3 yrs to fully recover from crisis

(Reporting by Brett Young)

NOVEMBER 3, 2009, 4:10 A.M. ET

WSJ: Russian Trust Svc Backs Down On Daimler/Kamaz Comment - Report http://online.wsj.com/article/BT-CO-20091103-702912.html

MOSCOW (Dow Jones)--Russia's Federal Anti-Monopoly Service backed down from an earlier comment suggesting that Germany automaker Daimler AG (DAI) had applied for permission to increase its stake in truck maker OAO Kamaz (KMAZ.RS), Vedomosti daily reported Tuesday.

Interfax news agency Friday cited the agency's head Igor Artemev as saying that Daimler has applied to increase its stake in Kamaz by 5%, sparking a 28% surge in the Russian truck maker's stock price.

However, a spokeswoman for the service told Vedomosti that Artemev had in mind a different joint venture between the two companies.

The antimonopoly service had already released a statement announcing the approval of that deal.

A spokeswoman for the service was unavailable for comment.

Daimler, the world's largest truck maker by sales, acquired a 10% stake in Kamaz in December last year as part of a wider push to increase its footprint in emerging markets.

-By Will Bland, Dow Jones Newswires; +7 495 937 8445; william.bland@dowjones.com

NOVEMBER 3, 2009

WSJ: Renault Offers Avtovaz Know-How but No Cash http://online.wsj.com/article/SB10001424052748703932904574511373024617520.html?mod=googlenews_wsj

By DAVID PEARSON

PARIS— Renault SA is prepared to provide its Russian partner OAO Avtovaz with its technology and know-how but has told Russian authorities it isn't willing to inject cash into the country's leading car maker, a senior Renault executive said Monday.

Christian Esteve, head of Renault's Russian operations, told journalists the two companies on Nov. 10 will present the Russian authorities with their latest proposals for Avtovaz's survival by revamping its business plan and reinforcing its core vehicle-making business. Renault bought a 25% interest in Avtovaz in early 2008.

Avtovaz, which is struggling to survive, is seeking massive injections of cash from its main shareholders, which include the Russian state, Russian holding company Russian Technologies and Russian investment bank Troika Dialog.

Mr. Esteve, who took over as head of Renault's Russian operations this year, said he has never considered that he had been given an ultimatum by Prime Minister Vladimir Putin to help Avtovaz financially. Mr. Putin in September said Renault could have its 25% stake in Avtovaz diluted if it doesn't contribute to the bailout.

Mr. Esteve declined to put a value on Renault's contribution to the Avtovaz rescue plan. Negotiations on how Renault will make a contribution that allows it to preserve its 25% shareholding will continue in the coming months, Mr. Esteve said. A debt for equity swap is one possibility.

A proposal being studied is to create a common vehicle platform—the parts of a car not visible from the outside—which will be used to make new vehicles at Avtovaz's plant in Togliatti, Russia, for the brands of Renault, Avtovaz and Renault's alliance partner, Nissan Motor Co., he said.

This plan would mean additional production of 300,000 vehicles annually at the sprawling facility and part of Renault's contribution would be to re-equip the production line. That could involve providing already-amortized tooling from other Renault plants, as the French company has done successfully with its Romanian subsidiary, Dacia.

Avtovaz's original agreement with Renault calls for the Russian company to make two vehicles based on the platform used for the Renault/Dacia Logan low-budget Logan. If adopted, the new plan would involve Renault making two new models and Nissan making one vehicle based on the same platform, Mr. Esteve said.

Mr. Esteve said negotiations with all Avtovaz's stakeholders, including local and national authorities, are likely to drag on for several months before a final deal can be struck. "In my experience, negotiations like these could take until next summer," he said.

A major hurdle for Avtovaz's return to profitability is the massive job cuts that are required to lower its fixed costs. Mr. Esteve said Avtovaz is under pressure to spread the cuts over a long period, some are suggesting 18 months, to make the downsizing as painless as possible.

Renault's involvement in Avtovaz is a long-term affair, Mr. Esteve said, adding that the Russian automobile market will eventually recover to sell three million vehicles annually or more, after slumping more than 50% this year.

Write to David Pearson at david.pearson@dowjones.com

Bne: Russian supermarket chains - seats reserved at the top tablehttp://www.businessneweurope.eu/storyf1850/Russian_supermarket_chains__seats_reserved_at_the_top_table

Tim Gosling in Moscow November 3, 2009

The fourth quarter is illustrating a vast discrepancy in fortunes for operators in Russia's supermarket business, with Carrefour slinking away with its tail between its legs but X5

receiving approval for its latest acquisition. The sector's winners from the crisis look an easy bet, with little room now left for a new entrant to get its feet under the table.

French retail giant Carrefour opened the doors of its first Russian outlet just four months or so before it announced in October that it's to beat a hasty retreat, with rumours rife that minority shareholders are pushing the world's second-largest retailer to offload its emerging market assets. It was the 35-year presence in Brazil and 15 years of Chinese operations most often mentioned in the press, despite reports in the summer that Carrefour CEO Lars Olofsson believed all four so-called "BRIC" markets to be "priorities."

Predictably, the company denies the Russian exit was provoked by activist shareholders, blaming instead a lack of growth and acquisition opportunities. Although the fates of its Latin American and Asian businesses will reveal the veracity of that, analysts in Moscow certainly believe Carrefour has realised that the crisis has sunk its hope of entering the top three in terms of market share, citing a list of obstacles, including acquisition prices, logistics, real estate and the potential introduction of more stringent anti-monopoly legislation.

The retreating French company is not the only one to have struggled in the face of dwindling consumer spending over the last year or so. The likes of Ramstor and Sedmoi Kontinent have lost large amounts of market share on the back of inefficiency and over-leveraged positions as the boom turned to bust. Already marooned in a higher-priced supermarket segment hit hard by falling consumer income, Sedmoi Kontinent's lack of logistics network has also been key in driving customers to competitors with whom it can never hope to compete price-wise as long as it has to ask suppliers to deliver to each store, says Natasha Zagvozdina of Renaissance Capital. The company's stability is now a question given that like-for-like revenue growth is now below inflation, she warns.

For the market leaders, however, the crisis has proved "positive, because the cull has been at the expense of the most inefficient players – and they have been responsible in the past for inflation of lease-rates, wages and, therefore, the market overall," argues Marat Ibragimov of Citigroup Global Markets. The top four in terms of market share (X5, Magnit, Metro and Auchan) have all gained at the expense of weaker competitors, thanks to the efficient operation of discounter and hypermarket networks as January-September retail trade turnover shrank 5.3% on year.

With macroeconomic figures now hinting at recovery (trading down on the part of customers is essentially over, according to Ibragimov, who says "the consumer confidence index suggests we'll start seeing a larger spend on durables and higher priced products"), the biggest players appear entrenched for the medium term, and are starting to plot their next steps to grab a greater share of the Russian consumer's pocket.

Chasing growth

It's a prize worth having. Despite capturing business from outdoor markets and the like

over the last year, modern retailers still enjoy less than a 40% share of food sales across Russia, according to Zagrozdina. "The consolidation opportunity in Russia is absolutely huge," she states, a view backed by the claim of Lev Khasis, CEO of X5, that over the next decade his company hopes to double revenue every three years.

The likes of X5 and Magnit now appear ready and willing to chase that growth from positions of strength. Rising like-for-like sales in the first nine months of this year (X5 with 11% and Magnit with 7%, versus just 3% for Sedmoi Kontinent) coupled with continued improvements in efficiency, offer them the financial strength and stability to access funds to develop. As Zagrozdina points out, X5 has several open credit lines available, while Magnit closed a successful secondary share offering at the end of October to raise $365m via the sale of 5.6m shares at a 5% premium to the market.

Both now intend to use this financial muscle to expand their operations and continue the efficiency drive. Magnit aims to build 30 new hypermarkets and up to 400 convenience stores, according to Victoria Sokolova at Troika Dialog. Meanwhile, X5 received approval from the anti-monopoly commission in late October to buy Paterson and its 77 supermarkets in Moscow and St Petersburg, and "expects to significantly increase the number of discounter openings in 2010," according to Alfa Bank's Elena Mills.

The collapse of the real estate market will chronically limit the availability of new space for operators, and thus acquisitions offer added value to expanding operators. Magnit is building its own projects, while X5 will depend on its size and strong relationships to find leased space. This will reserve capital for investment aimed at increasing competitive advantage behind the scenes that is likely to prove key to ensuring the top players continue to lead the market – for the medium term at least.

On top of its expansion programme, Magnit is expected to plough the proceeds of its share issue into two new distribution centres and its truck fleet. X5, meanwhile, plans to transform its IT systems, as well as boosting distribution centralization - from the current 59% to 84% - by 2013, to shave off as much as 150 basis points in operating costs as a percentage of sales. It will then pass these savings onto customers, management has said. Zagrozdina suggests this is exactly the right strategy: "Over the years, the top companies have been working very hard on operational efficiency, labour productivity, real estate structure, and [return on investment] – especially in the environment of rising cost of capital." she says. "Across the next three to five years, those with the strongest distribution and supply chains will come out on top."

With the sheer scale of Russia and absence of experienced third-party logistics operators operating there, the supply chain and distribution conundrum is also a key element in the failure of the biggest international operators such as Carrefour or Wal Mart to penetrate this huge market. Remember the French group's activist investors? Try convincing them to live with at least five years of losses while you build your own networks; assuming of course that there was any real estate infrastructure to build them upon.

This is why, realistically, the only challenge the top table has to worry about from global

big hitters is via M&A. Not that this avenue is straightforward. The four (two operating) Carrefour assets now up for grabs are simply not a large enough footprint, while although private equity firm TPG has captured a blocking stake in the Lenta chain, other shareholders have stated they're not ready to divest their interest, leaving it unattractive to strategic investors. That leaves three potential targets with the size and level of development necessary, according to Zagrozdina: Dixy – should it manage to build its supply chain, Magnit and X5.

However, there's another very good reason that a major acquisition from abroad is yet to be seen in the Russian grocery sector: price. X5's market capitalization stands at around $7bn; the company holds 4% of the food retail market. That's a tough sell, especially if Zagrozdina is correct in suggesting that any buyer would struggle to improve efficiency at either. "Not only have they been working hard on rationalizing the businesses, but they also recognize the peculiarities and opportunities of working in Russia."

Activity in the Oil and Gas sector (including regulatory)

Gazeta.kz: Caspian pipeline consortium in January - October, 2009 increased oil export by 11.6 %http://eng.gazeta.kz/art.asp?aid=139461

14:28 03.11.2009 text: "Kazakhstan Today"

The Caspian Pipeline Consortium (CPC) in January - October, 2009 increased export of oil from the terminal Southern Ozereyka-2 by 11.6 % in comparison with the similar period of the last year, Kazakhstan Today agency reports citing CPC.

According to the company, 28 million 740.415 thousand tons of oil as compared to 25 million 749.529 thousand tons during the similar period of 2008 have been transported for export through CPC system in port Novorossisk in January - October, 2009.

2 million 940.853 thousand tons of oil was transported in October, 2009 that is by 2.8 % more than in October, 2008 (2 million 861.826 thousand tons).

Steel Guru: Russia oil export to non CIS in 10 months up by 3pct YoYhttp://steelguru.com/news/index/2009/11/03/MTE4Njk5/Russia_oil_export_to_non_CIS_in_10_months_up_by_3pct_YoY.html

Tuesday, 03 Nov 2009

Interfax quoted the Fuel and Energy Central Dispatch Service said Russia raised oil exports to non-CIS countries 3.4%YoY in January to October 2009 to 176.129 million tonnes.

Transneft, the national pipeline operator pumped 154.706 million tonnes of Russian crude to non-CIS countries in the 10 months. Exports bypassing Transneft totaled about

21.423 million tonnes.

In October alone, Transneft pumped 15.699 million tonnes of Russian crude to non-CIS countries while exports bypassing the monopoly amounted to 2.128 million tonnes.

Transneft shipments through the port of Novorossiisk including transit came to 36.875 million tonnes in the 10 months, including 3.354 million tonnes in October, shipments through Tuapse 3.499 million tonnes, through Odesa 2.320 million tonnes, through Primorsk 62.288 million tonnes and through Yuzhny 7.853 million tonnes.

Rosneft exported 39.961 million tonnes of oil to the non-CIS using Transneft pipelines in the 10 months, Lukoil 20.807 million tonnes, Surgutneftegas 23.170 million tonnes, TNK-BP Holding 28.433 million tonnes, Gazprom Neft 12.187 million tonnes and Tatneft 13.008 million tonnes.

Companies that are not part of vertically integrated oil companies shipped 7.236 million tonnes of oil abroad via Transneft in the 10 months including 769,000 tonnes in October.

Transit of oil from Kazakhstan totaled 17.812 million tonnes in the period and the transit of Azerbaijani oil to 2.102 million tonnes.

Russian oil exports to the CIS declined 2.3% to 27.761 million tonnes in January to October 2009. Exports to Belarus and Ukraine rose 1.8% to 17.818 million tonnes and 4.1% to 5.164 million tonnes, respectively but deliveries to Kazakhstan were down by 19.5% to 4.779 million tonnes.

(Sourced from Interfax)

Bne: Russian oil companies may be force to sell 10% of production via new exchangehttp://www.businessneweurope.eu/dispatch_text10337

bneNovember 3, 2009

As part of plans to set up a domestic oil exchange the Russian Economic Development Ministry says it may pass laws to force oil companies to sell at least a tenth of their production via a new exchange.

The rule maybe applied administratively even before the laws are passed, according to reports. The Kremlin is keen to set up an commodities exchange as part of their plans to develop Russia's financial system.

Experts believe that under current conditions the pricing on Russian oil exchange would be neither market rates nor transparent. The other problem is for prices to affect the market sentiment you need a large number of players, whereas in Russia the state-owned

companies Rosneft and Gazprom Neft would have a lot of monopolistic power and so able to manipulate prices as wil.

However, the government will push ahead as much for the power the exchange will give them to regulate the market: the Federal Antimonopoly Service is keen to see an exchange as it needs the base prices on the domestic market as a benchmark in its work regulating price abuse on the domestic market.

Steel Guru: Watchdog in Rosneft and Gazprom feudhttp://steelguru.com/news/index/2009/11/03/MTE4Njk2/Watchdog_in_Rosneft_and_Gazprom_feud.html

Tuesday, 03 Nov 2009

The Moscow Times quoted Federal Anti-Monopoly Service said that it would get involved in a feud between Rosneft and Gazprom over access to the gas giant’s pipeline network.

The watchdog opened a case after Rosneft filed a complaint alleging that Gazprom limited Rosneft access to the country’s main gas pipeline network from April to August. Because it was unable to sell the gas, Rosneft said it had to flare off associated gas in quantities exceeding the maximum amount permitted by environment legislation, thus incurring a fine.

Gazprom controls the country gas transmission network the main system of pipelines used to transport gas throughout the country. Rosneft has to use the system to transport the gas that it obtains as part of the oil drilling process from its oil fields in eastern Siberia. The case will be considered on December 2nd.

(Sourced from The Moscow Times)

PRESS-RELEASE 30.10.2009  LUKOIL PAYS FINAL TRANCHE FOR AKPET   http://www.lukoil.com/press.asp?div_id=1&id=3152&year=2009

LUKOIL EURASIA PETROL A.S. (a 100% subsidiary of OAO LUKOIL) paid the final tranche for the shares of the Turkish company Akpet.The payment was made from LUKOIL Group’s own resources. According to previous reports, LUKOIL EURASIA PETROL A.S. acquired 100% of Akpet's shares in November 2008 for USD 555 million. The parties of the transaction reached agreement on progress payment in interest-free installments. Payment of the first tranche in the amount of USD 250 million and of the second tranche in the amount of USD 150 million was made on November 24, 2008 and on April 30, 2009, respectively.

The assets of the Turkish company include about 700 filling stations, an extensive terminal infrastructure with the capacity of over 300 thousand cubic meters and a factory to manufacture and pack motor oils. At present, the total number of filling stations owned by LUKOIL EURASIA PETROL A.S. inTurkey is about 750.

02.11.2009

Oil and Gas Eurasia: E.ON Expects to Produce 6 bcm of Gas at Yuzhno-Russkoye Fieldhttp://www.oilandgaseurasia.com/news/p/0/news/6032

E.ON expects to produce 6 bcm of gas at Yuzhno-Russkoye field E.ON Ruhrgas expects to produce 6 billion cubic meters of gas annually at one of Russia's largest gas fields, Yuzhno-Russkoye, the German energy company's CEO said.Earlier in the day, E.ON and Russian energy giant Gazprom signed documents closing a deal under which the German company swapped its 3% stake in Gazprom for a 25% share in Yuzhno-Russkoye."Apart from long-term gas supply contracts, we are pushing our own production. Natural gas output will fall substantially in the next few decades, while we could produce annually over 6 bcm at the field," Bernhard Reutersberg said after the signing ceremony.He expressed the hope that E.ON Ruhrgas would manage to push its own natural gas output to 10 bcm by 2012.The two companies signed an agreement on jointly developing the west Siberian oil and gas field last October, and an asset swap deal in the sphere of natural gas output and trade in June 2009. Å.ON is also Gazprom's partner in the Nord Stream project to build a gas pipeline under the Baltic Sea to Germany.The Yuzhno-Russkoye field will supply some of its gas to the pipeline expected to go on stream in late 2011.The deposit has recoverable reserves of 600 billion cubic meters of gas.E.ON Ruhrgas holds 3.5% in Gazprom through Gerosgaz, and is Gazprom's largest foreign shareholder.    -  Copyright 2009, RIA Novosti. All rights reserved.  

Hungary MOL subsidiary gets potential buyer from Bosniahttp://www.portfolio.hu/en/cikkek.tdp?k=1&i=18827

November 3, 2009, 9:13 amBosnian oil group Optima, owned by Russia's Zarubezhneft, may bid for a stake in fuel retailer Energopetrol if a regional government does end a deal with a consortium of Hungary's MOL and Croatia's INA, Reuters reported. Optima already has plans to earmark EUR 200 m for the transaction.

The consortium of MOL and INA acquired a 67% state stake in Energopetrol in 2007 for 10.2 million Bosnian marka (USD 7.7 m) and pledged a further 150 million marka investment.

Prime Minister Mustafa Mujezinovic of Bosnia's Muslim-Croat federation said last week,

however, his cabinet may terminate the deal because the consortium had breached contractual obligations towards the region's largest fuel retailer, i.e. it failed to carry out the BAM 150 m investment.

Slavko Scepanovic, deputy manager of the Optima group that includes the Brod oil refinery, a motor oil plant in the northern town of Modrica and the Petrol distribution chain, said Optima was interested in Energopetrol.

"We are looking to expand our distribution chain across Bosnia and may consider an eventual takeover of Energopetrol if the federation government decides to end the deal with MOL/INA," Scepanovic told Reuters by telephone.

Optima has announced plans to set aside EUR 200 m (USD 295.5 m) for the takeover of petrol stations, as well as a EUR 1 bn investment to help boost oil refinery capacity from 1.2 to 4.2 billion tonnes of oil by 2015.

Energopetrol operates 65 petrol stations in the federation. Optima group owns 78 stations in the Serb Republic and only 10 stations in the federation that it has recently acquired for an undisclosed amount of money.

Gazprom

RBC: Gazprom boosts monthly gas production by 20%

http://www.rbcnews.com/free/20091103112430.shtml

      RBC, 03.11.2009, Moscow 11:24:30.Gazprom's natural gas production almost reached its pre-crisis level in October, after jumping 20 percent against September, the RBC Daily newspaper reported today. The Russian energy giant attributes this increase to a consistent rise in demand for gas not only on the domestic market, but also on foreign markets. With this in mind, Gazprom is likely to generate $1.1bn in revenue in just one month.

      In October alone, Gazprom produced 44.913bn cubic meters of gas, with a daily production of 1.45bn cubic meters. This figure is 20.8 percent greater than in September. At the same time, production dropped 1.4 percent against October 2008.

      In general, the rise in production may be attributed to the seasonal factor, as well as higher purchases by European consumers, who cut gas acquisitions considerably in H1 2009 in expectation of a price drop at the end of the year.

Reuters: UPDATE 1-Gazprom, Eni back EDF joining South Stream –Gazpromhttp://in.reuters.com/article/oilRpt/idINL243409820091102

Tue Nov 3, 2009 12:36am IST

* South Stream to start up before Nord Stream pipeline

* Gazprom looks for new partners on Italy's gas market

(Adds comment, background)

MILAN, Nov 2 (Reuters) - Russia's gas giant Gazprom (GAZP.MM: Quote, Profile, Research) and Italy's Eni (ENI.MI: Quote, Profile, Research) back plans for French utility EDF to join their South Stream pipeline project to bring Russian gas to Europe, a senior Gazprom executive said.

EDF (EDF.PA: Quote, Profile, Research) said last month it was in talks with Gazprom to take a stake in the subsea section of the South Stream project that Gazprom plans to build with Eni, and could reach a deal within weeks. [ID:nLL568371] "We foresee the possibility to convert offshore projects of the South Stream from bilateral into trilateral projects because EDF has expressed a strong interest and this interest is supported both by Gazprom and Russia and Eni and Italy," Gazprom Deputy Chief Executive Alexander Medvedev said.

Medvedev was speaking in an interview with Italian television programme Ballaro to be broadcast on Tuesday. A transcript translated into Italian was obtained by Reuters.

The South Stream pipeline, with a capacity of up to 63 billion cubic metres, will be built under the Black Sea.

It is seen as the main rival to the Nabucco pipeline, which is backed by the European Union and the United States and aims to reduce Europe's energy dependence on Russia by securing gas from the Caspian region.

But Medvedev brushed off such concerns saying the projects were not rivals because Russia's gas supplies may be not enough to satisfy Europe's needs. Medvedev said he hoped to clarify this issue at meetings with U.S. politicians when he arrived there in mid November.

Medvedev said he expected South Stream to start operations before Gazprom's other key project, the Nord Stream pipeline to bring gas to Germany via the Baltic Sea, thanks to a "green light" from Turkey for the southern link. [ID:nL6176384]

The Turkish government would hopefully give all necessary authorisation for the South Stream project in the first quarter of next year which would allow the companies to start construction works, Medvedev said. Eni Chief Executive Paolo Scaroni said last month he hoped an investment decision on South Stream would be taken in the middle of next year and that first pipes could be laid down in 2013.

Medvedev said Gazprom, which has agreements with Italy's biggest municipally controlled utility A2A (A2.MI: Quote, Profile, Research) and other local utilities to supply gas, was looking for new partners to supply gas on the Italian market.

Gazprom was also working to enter Italy's power generation market, he said without giving more details. (Reporting by Svetlana Kovalyova; editing by Sue Thomas)

Nasdaq: Iran Co Says Gazprom Signed Azar Oilfield Development MOUhttp://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200911021123dowjonesdjonline000270&title=iran-co-says-gazprom-signed-azar-oilfield-development-mou

LONDON -(Dow Jones)- An Iranian state-owned company Monday said it has signed a prelimary deal with OAO Gazprom (GAZP.RS) to develop the Azar oilfield in the Islamic Republic.

In statements posted on the Iranian oil ministry's Web site, the Petroleum Engineering and Development Co. said it had signed a memorandum of understanding with the Russian gas giant to develop the oilfield, which is located in western Iran.

-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@ dowjones.com

Payvand Iran News: Russia's Gazprom inks MOU for development of Iran's Azar oilfield http://www.payvand.com/news/09/nov/1017.html

TEHRAN, Nov. 2 (Mehr News Agency) - Iran's Petroleum Engineering and Development Company (PEDCO) and Russia's Gazprom signed a memorandum of understanding for development of Azar oilfield, west of Iran. Based on the inked MOU, which was approved by National Iranian Oil Company, the Russian firm has to propose its plan of action in three months, SHANA news agency reported on Monday. Previously, NIOC was negotiating with Iran's Oil Industries Engineering and Construction Company (OIEC) for the development of Azar oilfield as a result of Statoilhydro Company's waver. Norway's Norsk Hydro and Lukoil worked together on an exploration contract for the Anaran block’s Azar oilfield located in Iran's southwestern province of Ilam, and discovered oil there in 2005. The companies later said the field holds 2 billion barrels of oil. Norway's Norsk Hydro held 75 percent of the exploration license, while Lukoil held 25 percent. StatoilHydro ASA, a Norwegian energy company, was formed by the 2007 merger of Statoil with the oil and gas division of Norsk Hydro. The company changed its name to Statoil ASA as of November 1, 2009. Statoil ASA is the biggest offshore oil and gas company in the world.

The Azar field lies in Ilam province in western Iran and holds 400 million barrels of oil. Based on the reports the field could produce as much as 50,000-65,000 barrels of oil per day for 25 years.

Gazprom delegation visits Chinahttp://www.gazprom.com/

Committee, the Company’s delegation had in Shanghai a round of commercial negotiations with China National Petroleum Corporation (CNPC) relevant to the arrangement of Russian natural gas supplies to China.

The parties thoroughly discussed the issues of pricing, amounts, routes and deadlines of supplies. Alexander Medvedev and Wang Dongjin, Vice President of CNPC agreed upon formation of the working groups of experts from Gazprom and CNPC to address joint participation in the projects for setting up gas chemical complexes in the Far East.

02.11.2009Oil and Gas Eurasia: Gazprom, CNPC begin commercial talks on price of Russian gas deliveries to China http://www.oilandgaseurasia.com/news/p/0/news/6033

     A Gazprom (RTS: GAZP) delegation led byDeputy CEO  Alexander  Medvedev held talks with China National PetroleumCorporation  (CNPC)  on  Russian  gas deliveries to China in Shanghai onSunday and Monday.     The  parties  held detailed discussions on pricing, volumes, routesand the timeframe for the deliveries, Gazprom said in a press release.     Medvedev  and  CNPC Vice President Wang Dongjin agreed to set up anexpert working  group  to  discuss  joint  participation  in projects tocreate gas chemical complexes in the Far East.     Negotiations  on  the key issues surrounding Russian gas deliveriesto China and potential joint projects will resume at the end of 2009.     It  was  reported  earlier  that the framework agreement on Russiannatural  gas  deliveries  to  China  was signed in October. The documentdetails  the main provisions of the future contract. The deliveries willbe made  on two routes: up to 30 billion cubic meters on a western routeand up to  38  bcm  on  an  eastern  route.  The  western route could beorganized in the shortest possible time, since there are reserves of gasavailable, the infrastructure exists, and there is no need to create gaschemical  and gas processing capacity. The document fixes the pricing toan oil basket  index.  One  Russian  official said the contract could besigned in June 2010 and actual deliveries could begin in 2014-2015.    -   Copyright 2009, Interfax. All rights reserved.