Russia 110331

Basic Political Developments Russia lifts limitations on land border crossing for Iran - The Iranian embassy in

Moscow has coaxed the Russian Ministry of Foreign Affairs to lift limitations for land border crossing with Azerbaijan and Georgia by Iranian citizens and transport, IRNA reports.

Forty-six Russians, 59 foreigners airlifted to Moscow from Libyao RME plane brings 105 evacuees from Libya to Moscowo Russia Evacuates 4 Bulgarians from Libya

Sakhalin, Kurils radiation background normal in all areas Russian official: “There is no territorial conflict with Abkhazia” - “No dispute

exists in connection with the Abkhazian land. The parties exchanged the information about the question at the first day of the meeting. The negotiations will be continued today as well, “- Igor Akhba, Abkhazian envoy to Russian Federation told Interfax.

o Lavrov to visit Abkhazia, South Ossetia in April - sourceo Sukhumi has its views on the "border" - As Kvarchia noted, the

Abkhazian part of the commission has prepared various documents, archival materials, including cartographic ones. But they are unlikely to help Sukhumi in deciding the purely political issue.

o New people in the staff of generals of the army of "independent" Abkhazia Riga representational office to be opened in Moscow - The representational office

will be responsible for fostering cooperation between Latvian and Russian members of the business community, will promote export of Latvian goods on the Russian market, and exchange of experience between Riga, Moscow and various regions of Russia.

Russia Limits Poultry Imports From Netherlands Province Over Flu Russian Northern Fleet ready to put Bulava missile into service – commander Over 200,000 young men dodging army service in Russia - Gen. Staff

o No plans to have only contract servicemen in Russian Armed Forces - General Staff

Kyrgyz man convicted of religious extremism in Buryatia Suspected terrorist turns out to be missing person - "Police started searching for

Viktoria Syrbu after her mother declared her missing. Viktoria has never been wanted as a potential terrorist," the source said.

One militant identified after law enforcement operation in Ingushetia - He was an active member of a criminal armed group, Ibragim Tsaroyev, born in 1989. He was placed on a wanted list as an active member of a criminal armed group, who participated in attacks on law enforcement officials,"

o Chechen warlord's doctor killed in North Caucasus raid – paper : According to police, Yusup Buzurtanov has been Umarov's personal doctor for many years and always accompanied the Chechen warlord, who suffers from diabetes.

Dagestan businessman accused of giving militants over 167 million rubles – ministry

Search for suspected financier of the underground in Dagestan Bodies of militants killed in Ingushetia to undergo DNA tests in Moscow Car bomb disabled in Dagestan - The car filled with explosives was found in the

city of Makhachkala in the east of the country. A few hours earlier a terrorist was killed in the capital of Dagestan. He was a citizen of Kazakhstan, born in 1987.

Submarine accident indictments handed down - The Military Prosecutor of the Pacific Fleet, on Wednesday confirmed criminal indictments involving allegations surrounding an accident on Nov. 8, 2008 on the nuclear submarine "Seal" according to an assistant t the military prosecutor, Roman Kolbanov.

Thursday, March 31: MOSCOW — Opposition holds protest in central Moscow, latest in series of protests held on the last day of every month with 31 days

Police preparing for the rally at Triumfalnaya square Moscow Police Raid ‘Strategy 31′ Office, Promise Arrests Human Rights Activists to Pull Out of ‘Strategy 31′ Kremlin Takes Aim at Rosneft Chairman - By Jacob Gronholt-Pedersen Deputy finance minister to lead markets watchdog Reuters PRESS DIGEST - Russia - Mar 31 RIA Russian Press at a Glance, Thursday, March 31, 2011 Stars honour Gorbachev at London charity gala Dissident Bukovsky sees worst Soviet-era traditions in London court's refusal to

arrest Gorbachev One year on from Moscow bombing - It has been a year since the Moscow Metro

was hit by a terrorist attack, carried out by the so-called Black Widow suicide bombers. The ABC's Moscow correspondent travelled to the village home of one of the bombers to speak to her father.

The US-Russia Space Race: An exercise in Cold War brinkmanship - By Andrew Osborn

National Economic Trends World Bank Sees Poverty Down, Inflation as Biggest Risk - By Irina Filatova Russia grows on oil, lacks business climate – WB - By Andrey Ostroukh Russia sees gas windfall after Japan quake Filling the pillars with concrete: Medvedev demands progress in economic plan Fight over economic policy expanding as oil prices rage on

Business, Energy or Environmental regulations or discussions Russian markets -- Factors to Watch on March 31 Deripaska Utility Plans to Export Power to China, RBC Daily Says Rusal May Issue Second Tranche of Ruble Bonds by April-May

o RUSAL 2010 net profit more than tripleso Rusal Net Profit More Than Triples

UPDATE 1-Petropavlovsk FY profit dragged lower on costso Petropavlovsk FY10 Profit Falls - Quick Facts o Gold miner Petropavlovsk's 2010 net profit plummets 84%

Russia's Evraz may pay H1 2011 divs, no 2010 payouto UPDATE 1-Russia's Evraz beats profit forecast, demand up

NLMK targets SIF buyout Russian Facebook Billionaires Buy 360buy.com Stake, IFX Says Sibirtelecom net profit up 115% to RUB 4.248 bln in 2010 Government may offer 30% rebate on bus purchases - Supportive for GAZ Fiat to Invest in Russia, Seeks VEB Funds: Kommersant GM Readies For Russian Auto Market Adventure Altay Territory Enlisted among Russian Regions with Optimum Ecology

Activity in the Oil and Gas sector (including regulatory) Belarus and Russia Renegotiated Terms of Oil Supply Russia's Surgut 2010 net profit rises 13 pct Rosneft sells 15pct of petroleum production through Petersburg exchange in

March Transneft: could privatisation be back on the agenda? Bashneft 2010 reserve audit confirms solid base for sustainable output Suitors Line Up To Pick Up BP's Slack In Russia

Gazprom Gazprom to Pay Record $2.2 Billion in Dividends, Vedomosti Says Do not stray far from Gazprom - Deutsche Bank sees Gazprom capitalizing faster

than expected on the recent shift in global gas fundamentals No More Gas in Gazprom Shares - Tragedy in Japan and turmoil in Libya have

spelled opportunity for Gazprom. The Russian state-controlled natural-gas producer's London-listed American depositary receipts are up about 27% in 2011 on the back of soaring demand from Europe. But investors should be wary of chasing them higher. By ANDREW PEAPLE

Gazprom, Statoil Heads Stress Need to Keep Shtokman Project on Schedule Gazprom in Murmansk: we have come to stay - Aleksander Mandel, the director

general of Gazprom Neft Shelf, updates on Shtokman development progress at the press conference in Murmansk.

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Full Text Articles

Basic Political Developments

Russia lifts limitations on land border crossing for Iranhttp://vestnikkavkaza.net/news/politics/12414.html

The Iranian embassy in Moscow has coaxed the Russian Ministry of Foreign Affairs to lift limitations for land border crossing with Azerbaijan and Georgia by Iranian citizens and transport, IRNA reports.

The Iranian embassy said that the decision was made to aid freighting between Iran and Russia. Iranian citizens may now enter Russia through Azerbaijan and Georgia.

The embassy’s report underlines that opening the land border for Iran is an important step in increasing trade turnover, reduction of export and transit expenses and increase of direct freighting quantities using the international transport corridor North-South between Iran, Russia and other states.

The border with Azerbaijan and Georgia was closed for Iran, causing problems in transport and organization of goods exchange.

March 31, 2011 10:47

Forty-six Russians, 59 foreigners airlifted to Moscow from Libyahttp://www.interfax.com/newsinf.asp?id=232890

MOSCOW. March 31 (Interfax) - An Ilyushin Il-62 plane of the Russian Emergency Situations Ministry airlifted 105 people to Moscow from violence-torn Libya on Thursday morning.

They include 46 Russians, 38 Ukrainians, five citizens of Belarus, three Uzbeks, six Tajik citizens, four citizens of Bulgaria, one citizen of Moldova and two Libyans, a ministry spokesman told Interfax.

The two Libyan citizens who arrived in Moscow are the husbands of women evacuated earlier, the spokesman said.

On Wednesday, the 105 people traveled overland from Libya to the Tunisian port of Djerba, from where they were picked up by the Russian ministry's plane and delivered to Moscow.

The evacuation proceeded on orders given by Russian President Dmitry Medvedev, the ministry's spokeswoman Irina Andriyanova said earlier.

RME plane brings 105 evacuees from Libya to Moscow

http://www.itar-tass.com/eng/level2.html?NewsID=16104616&PageNum=0

31.03.2011, 07.56

MOSCOW, March 31 (Itar-Tass) - A Russian Ministry for Emergencies (RME) plane has brought 105 evacuees from Libya, to Moscow, an official at the RME informationa department has told Itar-Tass.

"Early on Thursday morning, an IL-62 airliner of the RME landed at the Domodedovo airport, bringing 105 evacuees, among them Russians and the nationals of other countries -- Belarus, Ukraine, Uzbekistan, Tajikistan, Bulgaria, and Libya," the RME official specified.

They all were evacuated from Libya to Tunisia where they were collected by the RME plane. It was earlier planned that 110 evacuees would be brought to Moscow.

At the endof February, following the aggravation of the situation in Libya, 914 people had been evacuated from there, with 467 of them being citizens of Russia and the nationals of 13 countries. Almost all of them had been working in Jamahiriya under contracts with Russian companies. Part of Russians and foreigners had been evacuated from Libya's Ras Lanouf by ferry to Montenegro where they had been taken on board by an RME plane and brought to Moscow.

Russia Evacuates 4 Bulgarians from Libyahttp://www.novinite.com/view_news.php?id=126820

Diplomacy | March 31, 2011, Thursday

An airplane of the Russian Ministry of Emergency Situations, which left Tunisia on Wednesday, arrived to Moscow with more than 100 passengers on board, including four Bulgarians, evacuated from Libya.

A total of 107 people, including Russians, Bulgarians and citizens of CIS countries, were evacuated during the humanitarian operation, implemented jointly by the Russian Embassies in Tripoli and Tunisia. Western powers also helped with providing security, RIA Novosti reported on Thursday.

The evacuees have been delivered to the Tunisian island of Djerba and then sent to Moscow by a Russian Energencies Ministry plane.

Sakhalin, Kurils radiation background normal in all areas

http://www.itar-tass.com/eng/level2.html?NewsID=16104480&PageNum=0

31.03.2011, 04.33

VLADIVOSTOK, March 31 (Itar-Tass) - No deviation from the normal radiation background was registered on Thursday in all areas of the Sakhalin and Kuril Islands. According to meteorologists, the radiation background in the region ranges from 8 to 15 micro-roentgens per hour, and the permissible level is 30 micro-roentgens.

The Russian Emergency Situations Ministry’s main department for the Sakhalin region reported that intensified monitoring of the radiation situation continues involving 99 stations. Taking part in the monitoring are ships of the Sakhalin Coast Guard department, aviation of the Emergencies Ministry and other agencies. No radiation hazard is forecasted, there is no threat to the population

Russian official: “There is no territorial conflict with Abkhazia” http://times.am/2011/03/31/russian-official-%E2%80%9Cthere-is-no-territorial-conflict-with-abkhazia%E2%80%9D/

By Times.am at 31 March, 2011, 10:38 am

Russian side has denied the information about the territorial conflict with Abkhazia, GHN reports.

“No dispute exists in connection with the Abkhazian land. The parties exchanged the information about the question at the first day of the meeting. The negotiations will be continued today as well, “- Igor Akhba, Abkhazian envoy to Russian Federation told Interfax.

Akhba hope that the solution will be achieved convenient to both sides in connection with the state border.

The head of Abkhazian delegation Valeri Kvarchia said the first day of the meeting appears to be very positive and fruitful.

/Times.am/

12:02Lavrov to visit Abkhazia, South Ossetia in April - source

http://www.interfax.com/news.asp

Sukhumi has its views on the "border" http://eng.expertclub.ge/portal/cnid__8108/alias__Expertclub/lang__en/tabid__2546/default.aspx

30/03/2011 13:29

Sukhumi regime presented its version of the description of the Abkhazian section of the Georgian-Russian border in Moscow. This was stated by representative of the Abkhazian delegation Valery Kvarchia.

According to him, the Abkhazian side stated its position at the meeting that was held in Moscow. But Kvarchia did not specify the position.

"The Russian side will study our materials and submit their proposals tomorrow" - said Kvarchia.

As Kvarchia noted, the Abkhazian part of the commission has prepared various documents, archival materials, including cartographic ones. But they are unlikely to help Sukhumi in deciding the purely political issue.

New people in the staff of generals of the army of "independent" Abkhazia http://eng.expertclub.ge/portal/cnid__8116/alias__Expertclub/lang__en/tabid__2546/default.aspx

31/03/2011 12:05

The Abkhazian media with reference to representative of the puppet regime Levon Galustian reported that on March 29th Sergei Bagapsh signed a decree on appointment of Russian General Vladimir Vasilchenko as chief of staff of generals of the Abkhazian army and first Deputy Defence Minister. Before that this post had been occupied by retired General Anatoly Zaitsev.

On the same day Sergei Bagapsh presented the new chief of staff of generals to the Ministry of Defence and the command of the armed forces.

Before his appointment in Abkhazia General Vasilchenko served as the first deputy head of the Siberian military district.

 

Riga representational office to be opened in Moscowhttp://www.baltic-course.com/eng/good_for_business/?doc=39166

Nina Kolyako, BC, Riga, 31.03.2011

On March 31, Riga Mayor Nils Usakovs (Harmony Center) will open Riga's representational office in Moscow, Usakovs' press secretary Anna Kononova informed LETA.

The representational office will be responsible for fostering cooperation between Latvian and Russian members of the business community, will promote export of Latvian goods on the Russian market, and exchange of experience between Riga, Moscow and various regions of Russia.

The representational office will also coordinate and organize several projects, including Riga Days in St. Petersburg this autumn, the visits of Russian officials to Riga, the activities of the Riga Tourism Development Bureau in various regions of Russia, promoting Latvia as tourism-friendly destination.

Usakovs, during his visit to Moscow, will meet with Russian Transport Minister Igor Levitin, First Deputy Mayor of Moscow, Ludmila Shvetsova, Russian Regional Development Minister Viktor Basarigin and President of Russian Chamber of Commerce and Industry Sergey Katyrin.

Russia is Latvia's second largest foreign trade partner. Last year Latvia's export to Russia increased 50%, whilst import – 16%.

79,000 Russian tourists made overnight stays in Latvian hotels in 2010, which is 67% more than in 2009.

Riga municipality predicts that the number of Russian tourists in Riga will increase at least 20% this year.

Usakov's working visit will end on April 1.

Russia Limits Poultry Imports From Netherlands Province Over Fluhttp://www.bloomberg.com/news/2011-03-31/russia-limits-poultry-imports-from-netherlands-province-over-flu.html

By Marina Sysoyeva - Mar 31, 2011 9:15 AM GMT+0200

Russia imposed temporary restrictions on imports of poultry, eggs, live birds, feed and poultry-industry equipment from the Zeeland province of the Netherlands on flu risks, the government’s food safety service Rosselkhoznadzor said on its website.

The limitations were put in place yesterday and will run until further notice in response to an outbreak of the H7N1 bird flu virus in Zeeland, according to the statement, which didn’t elaborate on the restrictions.

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

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

March 31, 2011 12:36

Russian Northern Fleet ready to put Bulava missile into service - commander (Part 2)http://www.interfax.com/newsinf.asp?id=232953

GADZHIYEVO, Murmansk region. March 31 (Interfax-AVN) - The Russian Northern Fleet's crews are fully ready to begin operating a Borei-class nuclear submarine in 2011, the commander of the fleet's submarine forces, Rear Admiral Igor Mukhametshin, said on Thursday.

"A task has been set to us to put the Bulava new ballistic missile into service this year. Our personnel are completely prepared to fulfill it," he said.

"This year we expect a new strategic cruiser and a new generation multi-role submarine to join the fleet's submarine forces, which will greatly enhance its combat potential," Mukhametshin said.

"I am speaking about a Borei-class submarine," he said.

All of the crews were trained to operate the new submarine at Navy centers, he said.

"Furthermore, they have already performed several missions on board this submarine. I have no complaints about the quality of the personnel's skills," Mukhametshin said.

On Monday, the Northern Fleet's acting Commander Rear Admiral Andrei Volozhinsky told Interfax-AVN that three new submarines currently undergoing trials in the White Sea could join the Northern Fleet this year.

tm dp

03/31 11:37   Over 200,000 young men dodging army service in Russia - Gen. Staff

http://www.interfax.com/

03/31 12:12   No plans to have only contract servicemen in Russian Armed Forces - General Staff

http://www.interfax.com/

31 March 2011, 11:35

Kyrgyz man convicted of religious extremism in Buryatiahttp://www.interfax-religion.com/?act=news&div=8324

Chita, March 31, Interfax - A court in Ulan-Ude, the capital of Russia's Republic of Buryatia, has convicted Samagan Aldakulov, a 33-year-old man of Kyrgyz origin, of extremism and has given him a suspended prison sentence, Buryatia's police department said in a statement.

Aldakulov was found guilty of promoting the Tablighi Jamaat religious movement's ideas of intolerance toward non-Muslims from May 2009 to April 2010.

"He actively participated in assemblies and recruited new followers in Buryatia and other Russian regions," the police department said.

Aldakulov also led groups that travelled across Russia to promote radical Islamic ideas.

It was the first such case to go to trial in Buryatia.

Last August, a court in neighboring Transbaikal territory handed down a suspended prison sentence to the leader of the Chita-based cell of Tablighi Jamaat, Nurgazy Kydyraliyev.

Suspected terrorist turns out to be missing personhttp://en.rian.ru/russia/20110331/163300024.html

12:03 31/03/2011

A Moscow police source dismissed reports that a Siberian student who arrived in Moscow earlier this week was wanted on terrorism charges, saying instead that she had been declared missing by her mother

"Police started searching for Viktoria Syrbu after her mother declared her missing. Viktoria has never been wanted as a potential terrorist," the source said.

The comment comes after media reports that police were seeking a young woman who arrived in Moscow from west Siberia's Surgut to carry out a terrorist attack.

MOSCOW, March 31 (RIA Novosti)

March 31, 2011 09:53

One militant identified after law enforcement operation in Ingushetiahttp://www.interfax.com/newsinf.asp?id=232864

ROSTOV-ON-DON. March 31 (Interfax) - A militant, killed in a security operation in a private house in the village of Verkhny Akun in Inghushetia on Tuesday, has been identified, a source in Ingushetia's law enforcement services told Interfax.

"The bandit who offered active resistance to police after he was trapped in a private house in the village of Alkun on Tuesday has been identified. He was an active member of a criminal armed group, Ibragim Tsaroyev, born in 1989. He was placed on a wanted list as an active member of a criminal armed group, who participated in attacks on law enforcement officials," he said.

A search operation is continuing in a forest near Verkhny Alkun on a tip-off that some of the militants may be hiding in an inaccessible mountainous and forested area, he said.

Asked whether the odious field commander Doku Umarov has been killed, the source said, "fragments of the militants, killed in an air strike are undergoing molecular-genetic identification, which is expected to clarify who was among the destroyed group of militants. It is impossible to establish the killed militants' identities visually, he said.

One of the militants was identified as Umarov's doctor Yusup Buzurtanov, the daily Kommersant reported on Tuesday.

The National Anti-Terror Committee told Interfax on Monday that 17 militants were killed and two others, involved in the terror attack at Domodedovo Airport, were detained in a law enforcement operation in Ingushetia.

Chechen warlord's doctor killed in North Caucasus raid – paper

http://en.rian.ru/russia/20110331/163297178.html

07:15 31/03/2011

Police have identified the body of a personal doctor of infamous Chechen warlord Doku Umarov among the militants killed in a recent raid on a terrorist base in southern Russia, a Russian business daily said Thursday.

According to police, Yusup Buzurtanov has been Umarov's personal doctor for many years and always accompanied the Chechen warlord, who suffers from diabetes.

"A bag with medical supplies, including syringes and vials with insulin was found near Buzurtanov's body," the Kommersant said.

Seventeen militants were killed on Monday in a raid on a base in the volatile Russian North Caucasus republic of Ingushetia used by Islamist insurgents to train suicide bombers.

The operation involved ground forces and air strikes. Three Russian servicemen were also killed.

Russian officials suggested that Umarov could have been among those killed during the attack on the terrorist camp, but later said only a DNA test could prove whether Umarov was killed in the raid.

Umarov, who has styled himself as the Emir of the Caucasus Emirate, claimed responsibility for the Domodedovo airport blast in January that killed 37 people, as well as the March 2010 suicide bombings on the Moscow subway, in which 40 people died.

There have been several false reports of the death of Umarov in recent years, including speculation that he was killed in an airstrike in Chechnya at the turn of the year.

MOSCOW, March 31 (RIA Novosti)

03/31 10:27   Dagestan businessman accused of giving militants over 167 million rubles – ministry

http://www.interfax.com/

GOOGLE TRANSLATION

Search for suspected financier of the underground in Dagestanhttp://www.bbc.co.uk/russian/rolling_news/2011/03/110331_rn_dagestan_search.shtml

Last Updated: Thursday, March 31, 2011, 05:59 GMT 09:59 MCKLaw enforcement officials are looking for a resident of Dagestan, Khasavyurt, a suspect in the financing of illegal armed groups, the Interior Ministry of the Russian region said.According to investigators, the businessman, the head of a local company, gave the militants more than 165 million rubles.The activities in question, carried out from May to November 2006.LLC does not actually carry out their activities, and limited the conclusion of formal agreements with various companies. received in the account means the company's director cashed and transferred to the members of illegal armed groups "- Interfax said a Ministry of Interior.

10:09Bodies of militants killed in Ingushetia to undergo DNA tests in Moscow

http://www.interfax.com/news.asp

Car bomb disabled in Dagestanhttp://english.ruvr.ru/2011/03/31/48219970.html

Mar 31, 2011 03:00 Moscow Time

A car bomb which was left in the courtyard of a residential building has been neutralized in Dagestan.

The bomb was neutralized with the aid of a water cannon.

The car filled with explosives was found in the city of Makhachkala in the east of the country.

A few hours earlier a terrorist was killed in the capital of Dagestan. He was a citizen of Kazakhstan, born in 1987.

Submarine accident indictments handed downhttp://english.ruvr.ru/2011/03/31/48222378.html

Mar 31, 2011 08:45 Moscow Time

The Military Prosecutor of the Pacific Fleet, on Wednesday confirmed criminal indictments involving allegations surrounding an accident on Nov. 8, 2008 on the nuclear submarine "Seal" according to an assistant t the military prosecutor, Roman Kolbanov.

During tests in the Sea of Japan the nuclear submarine caught fire. The fire-extinguishing system worked properly and the compartments began to flood with poisonous gas.

20 people were killed and another 21 were hospitalized.

A case was brought against submarine commander Dimitry Lavrentiev and bilge engineer Dimitry Grobov.

The investigation concluded that their inaction led to the accident.

The case will be sent to the Pacific Navy headquarters where the defendants will be court-martialed.

AP Weekly News Calendarhttp://www.google.com/hostednews/canadianpress/article/ALeqM5iC-tgVyjtEwsi-Nj8Q-iL_OzM8AQ?docId=6415923

By The Associated Press – 5 hours ago

Thursday, March 31:

MOSCOW — Opposition holds protest in central Moscow, latest in series of protests held on the last day of every month with 31 days.

CORRECTED GOOGLE TRANSLATIONPolice preparing for the rally at Triumfalnaya square

http://www.bbc.co.uk/russian/rolling_news/2011/03/110331_rn_meeting_31_police.shtml

Last Updated: Thursday, March 31, 2011, 05:44 GMT 09:44 MCKRussian police strengthens security measures at Triumfalnaya Square before an unsanctioned rally, announced by the leader of the opposition coalition The Other Russia, Eduard Limonov.For nine hours before the rally started traffic police have banned parking on all streets adjacent to the area.At the exit of the subway station Mayakovsky opposite the monument to Vladimir Mayakovsky few riot police are on duty.Moscow Mayor's Office refused a request by Eduard Limonov to hold a rally at Triumfalnaya, however, mandated opposition rally in Pushkin Square, organized by the head of the Moscow Helsinki Group Lyudmila Alekseeva.

Moscow Police Raid ‘Strategy 31′ Office, Promise Arrestshttp://www.theotherrussia.org/2011/03/30/moscow-police-raid-strategy-31-and-promise-arrests/

March 30th, 2011 • Related • Filed Under

On the eve of a national opposition protest in defense of free assembly, Russian law enforcement agents have raided the organizational offices of Strategy 31, Kasparov.ru reports.

Other Russia party member Aleksandr Averin said 20 police officers armed with automatic weapons broke into the office near Moscow’s Belorusskaya metro station on Wednesday, breaking both the door and a window.

Another Other Russia party leader, Nikolai Avdyushenkov, said four activists have been detained – Konstantin Makarov, Marat Salakhiev, Dmitri Kulkov and Alena Kapotina.

“It’s obvious that today’s search is connected with tomorrow’s action on Triumfalnaya Square,” said Averin, referring to the traditional meeting place for Strategy 31 participants. “Members of law enforcement agencies are trying to frighten supporters of free assembly in carrying out the orders of their superiors.”

“It’s particularly worth noting that there was also a raid on the headquarters of Strategy 31 on January 30, prior to the last action on Triumfalnaya. It’s true that, at that time, the police officers behaved correctly. Is this really how the renaming [of the 'militsiya'] to the ‘politsiya’ has had an effect?” Averin asked.

There were three separate raids in Moscow on January 30 that affected the Other Russia party: on Avdyushenkov’s apartment, on the apartment of a party activist in the village of Medvedkovo, and also on Strategy 31’s organizational headquarters. The raids were

carried out in connection with a criminal case against members of the organization under suspicion of involvement in race riots near the Kremlin last December.

Regardless of whether the raids are meant to scare away Strategy 31 supporters, Moscow city police said on Wednesday that they intended to arrest anyone who shows up at tomorrow’s rally on Triumfalnaya Square, which has not been officially sanctioned.

“The city mayor’s office proposed several different areas to hold the rally to organizers of this event; however, traditionally and consciously entering into conflict with the authorities and law enforcement agencies, Limonov did not turn down the places chosen for him and called for people to come to Triumfalnaya Square independent of the decision by the authorities,” police spokesman Viktor Biryukov told reporters.

“Police officers have every basis to arrest and place Limonov and other active supporters of provocational actions in police holding facilities,” he added.

Biryukov also said police would be asking those gathered at Triumfalnaya to walk over to Pushkin Square, where Strategy 31 co-organizer Lyudmila Alexeyeva plans to hold her own, sanctioned version of the rally.

Human Rights Activists to Pull Out of ‘Strategy 31′http://www.theotherrussia.org/2011/03/30/human-rights-activists-to-pull-out-of-strategy-31/

March 30th, 2011 • Related • Filed Under

The Russian opposition’s largest protest movement, Strategy 31, has been dealt a possibly fatal blow after For Human Rights head Lev Ponomarev announced that human rights activists who have participated in the movement up until now will no longer do so after the next rally on March 31.

On March 28, Ponomarev wrote in his blog that the rights activists will be taking up another cause in place of the defense of free assembly. “We are proposing holding a last rally under the name of ‘Movement 31′ or ‘Strategy 31.’ In the future, we won’t be holding rallies on the 31st date. We have diverged in concept from [Strategy 31 co-founder Eduard] Limonov’s group and propose no longer using the 31st date; moreover, our very concept of a rally is changing,” he said.

The group of activists now plans to lend their support to an initiative to ban United Russia – the country’s largest party, led by Prime Minister Vladimir Putin – that has sprung up in the city of Izhevsk.

“We have discussed this issue with lawyers and found that there is no direct legal path to liquidate United Russia, but in places it’s possible to set up organizational structures in case they violate the law,” Ponomarev explained.

The activists say they wish to hold rallies to this end on a regular basis but not latch onto a specific date.

“Our task is to unite the forces of all those who are dissatisfied with the political system that has been created and who are prepared to take control of future elections,” Ponomarev added.

According to Kasparov.ru, 1200 people gathered at a rally in Izhevsk on March 19 to support a ban on United Russia. At the end of the rally, participants issued a call for “the citizens of Russia” to begin a national campaign on April 9 to ban the party.

Until October 2010, Strategy 31 rallies in Moscow were organized by Moscow Helsinki Group head Lyudmila Alexeyeva, Left Front representative Konstantin Kosyakin, and Other Russia party leader Eduard Limonov. For more than a year, the city refused to sanction the rallies and instead proposed alternative locations that would have isolated the protests from public view. The group split apart after Alexeyeva reached an agreement with city authorities to obtain sanction for a rally on Triumfalnaya Square with a limit of 800 participants. Limonov and Kosyakin insisted that no such limits should be imposed, and since then dual rallies have been held on the square on the 31st of each date – one sanctioned and one not.

Earlier this month, Alexeyeva announced that she and other human rights activists would be holding their sanctioned Strategy 31 rally on Pushkin Square, separate from Limonov’s. “We think that there will be more participants at a rally on Pushkin Square,” Alexeyeva said at the time. “In addition, we don’t want for there to be any confrontation.”

March 30, 2011, 9:02 p.m. EDT

Kremlin Takes Aim at Rosneft Chairmanhttp://www.marketwatch.com/story/medvedev-orders-politicians-to-leave-boards-2011-03-30

By Jacob Gronholt-Pedersen

MOSCOW—The Kremlin's campaign to oust government officials from the boards of major state-controlled companies looks likely to claim its highest-profile victim yet—Igor Sechin, Russia's oil czar and chairman of oil giant OAO Rosneft.

Russian President Dmitry Medvedev called Wednesday for the government to replace ministers and other senior officials in major state companies with independent directors before the middle of the year.

According to Russian news reports, Arkady Dvorkovich, the president's economic adviser, pointed to Mr. Sechin as one of those who should step down from his corporate post. Mr. Sechin is Russia's deputy prime minister in charge of energy issues.

A spokesman for Rosneft and Mr. Sechin declined to comment, but said the issue hasn't been discussed within the company. Rosneft will hold its annual shareholder meeting on June 10.

The Kremlin's push is part of an effort to improve Russia's investment climate and corporate governance amid a $35 billion privatization program that includes selling stakes in state giants such as Rosneft and Russia's biggest banks, OAO Sberbank and OAO VTB Group.

The 50-year-old Mr. Sechin, a longtime aide to Prime Minister Vladimir Putin, is viewed as one of Russia's most powerful men and most prominent hardliners. Should he be forced to leave Rosneft, it could have a major impact on the oil producer, which is one of the world's heavyweights, with output exceeding 2.5 million barrels a day.

Rosneft's ascent to the top of the Russian oil industry came after Mr. Sechin took charge and the company bought the main production assets of OAO Yukos, once Russia's biggest oil company. Yukos was driven into bankruptcy after its main shareholder Mikhail Khodorkovsky was arrested and the company was hit with billions of dollars of claims for back taxes.

If Mr. Sechin is forced to leave Rosneft's board, its potential loss of political influence could be bad news for BP PLC. Mr. Sechin was personally involved in talks in which Rosneft agreed to a $16 billion share swap and Arctic development deal with the British oil giant in January. The fate of that deal, however, remains in limbo after BP's billionaire partners in Russian joint venture TNK-BP managed to block it. Industry watchers said a collapse of the deal would be viewed as a defeat for Mr. Sechin.

Rosneft recently signed exploration deals with major U.S. oil companies ExxonMobil Corp. and Chevron Corp.

Russia's government has been criticized for increasing its role in the economy, leading to lower corporate governance standards at state companies. "The state is trying to be a better businessman than the companies themselves," Mr. Medvedev said at a meeting on modernizing the country's economy.

Mr. Medvedev himself served as chairman of state gas giant OAO Gazprom for seven years until he was elected president in 2008, and was succeeded as chairman by another deputy prime minister, Viktor Zubkov.

Finance Minister Alexei Kudrin, also a deputy prime minister,currently sits on the supervisory board of banks Sberbank and VTB

Deputy finance minister to lead markets watchdog

http://www.bne.eu/dispatch_text14625

bneMarch 31, 2011

The Finance Ministry looks set to take over a post central to development of Russia's capital markets and investment potential, with deputy finance minister Dmitry Pankin confirmed as the new head of the Federal Service for Financial Markets, according to various mead reports, although official sources have refused to confirm that current head Vladimir Milovidov has resigned.

However, an unidentified source in the Finance Ministry told Reuters on Wednesday: "[Pankin's] candidature has been accepted." Various media report that Prime Minister Vladimir Putin accepted the resignation of Milovidov the same day.

As the recovery gathers pace, and oil prices rage, Pankin's direct boss, finance minister Alexei Kudrin is once more leading a fight to impose a liberal agenda upon the Russian economy. Control over the FSFM will not hurt that quest, although neither is it central to macro-economic policy.

As watchdog over the financial markets, as well as the insurance industry starting this month, the FSFM is a vital cog in President Dmitry Medvedev's aim of establishing Moscow as one of the world's financial hubs.

PRESS DIGEST - Russia - Mar 31http://af.reuters.com/article/energyOilNews/idAFLDE72U0CO20110331

Thu Mar 31, 2011 7:08am GMT

MOSCOW Mar 31 (Reuters) - The following are some of the leading stories in Russia's newspapers on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- The son of Russian Prosecutor General Yuri Chaika will be questioned as a witness by prosecutors in the investigation into gambling and blackmailing cases, the daily writes.

- Italian carmaker Fiat (FIA.MI) asked Russian state bank VEB to invest 1.6 billion euros ($2.25 billion) in a Russian plant to produce 300,000 cars per year, the daily reports.

- Russian internet investment firm DST Global invested around $1 billion in China's largest online shop 260buy.com, the paper reports.

VEDOMOSTI

www.vedomosti.ru

- Russian President Dmitry Medvedev called for a reduction of social taxes for all businesses to 26 percent from 34 percent, the paper writes.

- Russia's gas monopoly Gazprom (GAZP.MM) may pay out at least 63.8 billion roubles ($2.23 billion) in dividends for 2010, the daily says.

NEZAVISIMAYA GAZETA

www.ng.ru

- The repair of a one-kilometer stretch of road in Russia costs five times as much as that of a road in Finland, the paper writes citing World Bank report.

NOVYE IZVESTIA

www.newizv.ru

- Russia's state atomic agency Rosatom plans to invest 400 billion roubles ($14 billion) in the development of a nuclear sector in the next 10 years, the daily writes.

IZVESTIA

www.izvestia.ru

- The number of crimes committed by women in Russia in 2010 grew 60 percent compared to 1997, the daily says.

Russian Press at a Glance, Thursday, March 31, 2011http://en.rian.ru/papers/20110331/163297867.html

08:36 31/03/2011

POLITICS

“Russian leaders did everything to destroy the USSR” - interview with former Soviet foreign minister Eduard Shevardnadze. (Moscow News)

Russia and Abkhazia may face a territorial dispute. A meeting on delimitation and demarcation of borders between the neighbors on Wednesday revealed disagreements on the issue. (Kommersant)

President Dmitry Medvedev will base the thrust of his 2012 election run on support of investors, rather than on increasing spending in social sphere. (Vedomosti) 

The Council of Europe may pressure Russia on gay rights, following a probe into blatant cases of homophobia in the country. (Moscow Times)

ECONOMY

President Dmitry Medvedev criticized on Wednesday Russia's poor business climate and ordered improvements, including a cut in social tax and the ousting of ministers from corporate boards. (Kommersant, Moscow Times, Rossiiskaya Gazeta)

Shareholders of Russia’s energy giant Gazprom this year may receive the highest dividends in history of the company despite a 42% decrease in net profits in 2010. (Kommersant, Vedomosti)

The World Bank said Wednesday Russia’s improved social spending last year resulted in reducing poverty and unemployment rates. However, “the country is facing a risk of returning to "the oil curse" with high oil prices resulting in "unjustified government expenditures, especially in the pre-election time. (Moscow Times, Rossiiskaya Gazeta, Izvestia)

TERRORISM

Police have identified the body of a personal doctor of infamous Chechen warlord Doku Umarov among the militants killed in a recent raid on a terrorist base in southern Russia. (Kommersant)

CRIME

Russia’s Investigative Committee said that it would question the son of the prosecutor general in connection with an illegal gambling case, significantly raising the stakes in an ongoing turf war between investigators and the Prosecutor General's Office. (Kommersant, Vedomosti, Moscow Times)

Russia has been forced to build a number of female penal colonies after registering a 25% rise in the number of crimes committed by females in the past five years. (Izvestia)

SPORTS

Sports authorities in Russia have failed to stimulate athletes in national teams to show better performance. Despite high financial incentives, Russian athletes continue to show poor results in international competitions. (Moscow News) 

Stars honour Gorbachev at London charity galahttp://in.reuters.com/article/2011/03/31/idINIndia-56010720110331

7:20am IST

LONDON (Reuters) - Movie stars, singers and politicians turned out on Wednesday at a gala concert in London to honour former Soviet President Mikhail Gorbachev as he celebrated his 80th birthday earlier this month.

The glitzy red carpet affair, co-hosted by U.S. actress Sharon Stone, underlined the celebrity status Gorbachev enjoys in the West, where is widely perceived as the man who freed Eastern Europe from Soviet rule and ended the Cold War.

Oscar-winning actor Kevin Spacey, also a host, traced a direct line from Gorbachev to recent political upheaval in the Middle East and northern Africa.

"I think you could look around the world now and you see that there are still people fighting for freedom and there is kind of a direct line to Mikhail Gorbachev," Spacey told Reuters.

"And yet I don't think he's gotten the kind of due, or kind of respect or kind of adulation that I think he deserves. So (I'm) very happy that tonight people are going to take the time to pay tribute to him, celebrate his birthday."

Attitudes in Russia to the 1990 Nobel Peace laureate are more ambivalent, with many people lamenting the collapse of the Soviet Union and laying blame for the resulting economic hardships on Gorbachev.

"To me, he is a good-for-nothing man," said Sergei Orlov, a 53-year-old Moscow lawyer, told Reuters on March 2 when Gorbachev turned 80.

Gorbachev "simply betrayed his people, he destroyed the mechanism of the state and sold his country for nothing".

But he also enjoys star status in Russia, and met President Dmitry Medvedev on his birthday.

An exhibit dedicated to the end of the Soviet Union was on display in his honour near the Kremlin, and much fanfare was made of the anniversary on state television.

Medvedev also awarded Gorbachev Russia's top medal, calling it "a fitting evaluation of the big work you did as head of state" -- but, in a careful nod to Gorbachev's bitter critics, said that work "can be assessed in different ways".

The musical gala in London featured performances from Bryan Ferry and Shirley Bassey as well as leading Russian composer Valery Gergiev, and raised funds for the Gorbachev Foundation and Macmillan Cancer Support.

Actor-turned-politician Arnold Schwarzenegger was also expected to attend, as was former British Prime Minister John Major and Israeli President Shimon Peres.

(Reporting by Mike Collett-White and Douglas MacLaurin)

March 31, 2011 10:21

Dissident Bukovsky sees worst Soviet-era traditions in London court's refusal to arrest Gorbachevhttp://www.interfax.com/newsinf.asp?id=232879

MOSCOW. March 31 (Interfax) - Well-known Russian dissident Vladimir Bukovsky will seek the issuance of an order to arrest the first Soviet president, Mikhail Gorbachev, Ekho Moskvy radio said on Thursday.

The City of Westminster's Magistrate Court on Wednesday turned down Bukovsky's request for the arrest and questioning of the former Soviet leader and Bukovsky's representatives will appeal this decision on Thursday.

Bukovsky claimed that the court had made its decision behind closed doors "in the worst traditions of the Soviet-era 'telephone law.' The judge refused to issue a resolution on Gorbachev's arrest, saying that he is Russia's official representative, he said.

Bukovsky wants Gorbachev to be prosecuted for his orders to suppress anti-Soviet manifestations in 1989-91, when the Soviet army was set against civilians in Tbilisi,

Baku and Vilnius. As a result, more than 00 people were killed and at least 2,000 wounded.

Gotrbachev is currently in London where the presentation of the Gorbachev Foundation's special achievements award, "Man Who Changed the World," was held.

One year on from Moscow bombing

http://www.abc.net.au/7.30/content/2011/s3178098.htm

Australian Broadcasting Corporation

Broadcast: 30/03/2011

Reporter: Norman Hermant

It has been a year since the Moscow Metro was hit by a terrorist attack, carried out by the so-called Black Widow suicide bombers. The ABC's Moscow correspondent travelled to the village home of one of the bombers to speak to her father.

TranscriptLEIGH SALES, PRESENTER: It's a year since Russia was rocked by a deadly terrorist attack carried out by the so- called "black widow" suicide bombers.

Two women carried bombs onto the Moscow metro, killing 40 people.

Little's known about their lives, but both are believed to have been married to Islamic militants murdered by security forces.

Moscow correspondent Norman Hermant travelled to Russia's most violent republic, Dagestan, to the remote home village of one of the female bombers to speak to her father.

NORMAN HERMANT, REPORTER: One year ago this 28-year-old teacher with degrees in mathematics and psychology strapped 1.5 kilograms of TNT to her body and boarded Moscow's metro during the peak hour commute. When her bomb exploded, 26 people were killed.

Mariam Sharipova was one of two bombers to strike the metro that morning.

Her story begins in a land of drab post-Soviet towns and stunning vistas. She was from Dagestan, a violence-plagued Russian republic in the north Caucasus, bordering Chechnya.

Predominantly Muslim, Islamic insurgents carry out more attacks here than in any other part of Russia. They operate from the mountains and from remote villages that can only be reached by treacherous roads, often impassable in winter.

It's in one of these villages that we meet Mariam Sharipova's father, Rasul. Not long after the bombing, he saw a picture of the head of the one of the suspected suicide bombers. He recognised his daughter immediately.

RASUL MAGOMEDOV, FATHER (voiceover translation): What kind of reaction do you expect when a human sees in front of himself the head of his daughter, all in wounds? What kind of reaction? What to describe? What to say?

NORMAN HERMANT: For almost a year he says he's thought every day about what his daughter did and why.

RASUL MAGOMEDOV (voiceover translation): She was clever, she was perceptive, she processed all this information inside herself. She was not quite an open person. That's her upbringing. She started being concerned.

NORMAN HERMANT: After college, Mariam returned to this village, Balahane, to be a teacher. Like many young Dagestani Muslims, her beliefs were becoming more radical.

The family says she destroyed all pictures of herself and she's believed to have secretly married an insurgent who was later killed. It's suspected another militant ordered her suicide mission. Her father still says it was an honourable way to die.

RASUL MAGOMEDOV (voiceover translation): Why are people, for the sake of an idea, inspired by a person, prepared to go to death? Why is it not allowed to go there for the sake of Allah when you are promised a paradise? These authorities do not want to understand that, and in the entire world, rulers do not understand.

NORMAN HERMANT: There were nearly 120 insurgent attacks in Dagestan last year, but the Government has a simple message: it won't back down. The republic's first deputy prime minister oversees the campaign to cut off the flow of new recruits to the militants.

RIZVAN KURBANOV, FIRST DEPUTY PM, DAGESTAN (voiceover translation): Someone is trying to impose an idea on them that here, Islam is being persecuted. They try to impose an idea that Muslims are violated here by someone, by certain occupiers.

NORMAN HERMANT: Mariam Sharipova was far from the first person from this village to fall under the influence of Islamic militants. Small and isolated, Balahane has a reputation for producing Islamic fighters. Russian security forces regard this place as a nest of militants and villagers say they are treated accordingly.

Painted in the village are the signs of the resentment brought by the heavy hand of the security forces, the names of fallen insurgent leaders.

Svetlana Iseyava works with a group that tries to track the scores of young men who routinely disappear. Human rights workers say many are rounded up by the Government as suspected militants, detained, tortured, sometimes killed.

SVETLANA ISAEVA, 'MOTHERS OF DAGESTAN' (voiceover translation): One has just to approach this problem with understanding and it is required that our government should pay attention to the residents of Balahane. The federal forces should not perform raids here using columns of weaponry. One should just work with the people.

NORMAN HERMANT: For years Russia has tried to eliminate Islamic insurgents here by force and the insurgency only grows stronger.

Mariam Sharipova's father says it's time for a new strategy for the Government.

RASUL MAGOMEDOV (voiceover translation): Change your attitude and that's it. Nothing else is required. The tanks are not wanted, neither are Army personnel carriers, no bombing required - all these expenses are not required. Just change your attitude to the people and finally reach an agreement.

NORMAN HERMANT: But no-one believes the insurgent's main demand, a separate Islamic state in the north Caucasus, is up for negotiation and the Government seems convinced the so-called "black widow" suicide bombers from Dagestan will soon be a thing of the past.

RIZVAN KURBANOV (voiceover translation): Preventative work is being done in the sense of seeking personalities who strive to recruit our women compatriots and I assure you we have achieved serious results. I believe we shall shortly eradicate this evil.

NORMAN HERMANT: That confidence isn't shared in Balahane and the other remote and increasingly devout Islamic villages of Dagestan.

LEIGH SALES: Norman Hermant reporting from Russia.

The US-Russia Space Race: An exercise in Cold War brinkmanship http://www.telegraph.co.uk/science/space/8416551/The-US-Russia-Space-Race-An-exercise-in-Cold-War-brinkmanship.html

The world's only two superpowers - the US and USSR - spent decades trying to outdo one another in the conquest of space. By Andrew Osborn, Moscow 6:30AM BST 31 Mar 2011

Here are the key moments:

October 4, 1957: The Soviet Union launches the world's first satellite, Sputnik 1, stunning the United States November 3, 1957: The Soviet Union puts the first animal in space, a dog called Laika who orbits the Earth but dies in the process.

January 1, 1958: America successfully launches its first Earth satellite.

October 1, 1958: America sets up the National Aeronautics and Space Administration or NASA.

September 12, 1959: The Soviet Union launches the first spacecraft, Luna 2, to reach the surface of the Moon.

August 19, 1960: The Soviet Union launches a spacecraft carrying two dogs, Belka and Strelka. The two dogs survive the mission and return to Earth, paving the way for the first manned space flight.

April 12, 1961: Yuri Gagarin becomes the first human to journey into outer space orbiting the Earth once in a flight that lasted 108 minutes.

May 5, 1961: America's Alan Shepard completes a suborbital journey into space.

February 20, 1962: America's John Glenn orbits the Earth three times.

June 16, 1963: Cosmonaut Valentina Tereshkova becomes the first woman to travel into space.

January 27, 1967: America's Apollo 1 Moon mission ends in tragedy as it catches fire during a launch test killing three crew members.

July 16, 1969: America's historic Apollo 11 mission lands on the Moon.

July 20, 1969: America's Neil Armstrong becomes the first human to walk on the Moon.

November 17, 1970: The Soviet Union lands a remote-controlled robot on the Moon in another world first. America does the same the following year.

April 19,1971: The Soviet Union launches the first space station, Salyut 1.

April 12, 1981: America launches its first Space Shuttle in orbit.

1986: The Soviet Union launches what will become the first permanently-manned space station. Mir. It is permanently manned from 1989-1999 but decommissioned in 2001 by Russia which is struggling to fund what is left of the Soviet space programme.

National Economic Trends

World Bank Sees Poverty Down, Inflation as Biggest Risk http://www.themoscowtimes.com/business/article/world-bank-sees-poverty-down-inflation-as-biggest-risk/434103.html

31 March 2011By Irina Filatova

The government's social spending measures appeared to bear fruit last year, resulting in declining poverty rates, although Russians are likely to face additional inflationary pressure ahead of the 2012 presidential elections, the World Bank said Wednesday.

The government should focus on controlling inflation in the short term, as the growth of budget expenditures is possible due to upcoming elections and preparations for the Sochi Olympics in 2014, the bank warned in a report.

"The upside risks for inflation, associated with additional fiscal spending during the election cycle, will remain in 2011 and 2012," the report said.

According to the report, the government's economic policy should be aimed at "a more ambitious fiscal adjustment and a long-term non-oil fiscal deficit of about 4.3 percent of gross domestic product," as the budget remains vulnerable to a sudden decline in oil prices.

Zeljko Bogetic, the World Bank's leading economist for Russia, said efficient budget policy was crucial, since the Russian economy largely depended on oil prices.

The country is facing a risk of returning to "the oil curse" with high oil prices resulting in "unjustified government expenditures, especially in the pre-election time," he told reporters at the bank's Moscow office.

The government should reduce the budget's vulnerability to new spending by cutting the non-oil fiscal deficit, which currently stands at a very high level of 12.7 percent of GDP, Bogetic said, adding that the government's current plan to reduce the budget deficit was "reasonable."

The World Bank supports the Finance Ministry's recent initiative to put additional revenues coming from the oil and gas sector in reserve as a measure to lower inflation rates, said World Bank economist Sergei Ulatov.

"We support this decision because it's aimed to fulfill two tasks — first to lower inflation rates and second not to cause additional expenditures," Ulatov said.

Finance Minister Alexei Kudrin said earlier this month that part of the additional revenue coming from the oil and gas taxes and duties would be used to lower the budget deficit and increase the reserve fund, which now stands at just 2 percent of GDP.

The reserve fund decreased almost 50 percent over the last year, having reached $26 billion by March 1, compared with $59 billion in March 2010, according to the Finance Ministry's web site.

Inflation stood at 8.8 percent in 2010, while the Central Bank expects that it will drop to 6 percent to 7 percent this year.

"Inflation is Russia's main problem in the short term," Bogetic said.

He said inflation was not only a macroeconomic problem but a social one as well, because it resulted in serious pressure on real incomes for the middle and lower class.

According to the report, food prices jumped by 17.5 percent in June to February largely because of last summer's severe drought.

Low-income households were most affected by the surge in food prices, which caused a 5 percent drop in consumption, the report said.

However, the government's social support measures, which included increasing pensions and wages in the public sector as well as unemployment benefits, resulted in the percentage of the population living below the poverty line falling from 13.2 in 2009 to 12.7 last year, it said.

An impoverished person, according to the government figure, is anyone earning less than 5,902 rubles ($208) per month.

Prime Minister Vladimir Putin said late last year that the government had no intention to trim social spending.

The government will increase pensions by 10.3 percent starting Friday, with a total of 20 billion rubles ($700 million) being set aside in the Pension Fund's budget.

The World Bank expects a further decline of the poverty rate, which is likely to reach 11.2 percent this year and 10 percent in 2012 due to the positive economic growth rates and falling unemployment.

The bank lowered its forecast of economic growth rates in 2011 to 4.4 percent, compared with last year's prediction of 4.5 percent.

Bogetic said cutting inefficient expenditures was one possible way to reduce budget spending and prevent inflation growth. Additional funds, which will appear as a result of the move, could be used to finance "priority infrastructure projects," he said.

Upgrading transport and road infrastructure will require significant budget spending, while the funds currently appropriated for these purposes are not sufficient, the World Bank said.

The government plans to spend a total of 644 billion rubles on upgrading transportation infrastructure this year, with 453 billion rubles being spent on road maintenance.

"According to estimates, the proposed funding levels for the road sector by 2013 will narrow –– but not eliminate –– the funding gap for maintenance of the federal highway system," the World Bank reported.

According to the bank, poor infrastructure is a key factor constraining economic competitiveness.

Improving the country's investment climate is one of the crucial tasks for the government for the coming years, Bogetic said.

"It's not a problem of one sector. It requires the government's highest attention and the attention of state agencies in charge of developing small and medium business, as well as the issues of investment climate in general," he said.

Russia grows on oil, lacks business climate – WBhttp://in.reuters.com/article/2011/03/30/idINIndia-55994720110330?type=economicNews

Wed, Mar 30 2011

By Andrey Ostroukh

MOSCOW (Reuters) - Russia is recovering well from the financial crisis thanks to strong oil, but high commodity prices pose risks to inflation and fiscal stability, and a poor investment climate puts a drag on growth, the World Bank said.

The government must resist the temptation to go on a pre-election spending splurge, while the central bank should press on with increasing rouble flexibility even if it means allowing sizeable currency appreciation, it said on Wednesday.

The World Bank cut its forecast for 2011 gross domestic product growth to 4.4 percent from 4.5 percent in November's report, and forecast a slowdown to 4.0 percent in 2012.

"The pace of economic growth (in Russia) in 2011 and 2012 could be constrained, and growth will depend on sustained gains in consumption and the rate of recovery with respect to longer-term credit to the private sector," the World Bank said.

Downside risks are associated with the economy's dependence on highly volatile oil prices, which could at any time retreat from current lofty levels above $100 a barrel.

The current level of oil prices also poses upside risks to 2011 inflation, which the World Bank sees at 8-9 percent compared with the government's forecast of 6-7 percent.

Zeljko Bogetic, the World Bank's lead economist for Russia, told a conference in Moscow that an "oil curse", where export prices reduce the fiscal deficit but the non-oil deficit remains high, may again affect Russia. He said that authorities need to take advantage of current strong prices to prop up the budget.

Upcoming elections -- parliamentary polls in December and a presidential vote in March 2012 -- may spur more budget spending on the back of strong oil, which could push up inflation.

"There is no room for complacency," the report said.

"Macroeconomic policy should focus on the short-term objective of controlling inflation and medium-term fiscal adjustment towards (a) long-term, sustainable level of non-oil fiscal deficit."

If prices for oil remain strong, the central bank could face "a difficult trade-off" between allowing flexibility in the rouble rate and more active interventions in the market to smooth excessive volatility while pushing up inflation.

"A more flexible exchange (rate) regime has served Russia well in recent years, and it should be maintained, especially given the potential of new speculative inflows associated with high oil prices and carry-trade activities," the World Bank said.

POOR COMPETITIVENESS

Investment demand is expected to be the main driver of economic growth during the first half of 2011, with private consumption then picking up in the second half of the year.

Russia still lags many of its peers in terms of competitiveness of the business climate, however.

Russia's economic growth is on the right track of substituting the export-related impetus with domestic consumption but in the longer run "a substantial improvement in the investment climate is important," said Bogetic.

"The first thing that has to be done is the entry into the World Trade Organisation (WTO)," said Sergei Ulatov, an economist at the World Bank.

Russian president Dmitry Medvedev said earlier this month that entry into WTO could be finished by the end of the year.

According to the Global Competitiveness Index calculated by the World Bank, Russia occupies 33rd place in a list of 35 OECD states and has the weakest position among the BRIC bloc that also includes Brazil, India and China.

Russia "scores best on basic requirements ... and poorly on the innovation and sophistication factors", the index shows.

The data suggest that "although it is difficult to start a company in Russia, it is especially challenging to keep a company running.

"Improving investment climate conditions in Russia is a top priority for the government," the World Bank said.

(Reporting by Andrey Ostroukh)

Russia sees gas windfall after Japan quakehttp://af.reuters.com/article/energyOilNews/idAFLDE72T1K820110330

Wed Mar 30, 2011 1:52pm GMT

* Russia aims to recapture Europe market as Japan draws gas

* Japan emerges as China's possible rival for Russia gas

* Price boost from Japan, Libya masks Russian weakness

By Camila Reed and Melissa Akin

LONDON/MOSCOW, March 30 (Reuters) - When radiation began to waft over the Pacific from Japan's earthquake-damaged Fukushima nuclear power plant, Russia's energy industry quietly sensed a windfall.

Russia, with energy resources to spare, is seen by analysts as among the best placed global gas powers to profit long term from Japan's energy supply shortfall.

"The question marks raised over the future of nuclear energy also make gas a much surer option ... playing to Russia's advantage," Thierry Bros, senior gas & LNG Analyst at Societe Generale, told Reuters Insider television.

"So the first one that's benefitting from this is Russia, is Gazprom."

Japan's supply gap could amount to 5 billion cubic metres in 2011, and a further 2 bcm the following year, SocGen estimates.

That gap could provide relief, for now at least, for one of Russia's most intractable energy problems: flagging European demand for gas sold by export monopoly Gazprom.

Sales in Russia's most lucrative export market slumped after the 2008 crisis as Europe's economies contracted and consumers switched to cheaper alternative supplies, pressuring the link to oil prices written into Gazprom's long-term supply contracts.

Even if Japan's nuclear disaster fails to scare European countries away from nuclear power, it may help Russia fight the biggest spoiler for Gazprom in Europe: super-cooled liquefied natural gas (LNG) from exporters such as Qatar.

Russian Premier Vladimir Putin quickly stepped in with a fix aimed at helping to restore both Japan's energy supplies and Gazprom's dominance in Europe.

Putin offered Europe extra supplies through its network of export pipelines, allowing LNG suppliers to send their cargoes to Japan instead and enabling Gazprom to fill the gap.

The European Union has said the offer should be considered on a commercial basis, but Russian and European gas industry executives say it could make sense.

And if that comes to pass, Gazprom -- wary of Europe's competitive gas markets and struggling to defend its long-term supply contracts -- could even enjoy a price-setting role on the spot market.

EASTERN APPROACHES

For now, Russia can act only through Europe, which is linked to its West Siberian production base by the umbilical cord of its westward-facing pipeline network.

But the world's largest energy producer has energy reserves to spare almost within sight of Japan off of the Pacific island of Sakhalin. It has more gas in eastern Siberia, and has been waiting for the right moment to start developing those resources for Asia.

Industry sources say the Fukushima disaster could serve as a catalyst for new export corridors to the east, either via new pipelines or new LNG projects, although these projects would take up to a decade to complete.

"There is a realisation within Gazprom, within other Russian oil and gas companies, that China is the biggest game in town," Chatham House analyst Charles Emmerson said.

"A few years ago the idea of producing LNG, particularly in the Russian Arctic, was that it would be exported to the United States. Perhaps now that would be exported to China instead."

Beijing, which has driven a hard bargain with Moscow in price talks on future gas deliveries, must now confront the prospect of Russia's eastern energy riches going to its Pacific neighbour and rival for resources.

"There is not a speedy solution," said Alistair Ferguson, executive vice president for gas development at Russia's No. 3 oil company, TNK-BP. "But the environment is now better than it has been in the last 10 years."

POLITICAL WINDFALL

The Fukushima shutdown, combined with the loss of Libya's energy exports as a rebellion engulfs the North African energy exporter, is also a political windfall for the Kremlin a year before a presidential election.

In combination, they have sustained oil prices over $100 per barrel, helping the government towards a balanced budget and leaving room to hike spending as the March 2012 poll approaches.

But they also threaten to bolster Russia's political and economic weaknesses for a little longer.

The World Bank on Wednesday warned that oil is driving Russia's economic recovery but fuelling inflation, while a poor investment climate is dragging down growth.

"While the Middle East and the post-Fukushima fallout are going to boost the attrractiveness of Russian national resources, especially gas, Russia needs to do more to insure investors' rights and the rule of law," said Ariel Cohen, senior research analyst at the Heritage Foundation in Washington. (Writing by Melissa Akin; editing by Douglas Busvine and Jason Neely)

Filling the pillars with concrete: Medvedev demands progress in economic planhttp://www.bne.eu/dispatch_text14625

bneMarch 31, 2011

Is he actively on the campaign trail, or shoring up his defences? Either way, President Dmitry Medevedev went on the warpath over economic issues yesterday, and called for concrete measures to push his modernization drive forwards, including nailing down the privatization programme and pushing state officials out of the boardrooms of companies. The move sees the president pushing to fill the second of the twin pillars of his presidency with concrete.

Speaking at a modernization and technological development commission meeting on Wednesday, Medvedev again condemned the investment climate. "I have already given

my opinion on the investment climate in this country -- it is very bad ... Corruption remains a factor," Medvedev complained.

He then went on to order concrete measures, including a fixed schedule for the country's privatization programme. "To avoid excessive influence of state-run companies on investment climate, we have to do three things. First of all, we have to fix and finally announce the privatization schedule for large stakes for the next three years," Medvedev said, according to RIA Novosti.

Although a three to five year privatization plan to reduce the state's involvement in the economy via ownership of its biggest companies was announced in late 2009, only one major company - VTB - has so far gone to the market. Whilst market conditions have clearly delayed more rapid progress, various factions have been trying to run their own agendas. Whilst a list of businesses to be privatized has been announced, there is no more specific timetable, and many conflicting statements continue to appear from within ministries and the companies.

In the face of this resistance, the president also ordered that ministers be replaced by independent representatives on the boards of state companies by mid-year. "Secondly, we have to eliminate the practice where government officials, I mean those responsible for regulating rules in individual sectors, are board members at companies which operate in a competition environment," Medvedev said. He also demanded that large state-controlled companies publish information on planned purchases, including their price, and information on closed contracts.

Senior government figures sitting on major company boards include Finance Minister Alexei Kudrin at VTB, Deputy Prime Minister Igor Sechin at Rosneft, and Economy Minister Elvira Nabiullina, Energy Minister Sergei Shmatko and First Deputy Prime Minister Victor Zubkov at Gazprom, Reuters reports.

The president also called for social taxes for businesses, which were raised from 26% to 34% at the start of the year, to revert to the lower figure. "The rate of 34% can be unbearable for many sectors," Medvedev said. "I am going to order the government to establish mechanisms that would reduce the rate starting Jan. 1, 2012." The Kremlin's top economic aide, Arkady Dvorkovich, said reversing the hike could cost the budget as much as RUB500bn ($17.5 billion).

The president's orders for the business and investment sphere came just two days after he launched an assault on the political world. On Monday he pushed for officials to carry out his orders more efficiently, and demanded new legislation to fight corruption - which has been his main political project during his presidency.

Meanwhile, the privatization drive is at the heart of the modernization drive. In other words, the presidential focus is clearly on the twin pillars that define the Medvedev presidency thus far. It suggests that the president is confident and in rude political health ahead of the election next year.

VTB Capital writes: This is a concrete list of actionable objectives with hard deadlines and we believe it squares with (or rather provides support for) our long-held view that the risks to the quality of policy for the coming years are on the upside, as over the past 9-12 months the country's top leadership has come to the understanding of the deficiencies and limitations of maintaining the status quo (and the downside risks to growth stemming from it). Equipped with this list of objectives, we now have a yardstick to measure both progress and execution capacity in the coming months. Success would mean a major boost to Russia's investment case; at the individual stock level, we see Gazprom and Transneft prefs being aided most significantly.

Fight over economic policy expanding as oil prices rage onhttp://www.bne.eu/dispatch_text14625

bneMarch 31, 2011

Rising government spending ahead of national elections risks antagonizing Russian inflation this year, says a new report from the World Bank, as it weighs into the debate over macroeconomic policy that the windfall from high oil prices is accelerating.

With unrest continuing in the Middle East and North Africa, Russian revenue from energy exports is spiking far above expectations in 2011. That only provoking a bigger fight amongst officials over the best economic strategy. Whilst finance minister Alexei Kudrin has revived his decade long campaign for prudence, he is likely to be overpowered by demands to spend ahead of elections to the Duma at the end of this year, and 2012's presidential vote.

Kudrin admitted last week that he is under "strong" pressure to increase spending ahead of the elections, whilst earlier this week, his liberal ally, central bank chairman Sergei Ignatyev, hit out at suggestions from an experts panel put together by Prime Minister Vladimir Putin that the country should run a budget deficit and raise borrowing over the next decade, despite the unanticipated windfall from oil exports. Work on the 2012 budget has recently started.

The World Bank weighed into the debate on Wednesday, with a report that suggested consumer prices are set to rise 8-9% this year, even whilst it lowered its GDP growth forecast by 100 basis points to 4.4%.

"The upside risks for inflation, associated with additional fiscal spending during the election cycle, will remain in 2011 and 2012," analysts headed by Zeljko Bogetic, the World Bank's lead economist for Russia, said in the report, reports Bloomberg. Consumer-price growth won't fall below 8% this year "unless the fiscal stance is tightened."

Ignatiev said on March 29 that the CBR expects inflation to slow to between 6-7% this year, whilst an overall target of 3-5% is "achievable" within the next six years. Vladimir Mau, the co-chairman of Putin's panel, said that it is realistic to slash inflation rates to 3-5% in the short term through a more aggressive central bank policy, but claimed that inflation of 8-12% was "not catastrophic," reports Reuters.

"Inflation is Russia's main problem in the long term," Bogetic told reporters in Moscow the next day, adding that Russia may experience a return of the so-called oil curse when high commodity prices prompt "unjustified government expenditures and lower budget discipline."

The government expects the budget to remain in deficit through 2014 based on an average price for Urals crude oil, the country's main export blend, of $75 this year and $78 in 2012. Russia may balance its budget this year if oil averages about $115 a barrel, or more than 50 percent above the government's target price, Finance Minister Alexei Kudrin said on March 14.

The inflation rate rose to an annual 8.8 percent in 2010, triggered by the worst drought in at least 50 years. A surge in food prices since last summer has had an effect on Russian households equivalent to a 5 percent loss in consumption, the World Bank said in the report.

Private consumption will need to take over from investment demand as the main driver of Russian expansion in the second half as unemployment falls, according to the report.

"Growth will depend on sustained gains in consumption and the rate of recovery with respect to longer-term credit to the private sector," the World Bank said. "The downside risks associated with highly volatile oil prices and global demand will remain."

Business, Energy or Environmental regulations or discussions

Russian markets -- Factors to Watch on March 31http://af.reuters.com/article/energyOilNews/idAFLDE72U09U20110331

Thu Mar 31, 2011 6:37am GMT MOSCOW, March 31 (Reuters) - Here are events and newsstories that could move Russian markets on Thursday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to moscow.newsroom@reuters.com): Olma: The upward trend may continue today amid positive

external background, although there are no grounds for sharpmoves. Uralsib: "The mood on global equity markets remainsgenerally positive, with further gains in the US overnight andacross Asia this morning. With oil sticking close to $115/bbl,there is a positive backdrop for Moscow exchanges today." EVENTS [RU-DIA] (All times GMT): MOSCOW- The Russian government's Presidium meeting. MOSCOW- Russia's second largest steel maker Evraz (HK1q.L)to announce Q4 2010 financials. HONG KONG- Russian aluminium giant RUSAL (0486.HK) toannounce full-year 2010 results. ST PETERSBURG - Russian power generating company TGK-1(TGKA.MM) to announce full-year 2010 financials. MSOCOW- Russian gold miner Petropavlovsk Plc (POG.L) toannounce full-year 2010 results. IN THE PAPERS [PRESS/RU]: Gazprom's (GAZP.MM) shareholders may get the highestdividends in the history of the Russian gas export monopolywhich may pay between 3.82 roubles and 7.64 roubles per share,compared with 2.39 roubles for 2009, business dailies Kommersantand Vedomosti report. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:* Medvedev takes aim at state board members [ID:nLDE72T1HC] COMPANIES/MARKETS:* Fiat to invest 1.6 bln euro in Russia plant [ID:nLDE72T1UB]* Rouble at 2-wk low on Q1-end position squaring [ID:nLDE72T15K]* Steelmaker NLMK Q4 profit misses forecasts [ID:nLDE72O145]* Cherkizovo buys poultry farmer Mosselprom [ID:nLDE72T0J2] ECONOMY/POLITICS:* Medvedev takes Kremlin gamble with Putin rebuke[ID:nLDE72L07K]* Russia grows on oil, lacks business climate-WB [ID:nLDE72T0H5] ENERGY:* Russia, Belarus agree on oil deliveries [ID:nLDE72T25Z]* Russia sees gas windfall after Japan quake [ID:nLDE72T1K8]* Russia EnergyMin wants Transneft in govt hands [ID:nLDE72T25Q]* Bashneft oil reserves jump 51 pct in 2010 [ID:nLDE72T16B] COMMODITIES:* Russia sells 808,709 T grain via interventions [ID:nLDE72T1D4] MARKETS CLOSE/LATEST: RTS .IRTS 2,044.3 +0.41 pct MSCI Russia .MIRU00000PUS 1,081.3 +1.31 pct MSCI Emerging Markets .MSCIEF 1,162.8 +0.28 pct

Russia 30-year EurobondRU011428878= yield: 4.693/4.674 pct EMBI+ Russia 11EMJ 169 basis points over Rouble/dollar RUBUTSTN=MCX 28.5300 Rouble/euro EURRUBTN=MCX 40.3900 NYMEX crude CLc1 $104.54 +$0.26 ICE Brent crude LCOc1 $115.42 +$0.29 For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE]

Deripaska Utility Plans to Export Power to China, RBC Daily Sayshttp://www.bloomberg.com/news/2011-03-31/deripaska-utility-plans-to-export-power-to-china-rbc-daily-says.html

By Yuliya Fedorinova - Mar 31, 2011 7:09 AM GMT+0200

Russian billionaire Oleg Deripaska’s EuroSibEnergo utility plans to export electricity to China, RBC Daily reported, citing company data.

The utility plans to build three power stations in eastern Siberia dedicated to the Chinese market, the Moscow-based newspaper said today.

The combined capacity of the stations will be about 10 gigawatts, RBC said.

To contact the reporter on this story: Yuliya Fedorinova at yfedorinova@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

Rusal May Issue Second Tranche of Ruble Bonds by April-May

http://www.bloomberg.com/news/2011-03-31/east-europe-today-czech-pension-moves-may-aid-stock-market.html

By Douglas Lytle - Mar 31, 2011 7:53 AM GMT+0200

United Co. Rusal, the world’s largest aluminum maker, may sell a second tranche of ruble- denominated bonds in April or early May, Chief of Capital Markets Oleg Mukhamedshin said today at a media briefing in Hong Kong..

To contact the editor responsible for this story: Douglas Lytle in Prague 1 at dlytle@bloomberg.net

RUSAL 2010 net profit more than tripleshttp://in.reuters.com/article/2011/03/31/us-rusal-idINTRE72O52M20110331

7:12am IST

By Alison Leung

HONG KONG (Reuters) - Russia's United Company RUSAL Plc (0486.HK: Quote, Profile, Research), the world's top aluminum maker, said on Thursday its net profit in 2010 more than tripled, beating forecasts, and expects strong global demand for the light metal to continue this year.

"The emerging markets of China, Brazil, India and Russia will be driving the growth of aluminum consumption in 2011," RUSAL said in a statement to the Hong Kong stock exchange.

Demand in China, the world's largest producer and consumer of aluminum, is expected to rise 12 percent this year, higher than an estimated 8 percent increase in global consumption, it said.

Higher aluminum prices lifted RUSAL's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2010 by 336 percent to $2.6 billion, largely in line with a consensus $2.62 billion from 10 analysts polled by Reuters.

RUSAL posted a net profit of $2.87 billion last year, up from $821 million in 2009 and against an average forecast of $1.96 billion from 10 analysts polled by Reuters.

For the fourth quarter, it made a profit of $1.45 billion, down from $1.65 billion for the October to December period in 2009, based on Reuters calculation from full year data.

RUSAL (RUAL.PA: Quote, Profile, Research), also listed in Paris, said the average aluminum price on the London Metal Exchange rose 30.3 percent last year from 2009 and the average price of alumina, the key material for aluminum production, also gained 36.5 last year.

Increasing demand amid an economic recovery around the globe is expected to support prices of aluminum, which is widely used in the transport, packaging and building sectors.

The Russian firm forecast aluminum prices to continue to trade at the $2,500-2,600 level throughout 2011.

However, rival Aluminum Corp of China Ltd (Chalco) (2600.HK: Quote, Profile, Research) (601600.SS: Quote, Profile, Research), which returned to the black in the fourth quarter, cautioned earlier this month that the sector faced headwinds in China from high costs and excess capacity.

RUSAL planned to increase aluminum output by 2 percent in 2011 and lift alumina production by 8 percent.

Analysts said net income was volatile because of the impact from the revaluation of its 25 percent stake in metals producer Norilsk Nickel (GMKN.MM: Quote, Profile, Research).

The market value of RUSAL's stake in Norilsk Nickel increased by 66.8 percent in 2010 to $11.12 billion, the company said.

RUSAL shares closed up 0.6 percent on Wednesday and have risen by about 8 percent this year, outperforming a 1.8 percent gain by the Hang Seng Index .HSI.

(Editing by Dhara Ranasinghe)

MARCH 30, 2011, 11:48 P.M. ET

Rusal Net Profit More Than Triples http://online.wsj.com/article/SB10001424052748703712504576233620927670898.html

By JOANNE CHIU And ALEXANDER KOLYANDR

HONG KONG—United Co. Rusal PLC said Thursday its net profit more than tripled last year on higher aluminum prices and a strong contribution from 25%-owned OAO Norilsk Nickel, and the Russian aluminum giant plans to nearly double its capital spending this year to boost capacity in the face of growing aluminum demand.

Rusal Chief Executive Oleg Deripaska said in a statement the company's strong net profit growth was driven by significant increases in demand for aluminum and metal prices, and the company expects global demand for aluminium to grow 8% to 43.8 million metric tons this year.

He also said aluminum prices will likely remain in a US$2,500-US$2,600 per ton range until the end of the year, due to underlying demand and continuing weakness in the U.S. dollar.

Aluminum prices were volatile last year, ranging from less than US$2,000 per ton to as high as US$2,500 per ton, he said.

Rusal—the world's largest aluminum producer by output, which listed on the Hong Kong stock exchange in January last year—said its net profit for the 12 months ended Dec. 31 was US$2.87 billion, up from US$821 million the year before. The result was above the average US$1.91 billion forecast of five analysts polled earlier by Dow Jones Newswires.

Rusal's shares were up 2% at 13.14 Hong Kong dollars (US$1.69) Thursday morning in Hong Kong, not far from its record of HK$13.62.

The Moscow-based company's net profit included a US$2.44 billion profit contribution from Norilsk Nickel. Earnings before interest, tax, depreciation and amortization, excluding income from Norilsk Nickel, more than quadrupled to US$2.60 billion from $596 million.

Revenue rose 35% to US$10.98 billion from US$8.17 billion. The company omitted a final dividend.

Rusal, which battled a crippling debt load during the financial crisis, said it is ahead of schedule on its debt payments. Its net debt fell to US$11.5 billion in 2010 from US$13.63 billion the year before, it said.

The company also said it plans to increase its capital spending to US$692 million this year from US$367 million the year before to expand its production capacity. It added it will restart production at a plant in Jamaica and restart construction of two Russian aluminum smelters this year.

Rusal's production expansion plans have been constrained by its creditors under the terms of its debt restructuring agreement.

The company said earlier it plans to increase its aluminum production by just 2% to 4.16 metric tons this year, less than the 3% increase in 2010. It also said it plans to increase its output of alumina, a key material in aluminum production, by 8% this year, unchanged from last year, mainly due to production from its Jamaica plant.

Rusal's aluminum output in the 12 months ended Dec. 31 rose 3% to 4.08 million metric tons from 3.95 million tons the previous year, while alumina output rose 8% to 7.84 million tons from 7.28 million tons. Its bauxite output rose 4% to 11.8 million tons, from 11.3 million tons.

Like other aluminum producers, Rusal cut its output in 2009 in the face of declining demand from the automobile, real-estate and aircraft manufacturing sectors amid the global economic downturn. Demand has bounced back along with the recovery in the global economy.

UPDATE 1-Petropavlovsk FY profit dragged lower on costshttp://af.reuters.com/article/metalsNews/idAFLDE72T0MC20110331

Thu Mar 31, 2011 7:18am GMT

* Underlying EBITDA $205 mln vs $191 mln consensus

* Revenue up 30 pct to $612 mln on record output, prices

* Total cash costs $617 an ounce vs $309 for 2009

* Shares down 0.2 pct, underperforming mining index (Adds details)

LONDON, March 31 (Reuters) - Russian miner Petropavlovsk (POG.L) posted a 10 percent decline in full-year profit mainly due to the cost of spinning out its IRC Ltd (1029.HK) iron ore business and higher production costs.

Underlying EBITDA, before exceptional items including IRC, fell to $205 million, beating the $191 million consensus of eight analysts provided by the company. Revenue rose 30 percent to $612 million on record production and higher gold prices.

However, total cash costs for producing gold rose to $617 an ounce in 2010 from $538 in the first half and $309 for the whole of 2009.

The shares were down 0.2 percent at 0709 GMT compared with a 0.8 percent gain in a British mining index .FTNMX1770

Last week, the London-listed company raised its estimates for gold reserves by 36 percent and resources by 96 percent following exploration work in 2010. [ID:nLDE72L0CJ]

In January, it forecast a "conservative" 18 percent lift in gold output in 2011 because it wants to avoid disappointing investors with further downgrades. It plans to produce 600,000 ounces of gold, up from 506,800 ounces in 2010. [ID:nLDE70Q0KH]

(Reporting by Julie Crust; editing by Sarah Young)

Petropavlovsk FY10 Profit Falls - Quick Facts http://www.rttnews.com/Content/QuickFacts.aspx?Id=1587684&SM=1

3/31/2011 2:49 AM ET

On a per share basis, earnings were $0.11, significantly lower than $0.96 in the prior year period, impacted by the increase in production costs and $25.7 million of exceptional items. Excluding exceptional items, earnings per share declined to $0.25 from $0.88 in 2009.

However, Group revenue for the year ended December 31, 2010 totaled $612.02 million compared with $472.33 million in the comparable period, up 30%, due to a 1.7% increase in ounces of gold sold and a 29% increase in the average realised gold sales price.

The Group's attributable gold production for 2011 is currently estimated to be 600,000oz, representing an increase of about 18% over total attributable gold production for 2010. Group sale volumes in 2011 are also expected to exceed 600,000oz.

Click here to receive FREE breaking news email alerts for Petropavlovsk PLC and others in your portfolio

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com

Gold miner Petropavlovsk's 2010 net profit plummets 84%http://en.rian.ru/business/20110331/163299245.html

11:01 31/03/2011

MOSCOW, March 31 (RIA Novosti) - Russian gold miner Petropavlovsk Group posted an 84.1% drop in its 2010 IFRS net profit to $22.97 million, Petropavlovsk said on Thursday.

Petropavlovsk's 2010 revenues grew 30% to $612 million, the company said in a statement.

EBITDA fell 10% to $205 million, while net debt as of the end of 2010 totaled $171.1 million.

The board has recommended a $21.2 million dividend on 2010 results for the annual general meeting scheduled for May 19.

Gold output increased 4% to 506,800 ounces, while sales edged up 2% to 445,300 ounces.

Russia's Evraz may pay H1 2011 divs, no 2010 payouthttp://af.reuters.com/article/metalsNews/idAFLDE72U0K120110331

Thu Mar 31, 2011 8:20am GMT

MOSCOW, March 31 (Reuters) - Evraz (HK1q.L), Russia's second-largest steelmaker, could pay dividends on its first half earnings this year, but it will make no payment for 2010, chief executive Alexander Frolov told Reuters.

"We will not pay a dividend for 2010," Frolov said. "We do not rule out the possibility of paying a dividend for the first half of 2011."

Chief Financial Officer Giacomo Baizini added that Evraz could refinance existing debt this year, but that the company's overall debt level will not increase.

The steel maker, part-owned by billionaire Roman Abramovich earlier on Thursday beat estimates with a $532 million 2010 net profit. [ID:nLDE72U08O] (Reporting by Polina Devitt, writing by Alfred Kueppers; editing by Maria Kiselyova)

UPDATE 1-Russia's Evraz beats profit forecast, demand uphttp://af.reuters.com/article/metalsNews/idAFLDE72U08O20110331

Thu Mar 31, 2011 6:34am GMT

* Evraz 2010 profit $532 mln, Reuters forecast $149 mln

* EBITDA $2.35 bln, Reuters forecast $2.40 bln

* Sees Russian demand for construction steel rising

* Sees Q1 EBITDA at $725-800 million

(Adds details)

MOSCOW, March 31 (Reuters) - Evraz (HK1q.L), Russia's second largest steelmaker, said on Thursday it expects demand for construction steel in Russia to grow by more than 10 percent in the current year as it beat profit forecasts for 2010.

The company, part-owned by billionaire Roman Abramovich, said it swung to a $532 million net profit last year from a $1.3 billion loss in 2009 thanks to stronger steel prices and increased output.

The figure smashed the $149 million forecast for 2010 net profit in a Reuters poll of analysts. [ID:nLDE72S1DP]

Evraz also said earnings before interest, taxation, depreciation and amortisation (EBITDA) reached $2.35 billion last year, up 90 percent on 2009, and said it saw the first quarter figure coming in at $725 million to $800 million.

Steelmakers in Russia, the world's third-largest producer, are benefitting from their position as low cost producers after suffering through a difficult 2009 as global steel demand declined.

Evraz also said 2010 revenues reached $13.4 billion, up 37 percent and ahead of the $12.89 billion forecast. (Reporting by John Bowker and Alfred Kueppers, Editing by Maria Kiselyova)

NLMK targets SIF buyout

http://www.rbcnews.com/free/20110331113540.shtml

      RBC, 31.03.2011, Moscow 11:35:40.Novolipetsk Steel (NLMK) expects to exercise an option to buy out the remaining half in its 50/50 joint venture called Steel Invest & Finance (SIF) with Italy's Duferco by July and could pay less than the amount spent on the first half, RBC Daily reported today.

      NLMK is currently in talks on the deal, the steelmaker's President Alexey Lapshin said. "The price will depend on the value of the JV and investments in it," a spokesperson for NLMK said.

      According to NLMK's 2010 financial statement, the value of its investment in SIF has plummeted to $164m, whereas the 50% stake in SIF cost $805m in December 2006. The Russian company was able to write off a $641m loss from this investment.

      Despite this Lapshin said: "We are very satisfied with our investment in the joint venture with Duferco." The synergy from the Italian steel rolling facility enables NLMK to boost production of flat rolled stock, which is in great demand in Europe and America.

Russian Facebook Billionaires Buy 360buy.com Stake, IFX Sayshttp://www.bloomberg.com/news/2011-03-31/russian-facebook-billionaires-buy-360buy-com-stake-ifx-says.html

By Yuliya Fedorinova - Mar 31, 2011 7:31 AM GMT+0200

Alisher Usmanov and Yuri Milner, the Russian billionaires who control 10 percent of Facebook Inc., bought a stake in Chinese Internet retailer 360buy.com, Interfax reported, citing Chinese state media.

The Russians’ DST Group invested $500 million in the Chinese, company, the Russian news service reported from Shanghai today.

To contact the reporter on this story: Yuliya Fedorinova at yfedorinova@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

Sibirtelecom net profit up 115% to RUB 4.248 bln in 2010http://www.telecompaper.com/news/sibirtelecom-net-profit-up-115-to-rub-4248-bln-in-2010

Thursday 31 March 2011 | 09:45 CET  Russian regional operator Sibirtelecom saw its revenues from sales grow 4 percent to RUB 39.410 billion in 2010. Representing the largest share of the revenues are services of local telephony with RUB 12.480 billion (up 7 percent), ahead of services of mobile radiotelephone (cellular) communication with RUB 9.762 billion (up 1 percent), services of telegraph network, data transmission network and telematic services (internet) with RUB 6.971 billion (up 19 percent), services of intra-zone telephone communication with RUB 4.342 billion (down 11 percent), services of connection and traffic transmission with RUB 3.7 billion (up 1 percent), services of assistance, agent services with RUB 416 million (down 17 percent), services of mobile radio, wire broadcasting, broadcasting, TV with RUB 222 million (down 45 percent), other services (principal activity) with RUB 1 million (down 83 percent), and proceeds from other realisation with RUB 1.516 billion (up 10 percent). OIBDA rose 6 percent to RUB 15.180 billion, while OIBDA margin was 38.5 percent, up from 37.5 percent in the previous year. In 2010, net profit surged by 115 percent to RUB 4.248 billion, while net profit margin was 10.8 percent, up from 5.2 percent in 2009. Net debt was down 6 percent to RUB 16.542 billion, while capital investments increased 85 percent to RUB 8.034 billion in 2010.

Government may offer 30% rebate on bus purchases - Supportive for GAZ

http://www.bne.eu/dispatch_text14625

Renaissance CapitalMarch 31, 2011

Event: Today (31 March), RBC Daily reported details of the rebates to be offered under the Ministry of Transport's proposed cash-for-clunkers programme for commercial vehicles. The programme will provide rebates of RUB100,000 for purchases of medium-tonnage vehicles, RUB270,000 for heavy trucks, and about 30% of the purchase price for buses (no exact figure was provided). GAZ Group says it strongly supports the scrappage programme for buses because buses older than 15 years create a real threat to the lives of passengers.

Action: Positive for GAZ Group and KAMAZ, in our view.

Rationale: We expect GAZ Group to be the main beneficiary of the bus scrappage programme, with buses accounting for 9% of the company's 2012 sales, on our estimates. KAMAZ, as the largest player in the commercial vehicle market, will benefit from the scrappage programme for heavy trucks. KAMAZ, however, has already launched a similar programme of its own and plans to sell 3,000 trucks at an 8-10% discount this year in exchange for clunkers.

Fiat to Invest in Russia, Seeks VEB Funds: Kommersanthttp://www.bloomberg.com/news/2011-03-31/fiat-to-invest-in-russia-seeks-vtb-partnership-kommersant-says.html

By Yuliya Fedorinova - Mar 31, 2011 9:19 AM GMT+0200

(Corrects bank name to VEB in headline, third paragraph.

Fiat SpA (F) plans to invest as much as 2 billion euros ($2.8 billion) in building its own plant in Russia, Kommersant reported today, citing people familiar with the mutter.

The Italian carmaker, whose Russian partner OAO Sollers agreed a venture with Ford Motor Co. (F) in February, wants to build its own plant in the Lipetsk region of Russia to make Fiat, Jeep and Chrysler cars. The capacity of the plant may be 300,000- 350,000 cars a year, Kommersant says.

Fiat applied to state lender VEB for financing, Moscow based newspaper said.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story:

GM Readies For Russian Auto Market Adventurehttp://blogs.forbes.com/greatspeculations/2011/03/30/gm-readies-for-russian-auto-market-adventure/

Mar. 30 2011 - 12:36 pm | 434 views | 0 recommendations | 0 comments Posted by Trefis Team

General Motors sells its vehicles globally under four core brands – Cadillac, GMC, Buick and Chevrolet. Of GM’s total 2010 vehicle sales volume, 74% was generated outside the United States, including 43% from emerging markets, such as Brazil, Russia, India and China. GM’s operations outside North America contribute more than 50% to GM’s total stock value by our estimates, and an increased focus on Russia can yield significant upside to GM’s stock value. GM competes with players like Toyota, Honda, Ford, Daimler, Volkswagen and Hyundai (SEO:005380).

We have a price estimate of $45.37 for GM stock, roughly 45% ahead of the current market price.

Russian Automotive Industry

In Russia, the total industry sales volume of vehicles was about 2 million units in 2010 – an increase of 31% from 2009, largely due to government stimulus. Before that, industry sales volumes had fallen nearly 50% from about 3 million units in 2008 to 1.5 million units in 2009 as a result of the economic crisis.

Russia is becoming an increasingly important automotive market. GM enjoyed a market share of 11% in 2008, although this has declined steadily to 8% in 2010. In comparison, Ford’s Russian market share was just under 5% in 2010. We believe that the Russian automotive industry is poised for significant growth and that GM is well-positioned to exploit the opportunity to improve its market share.

New Automotive Industrial Regime to Aid Auto Market Growth

Russia introduced a new automotive industrial regime in February 2011 to lower import duties on automotive components for the next eight years for qualified automotive manufacturers. The qualification criteria in order to participate in this regime are:

1. Assembly capacity of 350,000 vehicles annually within the next three years.2. Substantial localization of component supply, including engines, stampings and

other components.3. Establishment of a research and development center.

GM Increasing Production in Russia

In March 2011, GM announced a joint venture with Russia’s Avtotor to produce at least 300,000 cars per year in Russia, using 60% local components. This will enable GM to qualify for reduced import duties and, therefore, offer competitive pricing for its products and increase sales.

GM to Benefit from Expanding Russian Auto Market

Continued growth in the Russian auto market could put Russia in position to surpass Germany (the largest auto market in Europe) in sales volume. GM’s focused global marketing strategy, better performance since its bankruptcy in 2009 and participation in the Automotive Industrial Regime will help it grow its market share in Russia and other international markets.

To illustrate GM stock’s sensitivity to the company’s international market share, we estimate that an increase in this metric of 0.15% each year beyond our base forecasts would imply a stock value of about $49.50, a 9% upside to our $45.37 price estimate.

You can test this scenario, and others, by dragging the trend line in the interactive chart above.

Altay Territory Enlisted among Russian Regions with Optimum Ecology

http://www.russia-ic.com/news/show/11867/

31.03.2011 10:45

Altay Territory has been registered among top ten regions of Russia with the best ecological situation, the public organization Green Patrol informs.            The Green Patrol’s ecological rating estimates all the regions of this country by 15 criteria, deducing the general indicators in the eco sphere, techno sphere and society, which then make up the overall rating.             Apart from Altay Territory the top ten eco-friendly regions include the Amur Region, Belgorod Region, Pskov Region, Tambov Region and Tomsk Region, as well as Altai Republic, Buryatiya, Tyva and Chuvash Republic.            At the same time there have been unexpected changes among the worst ten regions. Along with long-term outsiders, such as Sverdlovsk Region, Chelyabinsk Region, Moscow Region, Orenburg Region, and Transbaikalian Territory, in 2010 Moscow, Kalmykia, the Tula Region and Leningrad Region saw steep downfall.            Source: regnum.ru

Activity in the Oil and Gas sector (including regulatory)

Belarus and Russia Renegotiated Terms of Oil Supplyhttp://telegraf.by/2011/03/belarus-and-russia-renegotiated-terms-of-oil-supply.html

31.03 10:09

Belarusian and Russian companies have agreed on the terms of the oil revenues' distribution from processing Russian oil, shipped duty-free to Belarus. Deputy Energy Minister of Russia Sergey Kudryashov reported on March 30 that the parties had managed to agree on margin distribution at a corporate level.

Sergey Kudryashov said that the Belarusian State Concern Belneftekhim had appealed to the Russian side to reduce the amount of the premium, going to the Russian oil companies, supplying oil to Belarus. The Belarusian side considers such a move consistent with the oil price growth above $100 a barrel, as mandated by the previous agreements, RIA "Novosti" news agency.

As Telegraf previously reported, the agreement among Belneftekhim with Russian companies provides for the possibility of lowering the formula for calculating oil price premiums, if the average world quotations for Urals oil are above $100 a barrel.

Russia's Surgut 2010 net profit rises 13 pcthttp://uk.reuters.com/article/2011/03/31/russia-surgut-idUKLDE72T09620110331

6:35am BST

MOSCOW, March 31 (Reuters) - Surgutneftegas (SNGS.MM: Quote, Profile, Research), Russia's fourth-largest oil company, reported a 12.7 percent rise in 2010 net profit to 128.391 billion roubles ($4.49 billion), the company said on Thursday.

The results are to Russian Accounting Standards. Surgut is the only big Russian oil firm that does not report to international standards.

The company did not give the reason for bigger profits in 2010 when oil prices were stronger than in 2009. (Reporting by Vladimir Soldatkin; editing by Maria Kiselyova)

Rosneft sells 15pct of petroleum production through Petersburg exchange in Marchhttp://www.steelguru.com/russian_news/Rosneft_sells_15pct_of_petroleum_production_through_Petersburg_exchange_in_March/198257.html

Thursday, 31 Mar 2011

Interfax reported that Oil Company Rosneft sold 471,000 tonnes of petroleum production in March through the St. Petersburg International Commodity and Raw Materials Exchange.

Rosneft sold 63,000 tonnes of gasoline, 271,000 tonnes of diesel fuel, 24,500 tonnes of aviation fuel, 108,500 tonnes of heating fuel and 4,000 tonnes of petrochemical products and lubricants on the exchange.

The company said that 15% of its total petroleum product output was sold on the St. Petersburg exchange.

According to the draft law On Oil which is currently being reviewed by various state institutions in Russia, 15% of petroleum production should be sold through commodity exchanges. At the same time, the Russian government has made a recommendation to vertically integrated oil companies to organize the sale of at least 15% of their petroleum product output through the St. Petersburg International Commodity and Raw Materials Exchange.

(Sourced from Interfax)

Transneft: could privatisation be back on the agenda?http://www.bne.eu/dispatch_text14625

VTB CapitalMarch 31, 2011

News: Speaking at the Modernisation Committee meeting in Magnitogorsk yesterday, President Dmitry Medvedev made a number of important pro-market statements, which we consider as potentially positive for Transneft.

Our View: Medvedev suggested that control over expenditures at state-owned companies be improved. He criticised the inefficiency of state-controlled companies and urged for a minimum cost reduction of 10% per annum at, among others, Transneft, Gazprom and Russian Railways. Medvedev added that this would be a major criterion for assessing management efficiency.

In our view, privatising state-owned assets would not only fill in the budget but, in some cases, would lead to better control, including from the new owners and the investment community. Medvedev reiterated the government's intention to sell stakes in big banks and infrastructure companies and asked for a detailed privatisation schedule for the next several years.

While Transneft is formally not on the list, we do not rule out that the discussion to include it could pop up again, especially given the mounting government expenditures. Placing a 25-27% stake in Transneft could bring some USD 6-7bn of budget revenues. We believe that once the new tariff mechanism has been introduced, political resistance to the idea of privatisation will wane and the entire process could speed up.

Bashneft 2010 reserve audit confirms solid base for sustainable output http://www.bne.eu/dispatch_text14625

Troika DialogMarch 31, 2011

Auditor Miller & Lents has estimated Bashneft's reserves to PRMS standards as of December 31, 2010. The company reported the main results of the audit in a press release yesterday. As of end 2010, proven oil reserves were 1,911 mln bbl, while proven and probable (2P) reserves stood at 2,321 mln bbl. The last reserve audit, at end 2009, covered only 70% of the company's reserves under Russian ABC1 reserve categories, which accounted for about 80% of total oil output. Meanwhile, the 2010 audit was virtually comprehensive. Last year, we estimated the company's proven reserves for all fields at 1,790 mln bbl as of end 2009. In this way we think that Bashneft's proven reserves increased by about 7% in 2010, which nonetheless would have secured a high reserve replacement ratio of 217%.

Bashneft's reserve dynamics are clearly very positive, especially for a company with traditionally low exploration drilling and heavily depleted reserves in its core operational area. To replace reserves, Bashneft is applying new reservoir management technologies and enhanced oil recovery methods introduced by the new management. The reserves life for Bashneft's brownfields stands at a relatively high 19 years. Meanwhile, the company is on the brink of a massive reserves build•up via the addition of the recently acquired Trebs and Titov fields to its balance, which will likely increase Bashneft's proven and probable reserve score by more than 50%, we estimate.

Suitors Line Up To Pick Up BP's Slack In Russiahttp://www.benzinga.com/life/politics/11/03/963865/suitors-line-up-to-pick-up-bps-slack-in-russia

By Steven AnfieldCreated 03/30/2011 - 12:56pmPosted on 03/30/11 at 12:56pm by Steven Anfield [1]

Reuters [2] is reporting that energy investors are pondering how to react to BP's (NYSE: BP [3]) troubles in Russia.

The dilemma is there for all to see; the setback faced by BP could allow others to step into the breach, but it is a stark reminder that dealings with Russia are rarely hassle-free.

It is, however, difficult to blame the Russians on this occasion. By not taking into account the terms of agreement with its existing partners at TNK-BP, BP brought the problems on itself. With that in mind, other more careful investors probably need not be deterred.

The suitors are already starting to line up. Total (NYSE: TOT [4]) recently pumped $4 billion into Russian gas producer Novatek, while Exxon (NYSE: XOM [5]) has announced an exploration agreement with Rosneft in the Black Sea and Shell is discussing the possibility of working with Rosneft in the Arctic.

Gazprom

Gazprom to Pay Record $2.2 Billion in Dividends, Vedomosti Sayshttp://www.bloomberg.com/news/2011-03-31/gazprom-to-pay-record-2-2-billion-in-dividends-vedomosti-says.html

By Yuliya Fedorinova - Mar 31, 2011 7:03 AM GMT+0200

OAO Gazprom, Russia’s natural-gas exporter, plans to pay at least a record 63.8 billion rubles ($2.2 billion) in dividends for 2010, Vedomosti reported, citing company data.

The state-run company may pay as much as 90 billion rubles, the Moscow-based newspaper said today.

To contact the reporter on this story: Yuliya Fedorinova at yfedorinova@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

Do not stray far from Gazpromhttp://community.nasdaq.com/News/2011-03/do-not-stray-far-from-gazprom.aspx?storyid=68827

Posted 3/30/2011 3:00 PM by Emerging Money> from Emerging Money in Investing, Stocks, World Markets

A few points on the ongoing natural gas story. For starters, Deutsche Bank sees Gazprom capitalizing faster than expected on the recent shift in global gas fundamentals. DB now expects OGZPY ( quote ) to trade up to $48 per ADR as the recent discrepancy between gas ( quote ) and oil prices ( quote ) narrows. As recently as late last year, OGZPY was trading at a discount of 8% to European oil prices, but that discount widened to 15% recently -- largely as Brent crude surged during Egypt's upheaval while gas stood still. But now that the market is coming back into balance faster than expected, spot gas prices have recovered and DB thinks OGZPY is due a bid. In fact, simply based on the historical linkage between gas and oil prices, there may be an easy windfall coming onto the OGZPY balance sheet. Throw in the fact that the Russian gas markets seem to be liberalizing, and it is a fairly compelling story.

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

MARCH 31, 2011

No More Gas in Gazprom Shares http://online.wsj.com/article/SB10001424052748703712504576232801774215000.html

By ANDREW PEAPLE

It's an ill wind that blows no one any good.

Tragedy in Japan and turmoil in Libya have spelled opportunity for Gazprom. The Russian state-controlled natural-gas producer's London-listed American depositary receipts are up about 27% in 2011 on the back of soaring demand from Europe. But investors should be wary of chasing them higher.

Sure, buoyant European demand for Russian natural gas should persist thanks to a combination of lost Libyan oil output, diversion of Middle Eastern crude supplies to Japan, and aversion to atomic power in Germany. Gazprom's exports to Europe, where it makes half its earnings, could be 7% higher this year than previously forecast, according to Bernstein Research.

With the price for its natural gas linked to rising oil prices, earnings before interest, tax, depreciation and amortization could hit $58 billion in 2011, 35% higher than 2010. That would point to a possible 25% upside for the shares, Bernstein reckons.

But absent a further rise in natural-gas prices, it's hard to see Gazprom shares rising from here. The stock trades at just 5.7 times 2011 forecast earnings, a 29% discount to its local peers and a 41% discount to major international companies, based on HSBC estimates. This largely reflects doubts over governance.

Last December, for example, Gazprom raised eyebrows by selling a 9.4% stake in Novatek, a fellow Russian natural-gas producer and star performer on the Moscow market, at a hefty 35% discount to its market price. Gazprom said the price reflected the illiquidity of Novatek's shares. Meanwhile, Gazprom's ties to the Kremlin still cause concern. The Russian government is supporting extra Gazprom gas supplies now, but in the past it has been linked with Gazprom's supply halts.

Nor can investors expect much support from the dividend, given the unpredictability of cash flows. Capital expenditures will be at least $157 billion out to 2016, UBS expects, but could be almost 50% higher if all Gazprom's likely commitments are included.

Now yielding just 1%, Gazprom's shares have risen far enough.

Write to Andrew Peaple at andrew.peaple@dowjones.com

30.03.2011

Gazprom, Statoil Heads Stress Need to Keep Shtokman Project on Schedulehttp://www.oilandgaseurasia.com/news/p/0/news/10981

Gazprom CEO Aleksey Miller and Statoil Senior Manager Helge Lund met at the Gazpom corporate headquarters where they discussed the European energy market and came to the agreement that given current affairs, the stability of natural gas exports by the traditional exporters Russia and Norway is taking on singular significance.

Miller said that Gazprom was ding everything it could to provide reliable supplies of gas to Europe by continuing to build the Nord Stream pipeline and actively developing the South Stream pipeline. According to the Gazprom press-office, the timely launch of the Shtokman project, which Gazprom is developing together with Statoil and Total, is very important.

Copyright 2011, Oil and Gas Information Agency. All rights reserved.

Gazprom in Murmansk: we have come to stay.http://barentsnova.com/node/971

Mar 30 2011

Aleksander Mandel, the director general of Gazprom Neft Shelf, updates on Shtokman development progress at the press conference in Murmansk.

Mandel started with unveiling myths on disrupted construction activities in Teriberka.

- The construction of the road from Teriberka to Orlovka and Zavalishina bay will be continued this year. So far, the construction works are frozen due to the fact that the workers exceeded their construction plan for 2010. We are subcontractors so we have to work according to the plan. Last year we spent 700 mln RUB for these works, 2011 will get 540 mln more.

The road construction is expected to be completed in 2011 so that the activities of 2012 would shift their focus towards port infrastructure.

- The port stands for cargo and an access to the LNG plant. In 2011, all design calculations will be completed. All engineering works have been done already. Financing of the LNG plant construction and support systems around it will be financed by us. There will be erected two construction terminals. LNG cargo will pass onshore in block-modules - 3,000 tons each. 

Aleksander Mandel confirmed commitment of the project partners to Shtokman, meanwhile he underlined that global crisis did not go unnoticed for the trio.

- The gas market fluctuated: during that period, Gazprom failed to sell much of its gas; Norway got some difficulties with her market outlets. We have joined our efforts to find perspectives in this direction. Statoil has not withdrawn from the project and is not going to; only some slight corrections on Statoil's behalf may take place.  According to the Gazprom Neft Shelf executive, Murmansk draws much of Gazprom's attention.

- We want to "sway" the region. We push all projects to Murmansk: we construct the road, we continue with engineering survey, we delivered Prirazlomnaya though we could have chosen some other place. The target is to develop Murmansk. Prirazlomnaya needs investments, and we would have to pay anyway wherever; meanwhile if we invest here [in Murmansk] then we make a perspective investment, and this perspective is to grow. Last year we invested about a billion roubles: 700 mln RUB for Teriberka road and 250 mln RUB to upgrade ship-repair yard # 35 [construction facilities used for Prirazlomnaya platform]. Big things are starting here. Be sure, we have come to stay here for a long

time. Though we need to gain some tempo and we will do it.  Photo: Alexander Mandel by gazprom.ru