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Russia 090512

Basic Political Developments AH1N1 virus

o Russians Told to Avoid US - Russias top public health official has advised Russians to avoid traveling to the United States because of the risk of infection with the AH1N1 influenza virus also known as swine flu Interfax reported

Itar-Tass Friendly ties with Mori to promote RF-Japan relations ndash Putino Itar-Tass Only one economic leader canrsquot overcome world crisis ndash Putino RIA Russia Japan looking to resolve disputes through economic tieso Itar-Tass Friendly ties with Mori to promote RF-Japan relations ndash Putino AFP Putin in Japan for talks on energy business tieso Bloomberg Japan Russia to Sign Siberian Oil Exploration Accord

(Update1)o Japan and Russia to co-develop oilfields o Reuters Russia Japan seek to bolster economic tieso Bloomberg Putin Says Russia Japan Should Boost Nuclear Energy

Efforts Obama to make official visit to Russia in early July White House confirms Barack Obama desire to visit Russia Russian FM optimistic on arms control deal with US Russia stops being leading trade partner in Transcaucasia Central Asia ndash IMF The time for the Palestinian state has come - Presiding over a UN Security

Council meeting Foreign Minister Sergey Lavrov urged the new administration in Tel Aviv to endorse a two-state solution for Israel and Palestine immediately and restart negotiations

Russia calls for international efforts to achieve peace in the Middle East Lavrov ldquoAll parties should resume talks towards peace processrdquo Russian FM calls for efforts to resume peace process in Middle East Russian shipbuilders look for tide to come in - Prime Minister Putin has criticised

Russian companies ordering ships from abroad while the domestic shipbuilding industry is on the rocks

Putin tells firms to buy Russian shipsthey object - Prime Minister Vladimir Putin on Monday told Russian companies to buy ships at home to help struggling domestic shipyards but a key client slammed Russian goods as uncompetitive

President Dmitry Medvedev to meet with CPRF leadership - President Dmitry Medvedev goes ahead with the practice of consultations with the main political parties of Russia

Police officer killed in shootout in Russias Daghestan - A police officer was killed overnight and three other people injured in a drive-by shooting in Russias southern republic of Daghestan a local Interior Ministry official said on Tuesday

RT Russia to play key part in nuclear comeback - Russia is no exception It currently has 31 operating reactors in 11 locations ndash mostly in the European part

of the country And the authorities are hoping to double that to cut down its dependence on oil and gas to generate electricity

Russias Glonass system to get full state support - deputy PM New Russian fighter jet due by year-end Russian Deputy Prime Minister Sergei

Ivanov told reporters after a shipbuilding meeting in the Far Eastern city of Komsomolsk-on-Amur that full-scale production of the advanced multi-role fighter will start in 2010 RIA Novosti reported

Military Commissions Arms The army added 17 ICBMs four short-range Iskander missile complexes and 34 rockets for the S-400 air-defense systems Deputy Prime Minister Sergei Ivanov told Prime Minister Vladimir Putin on May 6 according to a transcript posted on the Cabinet web site

NYT Russia Stockpiles the Gems Awaiting the Return of Demand UK rights activists defends banned Moscow Gay Pride parade

National Economic Trends Russia daily cbank swap limit at 5 bln rbls Russia Pension Funds Gain Most in Four Years Kommersant Says New official forecast 6 GDP decline in 2009 EBRD cuts Russias 2009 growth forecast from 1 to -75

Business Energy or Environmental regulations or discussions VEB Toughens Standards - Vneshekonombank which dispenses Russias

economic stimulus funds will grant subordinated loans only to banks that have 35 billion rubles ($108 million) of capital limiting access to fewer than 100 lenders

VEB to lend $250mln to airlines for 13 years for acquisition of Superjets ndash Ivanov VEB approves subordinated loans to Russian Standard and Promsvyazbank Russian credit growth decelerating rapidly - While the CBR has stepped in

aggressively with the liquidity support in 4Q09 it has been short-term and is being gradually reduced in 1Q09

Electricity consumption decreased 81y-o-y during the first week of May Mechels Kuzbass power sales co could pass on 2008 dividends Severstal to unveil Q1 IFRS results May 15 Russian steelmakers gain market share Deripaska may sell construction business-paper IUD suspends construction of steel rolling plant in Armavir Railway Cargo Turnover Continuous Recovery - Russian Railways has released

highlights of its April transportation statistics As railways account for 85 of cargo transportation in Russia the dynamics are a good proxy for changes in industrial output

Russian truck maker KamAZ resumes work after three-week halt GAZ autoworks restarts conveyor Tue after May holidays Iridium seeks Russian satellite services market - Bethesda-based Iridium Satellite

announced Monday that is has begun the process of entering the Russian market for mobile satellite services forming a company called Iridium Communications Russia OOO to pursue a license for providing such services in Russia

New Arctic bulk carrier for Murmansk Shipping Company - The Murmansk Shipping Company has officially taken over its new ice protected bulk carrier constructed at the Chinese Chengxi Shipyard

MOSCOW BLOG Investors take big bets - Now that investors are no long dodging falling rocks some have started to think about the long term and are betting heavily that emerging Europe and Russia in particular will return to its growth path albeit at a reduced rate sometime soon

Activity in the Oil and Gas sector (including regulatory) Chinese Envoy to Russia Oil Pipeline Serves Strategic Goals of Both Sides Transneft negotiates placement of US$1bn Eurobonds LUKoil makes an offer to RITEK minorities LUKOIL Caspian development continues as planned - On Friday newswires

reported that LUKOIL had anchored the 1340-ton basement block of its first stationary ice-resistant platform at the Yuriy Korchagin oil field on the Caspian Sea

Gazprom GazpromDESFA agreed on Greek part of South Stream Gazprom and Eni set to sign one more intermediate agreement on South Stream -

According to todays Kommersant on Friday (May 15) the Prime Ministers of Russia and Italy are going to sign one more intermediate agreement on the construction of the South Stream pipeline project

UPDATE Polish PGNiG OKs New Short-Term Deal With Gazprom RosGas AG to Control 20 Percent of Hungarian Gas Distribution Who is really behind RosGas Analysis Explosion in Moscow bad PR for Gazprom

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

Full Text Articles

Basic Political Developments

AH1N1 virusRussians Told to Avoid UShttpwwwthemoscowtimescomarticle101042377020htm

Russias top public health official has advised Russians to avoid traveling to the United States because of the risk of infection with the AH1N1 influenza virus also known as swine flu Interfax reported

Gennady Onishchenko head of the Federal Consumer Protection Service said late last week that Russians should delay all trips that arent necessary to avoid the virus which has killed at least 49 people including 45 in Mexico two in the United States and one each in Canada and Costa Rica Onishchenko earlier in the week advised against traveling to Mexico and Canada (MT)

RUSSIA-JAPAN

Friendly ties with Mori to promote RF-Japan relations ndash Putin

httpwwwitar-tasscomenglevel2htmlNewsID=13926799

TOKYO May 12 (Itar-Tass) - Russian Prime Minister Vladimir Putin hopes that his friendly ties with Japans ex-Premier Yoshiro Mori will help forward the development of Russo-Japanese relations

During a meeting with Mori here on Tuesday Putin pointed out that the former engages in vigorous political activities both inside the country and in the international arena

I know that you follow very attentively the development of the economic situation in the world and in Japan and that you are highly active in parliament Putin said He thanked the ex-Premier who is now a member of the House of Representatives for deeming it possible to return from his African tour and prior to another trip find time for the meeting

For his part Yoshiro Mori said he had been looking forward to this meeting When we first met I came to feel that you sought in earnest to inform your country so that Russia would become an open and democratic state Mori said He pointed out that Putin as Russias Chairman of Government now plays a big role not only inside the country but in the international arena as well

Only one economic leader canrsquot overcome world crisis ndash Putin

httpwwwitar-tasscomenglevel2htmlNewsID=13927339ampPageNum=0

TOKYO May 12 (Itar-Tass) - Russian Prime Minister Vladimir Putin believes that only one economic leader cannot overcome the world crisis

ldquoThe global crisis showed graphically that in the world economy as well as the world politics one even a very powerful leader cannot ensure stability sustainability and predictabilityrdquo Putin said at the Russian-Japanese business forum in Tokyo on Tuesday

ldquoTo resolve this task the leadership should be collectiverdquo the premier believes In this connection Russia ldquointends to develop the direct dialogue with the business circles of the leading countries in the world including Japanese businesspeoplerdquo

In Putinrsquos view the crisis gives ldquoa unique opportunity to reform the economy and invigorate the world financial systemrdquo According to him a forming modern agenda ldquoshould reflect adequately the growing role of new centers of economic growth and political influence primarily in the Asia-Pacific regionrdquo

Putin recalled about a program of anti-crisis measures in Russia with a big financing volume ndash three trillion roubles (about 90 billion dollars) ldquoThese allocations are mainly made to support the banking system the real sector of economy labour market and the consumer demand that is to say citizens of the countryrdquo the premier said

He believes that ldquothese measures will allow averting the worst scenario and will lay down the foundations for resuming a sustainable economic growthrdquo

Putin reminded that at the end of the previous year Russian economy was exposed to the impact of ldquothe double strikerdquo ldquoThis was the financial crisis considerably deteriorated conditions of the foreign trade ndash the fall in the demand and the prices on traditional Russian export goodsrdquo

Putin forecasts ldquoa certain reduction in the GDP industrial production and the foreign traderdquo in 2009 ldquoHowever I can affirm that Russian market and social institutions proved its stability and viability and the capability to counteract the destructive tendencies of this crisisrdquo the Russian prime minister pointed out

Russia Japan looking to resolve disputes through economic tieshttpenrianrurussia20090512121542731html

TOKYO May 12 (RIA Novosti) - Russian Prime Minister Vladimir Putin said on Tuesday Moscow and Tokyo could resolve their existing territorial dispute by building mutual trust and developing strong economic ties

Putin arrived in Tokyo on May 11 to discuss a long-standing territorial dispute along with economic energy and international issues with the Japanese leadership

With this attitude in mind our mutual work will allow us to resolve a number of global issues including the signing of a peace treaty [between Russia and Japan] Putin told a Russian-Japanese business forum in Tokyo

Russia and Japan have yet to sign a formal World War II peace treaty due to their territorial dispute over the four South Kuril Islands former Japanese territory annexed by the Soviet Union after the war

The Russian prime minister said both countries were interested in developing strong economic ties primarily in the energy sector

Cooperation in the energy sector which plays a key role in steady supplies of fuel-carriers to the Asian-Pacific region and strengthening the global energy security remains our priority Putin said

Japan is one of Russias major trading partners in Asia ranking third in terms of bilateral trade Last year trade turnover between Russia and Japan totaled almost $29 billion

Japanese companies take part in two major energy projects in Russias Far East - Sakhalin-I and Sakhalin-II

We launched an LNG plant in Sakhalin this February The first shipments of liquefied natural gas have already arrived in Japan the prime minister said

He also confirmed that Russia and Japan would sign an agreement on cooperation in the civilian use of nuclear power opening new possibilities for bilateral cooperation

I am certain that we will find new areas of mutual interest and we are ready to implement mutually beneficial projects Putin said

Friendly ties with Mori to promote RF-Japan relations ndash Putinhttpwwwitar-tasscomenglevel2htmlNewsID=13926799





Putin in Japan for talks on energy business tieshttpwwwgooglecomhostednewsafparticleALeqM5i9G8S_H955NK92PXP6K4Y3i2FfIA

7 hours ago

TOKYO (AFP) mdash Russias Premier Vladimir Putin kicked off a visit to Japan Tuesday expected to lead to several business deals and a pact on nuclear power cooperation despite a lingering territorial dispute

The former Russian president travelling with a high-powered delegation was in Tokyo to meet corporate chiefs regional governors two former premiers and the opposition leader before holding talks with his counterpart Taro Aso

Russian officials warned before the visit that Tokyo should not expect a breakthrough in a territorial dispute that has plagued relations since World War II and has prevented the neighbours from signing a peace treaty

Putins deputy chief of staff Yury Ushakov cautioned against inflated expectations in the dispute over what Japan calls the Northern Territories and Russia refers to as the Southern Kurils

Moscow believes the historic dispute should not get in the way of stronger economic relations including the transfer of Japanese cutting edge technology to Russia and the flow of Russian oil to energy-poor Japan

Putin told a meeting of regional governors from both countries Tuesday that regional cooperation is an important factor which can stimulate economic development help overcome the consequences of the global economic crisis

Closer ties will help to create a favourable atmosphere for joint projects (and) create new jobs which is especially important now

Japan and Russia were scheduled to sign several official agreements including a pact to promote the non-military use of nuclear power which would pave the way for Japan to export nuclear power plant technology to Russia and for Russia to sell more nuclear fuel to Japan

They were also due to sign commercial deals including on cooperation in banking and in hydro and wind-power plants Russian officials said

The Nikkei reported that both countries were expected to sign a deal as early as Tuesday to jointly develop two major oil fields holding up to several hundred million barrels in the central Irkutsk region of Eastern Siberia

The government-run Japan Oil Gas and Metals National Corp was expected to take a 49 percent stake while Russias Irkutsk Oil Co would take the remainder the Nikkei reported citing unnamed sources

On a lighter note Putin a judo black belt was to unveil a Japanese language version of his book on the sport alongside Yasuhiro Yamashita a world judo champion with whom Putin has also recorded a video manual

Japan Russia to Sign Siberian Oil Exploration Accord (Update1)

httpwwwbloombergcomappsnewspid=newsarchiveampsid=ayKTcOwtAQGQ

By Shigeru Sato and Yuji Okada

May 12 (Bloomberg) -- Japan Oil Gas amp Metals National Corp a state-owned explorer and Russiarsquos Irkutsk Oil Co will jointly develop two fields in eastern Siberia as Japan seeks to reduce reliance on supplies from the Middle East

The companies will sign an initial agreement to form a joint venture at 4 pm in Tokyo today said Kazuhiko Uematsu a spokesman for Jogmec as the Japanese explorer is known Jogmec will hold 49 percent stakes in the two fields he said

The agreement coincides with Russian Prime Minister Vladimir Putinrsquos visit to Tokyo during which the two countries will sign a pact on peaceful uses of nuclear energy Japan imports more than 80 percent of its oil from Saudi Arabia and neighboring states

ldquoThe Eastern Siberian area has the advantage of geographical proximity to Japan and rich potential in oil and natural gas reservesrdquo Jogmec said in a statement on its Web site ldquoDevelopment has been delayed by the harsh natural surroundings and a lack of infrastructure that has prevented sufficient researchrdquo

Jogmec and Irkutsk Oil will conduct exploration work on the 3307-square-kilometer Bolshetirsky block and the 4835-square- kilometer Zapadno-Yaraktinsky area the Japanese company said in a statement

The partners plan to complete by February 2013 a seismic survey to estimate potential reserves of the two fields with a total of six exploration wells to be drilled the Tokyo-based company said in its statement The two areas are close to a pipeline under construction from eastern Siberia to Russiarsquos Pacific coast it said

Japanrsquos government has been lobbying for the completion of the oil pipeline to link the Russian coast with untapped reserves in eastern Siberia

To contact the reporters on this story Shigeru Sato in Tokyo at ssato10bloombergnet Yuji Okada in Tokyo at yokada6bloombergnet

Last Updated May 12 2009 0057 EDT

Japan and Russia to co-develop oilfields httpwwwupstreamonlinecomlivearticle178216ece

Wire services

Japan and Russia plan to sign an agreement as early as today to jointly develop oilfields in Eastern Siberia

The agreement is expected to involve two oilfields in central part of the Russian region of Irkutsk reported the Nikkei business daily

Developing the fields will cost an estimated 15 billion yen for the period leading up to commercial production alone the daily said

The project will be led by a joint venture between Japan Oil Gas and Metals National Corporation or JOGMEC and Irkutsk Oil The Japanese government-owned company is expected to take a 49 stake and the Russian partner the remainder

With the goal of starting full-scale production as early as 2013 the joint venture will kick off survey and drilling in 2010 or later

JOGMEC will transfer its stake to Japanese private-sector companies once commercial production is deemed feasible reported Reuters

Tuesday 12 May 2009 0305 GMT | last updated Tuesday 12 May 2009 0307 GMT

Russia Japan seek to bolster economic tieshttpinreuterscomarticleworldNewsidINIndia-39559920090512

Tue May 12 2009 902am IST

By Oleg Shchedrov and Chisa Fujioka

TOKYO (Reuters) - Russia and Japan are set to sign a parcel of agreements on Tuesday including oil and nuclear energy deals as they stress business ties over a long-running dispute over some offshore islands

Russian Prime Minister Vladimir Putin travelling in Tokyo with 100 company executives will attend a business forum and later meet Japanese Prime Minister Taro Aso for talks on boosting trade and investment

Despite the territorial row which has prevented the two sides from signing a peace treaty for World War Two economic ties have flourished as Japan eyes Russias growing consumer market and its booming oil and gas industries

Russia facing a recession after a decade-long boom is also eager for Japanese investment to develop its Far East region

Regional cooperation is an important factor which can stimulate economic development help overcome the consequences of the global economic crisis Putin told a meeting of regional governors from both countries

Deepening direct regional cooperation will help to create a favourable atmosphere for joint projects create new jobs which is especially important now

In a sign of growing business ties the state-run Japan Oil Gas and Metals National Corp (JOGMEC) said in a statement it would sign an agreement with Irkutsk Oil Co to jointly develop two oil fields in Eastern Siberia through a joint venture

The project the latest in Japans efforts to reduce its reliance on the Middle East for its oil needs will cost 15 billion yen ($1526 million) to bring it to commercial production alone the Nikkei business newspaper reported

Japan and Russia are also expected to sign an agreement on civilian nuclear energy use in a deal that would clear the way for Japanese companies to help build nuclear power plants in Russia

The agreement would also allow Japan to tap Russias uranium enrichment technology

While both countries have extolled the mutual benefits of stronger economic ties little progress was expected on a dispute over a group of small islands known in Russia as the Southern Kuriles and in Japan as the Northern Territories

Neither Japan nor Russia accepts the others claim of sovereignty over the sparsely populated islands the closest of which is 15 km from Japans northernmost island of Hokkaido

Putin Says Russia Japan Should Boost Nuclear Energy Efforts

httpwwwbloombergcomappsnewspid=20601095ampsid=aDpS9Mb0GZT0

By Sachiko Sakamaki and Lyubov Pronina May 12 (Bloomberg) -- Russian Prime Minister Vladimir Putin invited Japanese companies to invest in his country and said the two nations should work to ensure energy security in Asia

ldquoRussia is setting an ambitious task of reforming the economyrdquo Putin said in a speech to business leaders in Tokyo as part of a three-day visit ldquoThere is a space for cooperation with Japan in sectors of innovation -- first and foremost nuclear energy and telecommunicationsrdquo

Putin later today will sign an agreement with Prime Minister Taro Aso to boost cooperation on the development of peaceful nuclear energy likely increasing trade that amounted to almost $30 billion last year Executives from Russian companies are accompanying him to meet with Japanese counterparts

ldquoBilateral economic cooperation has reached a qualitatively new levelrdquo Putin said ldquoBusiness prospects are brightrdquo He cited the opening of a Nissan Motor Co plant in Russia next month as the kind of project ldquothat the Russian government will support in every wayrdquo

Japan and Russia are unlikely to make similar progress over a territorial dispute when Putin and Aso meet Putinrsquos deputy chief of staff Yuri Ushakov told reporters in Moscow last week that Russia isnrsquot prepared to cede four islands claimed by Japan Putin today said relations with Japan are improving

lsquoPolitical Dialoguersquo

ldquoA major factor stimulating cooperation is the developing dialogue between our countries local governments and companiesrdquo he said ldquoWe hope that this will continue in the futurerdquo

Russia the worldrsquos largest energy producer is grappling with its first recession since 1999 after the global financial meltdown dragged down oil prices Putin said the crisis provided ldquoa unique opportunity to reform the economies and financial systemsrdquo and called on the Asia-Pacific region to play ldquoa stronger rolerdquo

Putinrsquos visit comes three months after Aso met with Russian President Dmitry Medvedev on Sakhalin Island to inaugurate Russiarsquos first liquefied natural gas plant which has contracts to deliver LNG to customers in Japan The plant is located 160 kilometers (100 miles) from Japanrsquos northern island of Hokkaido

Japan has repeatedly demanded that Russia return four islands near Sakhalin seized by the Soviet Union at the end of World War II Failure to reach an agreement on the islands known as the Northern Territories in Japan and the southern Kurils in Russia has prevented the countries from signing a peace treaty formally ending the war

During a meeting with Japanese business leaders Putin said improving ties would help the two nations settle their differences

ldquoIt is that attitude and that joint work that will allow us to resolve global issues including reaching a peace agreementrdquo he said during the meeting

To contact the reporters on this story Sachiko Sakamaki in Tokyo at ssakamaki1bloombergnet Lyubov Pronina in Tokyo at lproninabloombergnet


Obama to make official visit to Russia in early Julyhttpwwwmosnewscompolitics200905121600

Today 1041 PM

US president Barack Obama will make his first official visit to Russia since entering the White House from July 6 to 8 the Kremlin said on its website on Monday

Obama had said following talks with Russian President Dmitry Medevedev on the eve of the G20 summit in London on April 1 that he would visit Russia in July

The president of the United States Barack Obama will be on an official visit to Russia from July 6 to 8 at the invitation of the Russian president the Kremlin statement said giving no further details

Obama said Thursday he was hopeful of improving ties between Washington and Moscow after hosting visiting Foreign Minister Sergei Lavrov in the Oval Office

The president said his wide-ranging talks with Lavrov focused on Iran nuclear proliferation Afghanistan and Pakistan the Middle East the financial crisis and other issues

We have an excellent opportunity to reset the relationship between the United States and Russia on a whole host of issues Obama said

I am hopeful that the meetings that we had so far and the meetings that we expect to have throughout the course of this year will be of mutual benefit to both countries

Medvedev hailed Barack Obama as my new comrade after their face-to-face London discussions

I liked the talks It is easy to talk to him He can listen The start of this relationship is good Medvedev said adding Today its a totally different situation (compared to Bush) This suits me quite well

Today from the United States there is at least a desire to listen to our arguments he added of US missile defence shield plans in Moscows former eastern European sphere of influence that Russia fiercely opposes

Obama before that meeting said there were very real differences between the United States and Russia and I have no interest in papering those over

But he added there are also a broad set of common interests that we can pursue

White House confirms Barack Obama desire to visit Russia


WASHINGTON May 12 (Itar-Tass) - US President Barack Obama does intend to visit Russia for a continuation of important work in the field of nuclear non-proliferation but a timeframe for the visit is to be announced by the White House additionally presidential

press secretary Robert Gibbs told Itar-Tass on Monday in response to a request to confirm the Kremlin announcement that Obamas official visit to Russia would be made from July 6 to 8

Gibbs said he had no specific confirmation of the mentioned timeframe for the visit After the briefing officials in the press service of the US National Security Council to the White House told Itar-Tass the same

The timeframe announced in Moscow as a tentative one has been known for several weeks now Many expected that officially it would be confirmed during Russian Foreign Minister Sergei Lavrovs working visit to Washington at the end of last week However that did not happen although matters concerning arrangements for a meeting between the two presidents were naturally discussed most substantively

Gibbs in his remarks on Monday reaffirmed that adding though that most important was not the organisational aspect but the working out of the essence of matters that Obama is looking forward to discussing in Russia so as to strengthen the security of the two countries and the whole world

Russian FM optimistic on arms control deal with UShttpwwwgooglecomhostednewsaparticleALeqM5i0xBv8YQwWSZqAQgjd42RCvU1uEAD984JJFO2

28 minutes ago

MOSCOW (AP) mdash News reports quote Russias foreign minister as saying that Washington has taken a constructive stance in arms control talks and there is a good chance of reaching a deal

Russian news agencies quote Sergey Lavrov as saying that Moscow hopes that a successor agreement to the 1991 START arms reduction treaty will be ready for signing by the years end The START treaty expires in December

Lavrov spoke to Russian reporters Tuesday after returning from a visit to the United States where he held talks with President Barack Obama and Secretary of State Hillary Rodham Clinton

Lavrov said Russia would like a new deal to count all nuclear warheads including those in storage But he added that Moscow is ready to listen to the US arguments to the contrary

Russia stops being leading trade partner in Transcaucasia Central Asia ndash IMFhttpwwwinterfaxcom3492688newsaspx

YEREVAN May 12 (Interfax) - Russia is no longer a leading tradepartner in Transcaucasia and Central Asia due to the world economiccrisis Ratna Sahay deputy director of the IMF Middle East and CentralAsia Department said during the presentation of her report addressingthe prospects of the Armenian economy given in Yerevan on Monday Russias GDP is expected to drop sharply (by 6) in 2009 Sahaysaid The deterioration of the economic situation in Russia has alreadycaused a considerable reduction of trade and private transfers fromRussia to the countries of the region and exports from the regionscountries to Russia have also decreased she said The economies of some countries especially Tajikistan Kazakhstanand Armenia are largely dependent on the inflow of private transfersfrom Russia said Sahay At the same time Russia continues to play an important role in theregion in terms of investments said Sahay

The time for the Palestinian state has comehttpwwwrussiatodayruPolitics2009-05-12The_time_for_the_Palestinian_state_has_comehtmlprint

12 May 2009 1055

Presiding over a UN Security Council meeting Foreign Minister Sergey Lavrov urged the new administration in Tel Aviv to endorse a two-state solution for Israel and Palestine immediately and restart negotiations

On his last stop in the US Russian Foreign Minister Lavrov chaired a meeting with the UN Security Council Addressing the urgent need for an Israel-Palestine solution his main concern was not to backtrack

ldquoTheres an alarming negotiation vacuum caused by a number of well-known reasons outbreaks of violence the Gaza crisis first the election and then a long process forming an Israeli government In these conditions the major thing is to renew negotiations between the Israelis and the Palestinians as soon as possiblerdquo stated Lavrov in his address

In an unusually unified voice the Security Councilrsquos finger pointed in the new Israeli governmentrsquos direction whose hawkish Prime Minister Benjamin Netanyahu refuses to publicly endorse the idea of a Palestinian state

UN Secretary General Ban Ki-Moon supported the idea that ldquothe time has come for Israel to fundamentally change its policies in this regard as it has repeatedly promised to do but not yet done Action on the ground together with a genuine readiness to negotiate on all core issues including Jerusalem borders and refugees based on

Israelrsquos existing commitments will be the true test of Israelrsquos commitment to the two-state solutionrdquo

Russia called for the ministers of all major powers to fly in but one face missing is US Secretary of State Hillary Clinton which raised a lot of questions at Lavrovrsquos press conference which he quickly shook off

ldquoWe donrsquot see any political attitude in this I was just in Washington three days ago and Hillary told me that she wouldnrsquot be able to make it And she asked Susan Rice to represent the USrdquo Lavrov said himself

Fixing the crisis in the Middle East is going to take vigorous diplomacy and to stress the time crunch Russia is already making plans to hold a peace conference where all sides will be invited

Russia calls for international efforts to achieve peace in the Middle Easthttpwwwmosnewscompolitics20090512peacemiddleeast

Today 1046 PM

Russiarsquos Foreign Minister has called for world efforts to resume the peace process in the Middle East with a common goal being an independent Palestinian state living side by side in peace with a secure Israel

Sergei Lavrov made the statement to the press on Monday after he chaired an open Security Council meeting as the president of the 15-nation UN body Xinhua news agency reports Russia holds the rotating Council presidency for the month of May

We need to create the appropriate international atmosphere Lavrov said All Council members were united in that todays meeting was extremely timely

Our common goal is to achieve the implementation of the concept of the two states Palestine and Israel living in peace and security he said This point is reflected in the presidential statement that was adopted at the outcome of the discussion The Security Council in its statement expressed its resolve to continue to provide necessary assistance to the parties to achieve this

The Security Council adopted the presidential statement drafted by Russia at the end of the open debate to call for renewed and urgent efforts by the parties and the international community to achieve a comprehensive just and lasting peace in the Middle East on the basis of the two-state solution

The Security Council stressed the urgency of reaching comprehensive peace in the Middle East the statement said Vigorous diplomatic action is needed to attain the goal

set by the international community - lasting peace in the region based on an enduring commitment to mutual recognition freedom of violence incitement and terror and the two-state solution building upon previous agreements and obligation

Council members call upon the parties to resume talks not from square one but taking into account decisions of the Council and based on arrangements they reached between themselves Lavrov said

Resumption of talks should not go back to square one because of the gains we already have he said They should be based on reaffirmation of the international legal basis that is contained in Security Council resolutions

Lavrov ldquoAll parties should resume talks towards peace processrdquohttpwwwrussiatodaycomTop_News2009-05-12Lavrov___All_parties_should_resume_talks_towards_peace_process_html

12 May 2009 0012

Russian Foreign Minister Sergey Lavrov has been chairing a UN Security Council meeting that seeks to restart the Middle East Peace Process The outcome has been explained at a press conference at UN headquarters

Lavrov noted that the Security Council had called upon all parties involved in the Middle East Peace Process to resume their talks It was also pointed out that to reach comprehensive peace in the Middle East efforts must be made to continue this process not only with the Palestinians but also on the Syrian and Lebanese tracks

Participants in the meeting supported the convening in Moscow of an international conference on the Middle East later this year

ldquoThis unanimous support for our initiative clearly will help us in our continuing work to coordinate the timing and substance for this Moscow forumrdquo said Mr Lavrov

Previous resolutions remain valid

Answering a question about the two-state solution for the Israeli-Palestinian conflict and adhering to previous commitments by the parties Lavrov said that none of the previous agreements including those decisions regarding a two state concept had been cancelled It is a matter of principle he said to resume talks based upon the decisions made so far and reflected in UN resolutions and not begin from scratch

Lavrov particularly pointed out that the Arab Peace Initiative seeking to normalize relations between the entire Arab region and Israel had received ldquounprecedented supportrdquo during the meeting

ldquoWe have been for this initiative from the first days after this initiative was approved in 2002 And I was pleasantly surprised by the fact that all UN Security Council members were saying this time that this initiative should be one of the cornerstones of the future settlementrdquo the Russian Foreign Minister said

According to Lavrovrsquos statement the Arab Peace Initiative will be ldquoorganically incorporatedrdquo into the Middle East Policy of US President Barak Obama

Talks with Hamas

Lavrov also mentioned that Russia had never stopped talking to all parties involved in the Palestinian problem

ldquoWe continue negotiations with Hamas and wersquore concentrating on those aspects which are a basic concern of the Palestinian people This includes seeking the unity of the Palestinian peoplerdquo he said

ldquoRecently some countries avoided this issue and spoke only to one part of the Palestinian community Today they already accept that there is no solution to the Palestinian problem if there is dissent within the Palestinian communityrdquo added Russiarsquos Foreign Minister

The Moscow conference

According to Lavrov the date of the Moscow conference on the Middle East will be determined shortly after the new Israeli government has approved of participating in the conference

ldquoThe Middle East Quartet will meet shortly to discuss this issue he said

Lavrov mentioned that the Moscow conference would include a broad number of parties There will be all members of the Quartet the Islamic Conference the League of Arab States countries from other continents that provide humanitarian material or moral support to the efforts in the region

However President Obamarsquos visit to Moscow July 6-8 as Sergey Lavrov noted is not linked to the Middle East

Russian FM calls for efforts to resume peace process in Middle Easthttpnewsxinhuanetcomenglish2009-0512content_11355977htm

2009-05-12 044912

UNITED NATIONS May 11 (Xinhua) -- Russian Foreign Minister Sergey Lavrov on Monday called for world efforts to create the appropriate international atmosphere to resume the peace process in the Middle East with a common goal to achieve the concept

of the two-state solution which means an independent Palestinian state to live side by side in peace with a secure Israel

Lavrov made the statement to the press here after he chaired an open Security Council meeting as the president of the 15-nation UN body Russia holds the rotating Council presidency for the month of May




The Security Council stressed the urgency of reaching comprehensive peace in the Middle East the statement said Vigorous diplomatic action is needed to attain the goal set by the international community -- lasting peace in the region based on an enduring commitment to mutual recognition freedom of violence incitement and terror and the two-state solution building upon previous agreements and obligation



I hope the (presidential) statement to a certain extent will play a role in terms of impacting those who have yet to formulate their approaches he said

On Russias proposal to hold an international conference the Russian foreign minister said Participants in this meeting supported the convening in Moscow this year on an international conference on the Middle East This unanimous support for our initiative clearly will help us to coordinate the timing and the substance for this Moscow forum

On the Arab Peace Initiative Lavrov said There is the unprecedented clear support for Arab Initiative

We have advocated for this essentially from its very inception he said At this point I was pleasantly surprised to see that all council members very clearly talk about the need to make this initiative one of the cornerstones of a future settlement

Russian shipbuilders look for tide to come inhttpwwwrussiatodayruBusiness2009-05-12Russian_shipbuilders_look_for_tide_to_come_inhtmlprint

12 May 2009 0727

Prime Minister Putin has criticised Russian companies ordering ships from abroad while the domestic shipbuilding industry is on the rocks

The Amursky shipyard in Russiarsquos Far East made dozens of warships and submarines during the Second Word War

Cargo ships refrigerator vessels platformshellipthe shipyardrsquos managing director told Prime Minister Putin what it used to make and what itrsquos building today ndash just two tankers for a German customer

Local companies build just 6 of the ships Russia needs The rest come from abroad ndash and the PM believes ship buyers need to shop at home

ldquoI think its unacceptable to commission ships from foreign shipbuilders if such orders can well be placed at Russian shipyardsrdquo

Two of the far eastern shipbuilders are already bankrupt and 8 others are unprofitable and deeply in debt Lack of orders is one of the main problems for the Russian ship-yards most of which were originally set up for naval construction

The government says the answer is to turn them into civil shipbuilders but industry players such as Andrei Krainy Head of Federal Fishing Agency say thatrsquos easier said than done

ldquoHistorically Russias Far Eastern shipbuilding was military focused Now companies dont know how to control costs and therefore today we are not competitive nor by the price neither by deadlinesrdquo

Russia needs to attract foreign capital and projects to build new dockyards and modernise old ones The United Shipbuilding Corporation says Singapore is considering invest $5 billion in the construction of a Russian dockyard in which Russia will have a 25 stake

Meanwhile the state is buying a 59 stake in the Amursky with its billion dollar debt for a symbolic price in order to save it

And State lender Sberbank is to loan the yard $400 million for ten years It remains to be seen if that can keep the business afloat

Putin tells firms to buy Russian shipsthey objecthttpwwwforbescomfeedsafx20090511afx6404597html

051109 1023 AM EDT

By Oleg Shchedrov

KOMSOMOLSK-ON-AMUR Russia May 11 (Reuters) - Prime Minister Vladimir Putin on Monday told Russian companies to buy ships at home to help struggling domestic shipyards but a key client slammed Russian goods as uncompetitive

Officials are trying to encourage companies to buy more home-produced goods to help Russia through its first recession in a decade and make up for slumping exports

I consider it inadmissible to place orders at foreign shipyards when you have the opportunity to build similar ships in Russia Priority should be given to national industry Putin said at a meeting on shipbuilding in far eastern Russia

The sector has been singled out as one of the governments key priorities as part of a long-term plan to diversify the economy from its dependence on energy and commodity exports

But a fisheries official and a key ship buyer said Russia was not yet ready to compete with foreign companies

The far eastern shipbuilding sector had been designed to serve the navy They cannot work properly with civilian orders we are not competitive on price and on production schedules said Andrei Krayniy head of the Federal Fishing Agency

In the Norwegian Sea where we work with Norwegians our ships fish next to each other and still our costs are 25 percent higher because of lousy engines he added

His comments were echoed by Sergei Frank general director of Sovcomflot one of the shipbuilding sectors biggest clients

Up to 80 percent of equipment at Russian docks is outdated and it is difficult to build competitive ships Frank said adding that a major ship took 30 months to build in Russia but half as long in South Korea

Illustrating problems in the sector the Amur Shipbuilding Enterprise -- one of the main producers and modernisers of submarines in Soviet days -- is on the verge of bankruptcy

Putin said an agreement has been reached under which private shareholders would sell a 59 percent stake in the shipbuilder to Russias largest lender Sberbank for a nominal in fee Sberbank would then pass the shares into the control of the state United Shipbuilding Corporation (USC)

That would take USCs stake in the factory to around 77 percent At the same time state-controlled Sberbank would lend the factory $400 million for 10 years to help modernise it

I dont understand how one managed to privatise an enterprise which specialises in producing nuclear submarines Deputy Prime Minister Sergei Ivanov told reporters

Private owners have yielded no positive results The enterprise found itself on the brink of bankruptcy

(Reporting by Oleg Shchedrov writing by Toni Vorobyova Editing by David Cowell) Keywords RUSSIA SHIPPING

(antoninavorobyovareuterscom Tel +7495 7751242 Reuters Messaging antoninavorobyovareuterscomreutersnet)

President Dmitry Medvedev to meet with CPRF leadership


MOSCOW May 12 (Itar-Tass) - President Dmitry Medvedev goes ahead with the practice of consultations with the main political parties of Russia

The Head of State is to receive the leadership of the Communist Party of the Russian Federation at the Barvikha residence on Tuesday Earlier he held similar meetings with the leading members of the United Russia and the Just Russia parties

Tuesdays participants in the upcoming consultations take on the whole a positive view of this practice just as of the Presidents striving for a dialogue with all poltical forces

Police officer killed in shootout in Russias Daghestanhttpenrianrurussia20090512121541938html

MAKHACHKALA May 12 (RIA Novosti) - A police officer was killed overnight and three other people injured in a drive-by shooting in Russias southern republic of Daghestan a local Interior Ministry official said on Tuesday

The spokesperson said the incident occurred on Monday evening near a town market in the Kizilyurt district when gunmen opened fire on the police officer from a vehicle

The police officer died instantly three people who were standing near the officer were wounded he said

A woman and two men have been hospitalized

Investigators worked at the scene overnight and a search has been launched to try and trace the attackers

Sporadic militant attacks and clashes remain common in Russias North Caucasus republics neighboring Chechnya although the Kremlin campaign to fight separatists and terrorists there was formally declared concluded Violence often spills over into the republics in particular Ingushetia and Daghestan

Russia to play key part in nuclear comebackhttpwwwrussiatodayruBusiness2009-05-12Russia_to_play_key_part_in_nuclear_comebackhtmlprint

12 May 2009 0724

Russia is about to enter a new era of cooperation with Japan on nuclear energy as the energy source undergoes a renaissance at home

With the threat of global warming increasing nuclear power has a renewed appeal Going AtomichellipWith the worlds fossil fuel resources rapidly depleting many governments are now taking a closer look at the potential of nuclear energy

Russia is no exception It currently has 31 operating reactors in 11 locations ndash mostly in the European part of the country And the authorities are hoping to double that to cut down its dependence on oil and gas to generate electricity

Nuclear power plants provide 16 of the countryrsquos overall output And now with the increasing energy demand the government hopes to boost this figure up to 25 in the next 15 years These ambitious plans are now starting to find their way into reality

By 2011 the Kalininskaya power plant ndash some 350 km from Moscow ndash is expecting to launch a new reactor Itll be capable of supplying half of the capitals energy needs all by itself saving up to 450 million tons of oil annually

Russia has decades of experience in the nuclear energy But there were also major disasters along the way The Chernobyl nuclear power plant in present-day Ukraine exploded in April 1986 and is regarded as the worst atomic accident in history

After that many started to question the safety of atomic power But scientists such as Yaroslav Shtrombakh Kurchatov Institute Deputy Director are offering reassurances

ldquoAfter the Chernobyl incident a lot of work has been done to make the reactors safe Now in Russia there are still 11 chernobyl type of reactors operating but with all the modifications they are 100 saferdquo

Other countries are hoping to use the expertise of Russian nuclear energy technology with deals signed around the world When the new reactor is unveiled in two years it will by the latest contribution by Russia towards planning for a post-fossil fuel energy future

Russias Glonass system to get full state support - deputy PMhttpenrianrurussia20090512121546208html

MOSOW May 12 (RIA Novosti) - Russia will not cut funding for its Glonass satellite navigation program despite the current economic crisis a deputy prime minister said on Tuesday

Glonass - the Global Navigation Satellite System - is the Russian equivalent of the US Global Positioning System or GPS and is designed for both military and civilian use Both systems allow users to determine their positions to within a few meters

Despite economic difficulties financing [for the Glonass program] in 2009 will remain unchanged without any cuts or limitations Sergei Ivanov said at the International Satellite Navigation Forum in Moscow

Ivanov said the Glonass grouping currently consisted of 20 satellites The system requires 18 satellites for continuous navigation services covering the entire territory of the Russian Federation and 24 satellites to provide services worldwide

A total of 99 billion rubles ($360 million at the current exchange rate) was allocated for Glonass from the federal budget in 2007 and 47 billion rubles ($170 million) in 2006

Prime Minister Vladimir Putin signed a directive on September 12 2008 allocating an additional $26 billion to develop the system

Six new Glonass satellites will be added to the network in 2009

Head of Russias Federal Space Agency Anatoly Perminov earlier said the number of satellites in the Glonass network would be increased to 30 by 2011

New Russian fighter jet due by year-end httpwwwupicomTop_News20090511New-Russian-fighter-jet-due-by-year-endUPI-79481242073772

KOMSOMOLSK-ON-AMUR Russia May 11 (UPI) -- Russias fifth-generation jet fighter will undergo its first test flights by the end of the year military officials said Monday

Russian Deputy Prime Minister Sergei Ivanov told reporters after a shipbuilding meeting in the Far Eastern city of Komsomolsk-on-Amur that full-scale production of the advanced multi-role fighter will start in 2010 RIA Novosti reported

By the end of this year the plane will rise into the air and flight tests will begin Ivanov said

The first prototype of the fighter being developed by the Sukhoi aircraft maker is scheduled to make its maiden flight before the end of 2009 the news agency said

Military Commissions Armshttpwwwthemoscowtimescomarticle101042377020htm

The military commissioned intercontinental ballistic missiles and rockets for its newest air-defense systems last year as the government stepped up funding to restore its might

The army added 17 ICBMs four short-range Iskander missile complexes and 34 rockets for the S-400 air-defense systems Deputy Prime Minister Sergei Ivanov told Prime Minister Vladimir Putin on May 6 according to a transcript posted on the Cabinet web site

This year the country plans to spend 13 trillion rubles ($40 billion) on weapons upgrades as well as fuel and food for the military he said without giving comparative figures (Bloomberg)

Russia Stockpiles the Gems Awaiting the Return of Demand httpwwwnytimescom20090512businessglobal12diamondshtmlpagewanted=1amp_r=1amphpw

By ANDREW E KRAMERPublished May 11 2009

MOSCOW mdash The global recession sapped demand for all kinds of commodities mdash like steel and grain mdash yet small burlap bags are still arriving by the planeload at Russiarsquos state-owned diamond company

Each day the contents of the bags spill into the stainless steel hoppers of the receiving room The diamonds are washed and sorted by size clarity shape and quality then rather than being sent to be sold around the world they are wrapped in paper and whisked away to a vault mdash about three million carats worth of gems every month

ldquoEach one of them is so unusualrdquo said Irina V Tkachuk one of the few hundred people mostly women employed to sort the diamonds who sees thousands of them every day

ldquoIrsquom not a robot I sometimes think to myself lsquowow what a pretty diamond I would like that onersquo They are all so beautifulrdquo

It could be years before another woman admires that stone Russia quietly passed a milestone this year surpassing De Beers as the worldrsquos largest diamond producer But the global market for diamonds is so dismal that the Alrosa diamond company 90 percent owned by the Russian government has not sold a rough stone on the open market since December and has stockpiled them instead

As a result Russia has become the arbiter of global diamond prices Its decisions on production and sales will determine the value of diamonds on rings and in jewelry stores for years to come in one of the most surprising consequences of this recession

Largely because of the jewelry bear market De Beersrsquos fortunes have sunk Short of cash the company had to raise $800 million from stockholders in just the last six months

The recession also coincided with a settlement with European Union antitrust authorities that ended a longtime De Beers policy of stockpiling diamonds in cooperation with Alrosa to keep prices up

Though it is a major commodity producer Russia has traditionally not embraced policies that artificially keep prices up In oil for example Russia benefits from the oil cartelrsquos cuts in production but does not participate in them

Diamonds are an exception ldquoIf you donrsquot support the pricerdquo Andrei V Polyakov a spokesman for Alrosa said ldquoa diamond becomes a mere piece of carbonrdquo

In an attempt to carefully calibrate its re-entry on the global market without forcing prices still lower Russia is relying on two things the Soviet-era precious gem depository mdash created to hold jewelry confiscated from the aristocracy after the 1917 revolution mdash and capitalist investors whom Alrosa hopes will buy diamonds as an investment like gold

Russia is taking a leadership role in other ways too

Sergei Vybornov Alrosarsquos chief executive said that he had helped persuade the central bank of Angola mdash which like Russia is still relatively flush with oil money mdash to buy 30 percent of the production of Angolarsquos diamond mines keeping these stones off the market

And last fall Alrosa began what it called the St Petersburg Initiative along with De Beers and other large producers to invest collectively in generic diamond advertising

akin to De Beersrsquos promotion of the slogan ldquoDiamonds are foreverrdquo Russia assumed the task as De Beers has principally shifted to promoting its own branded gems

Still it is a precarious time for the Russian diamond company to assume leadership of the industry

Until last year De Beers produced about 40 percent of the global rough stone supply and Alrosa 25 percent But De Beers which is prohibited under its European Union antitrust agreement from stockpiling closed mines in response to the glut in rough stones Russia is loath to do that as authorities in Moscow gravely concerned about potential unrest by disgruntled unemployed workers try to keep workers on the payroll

In the first quarter De Beers reduced output by 91 percent compared with the previous year The diversified mining companies Rio Tinto and BHP Billiton also curbed production

Meanwhile the market for wholesale polished diamonds worth about $215 billion is expected to fall to about $12 billion in 2009 according to Polished Prices an analytical service for the industry

Rough diamond prices have fallen even more as much as 75 percent since their peak last July at some auctions

The two markets are distinct Typically about 60 percent of a rough diamond is lost as dust or shavings in the cutting process

Mr Vybornov blames diamond traders who pledged diamond stocks as loan collateral for part of the world glut When credit dried up last fall banks and other creditors seized those gems and sold them he says flooding the market By December his company decided to withdraw entirely from the market rather than further erode prices

Russia historically remained mostly a behind-the-scenes player perhaps because Soviet authorities would have had to perform some ideological gymnastics to promote a product consumed principally by the rich of the capitalist world Instead twisting politics the Soviets concluded a semisecret agreement with apartheid-era De Beers to sell Siberian diamonds in a way that would not undercut the market

After the collapse of the Soviet Union the Russian diamond industry created a formal alliance with De Beers selling the South African company half of each yearrsquos production at a discount intended to subsidize De Beersrsquos generic diamond advertising undertaken in the 1990s mostly in the United States

Now the Russians are in the driverrsquos seat

Charles Wyndham a former De Beers evaluator and co-founder of Polished Prices said Russia had thus far managed the transition well withholding gems to make more money in the long run rather than further depressing the market

ldquoWhatever one wants to say about the Russians they certainly arenrsquot stupidrdquo Mr Wyndham said

Alrosa is seeking to jump-start demand by selling gems under long-term contracts to wholesale buyers in Belgium Israel India and elsewhere Under these contracts six of which have been signed prices are set at a midpoint between the peak last August and this winter and fixed for a period of several years

ldquoA diamond ring should not cost $100rdquo Mr Vybornov said ldquoWe donrsquot want that type of clientrdquo

Alrosa is also working with a Moscow investment bank Leader a subsidiary of the Russian natural gas monopoly Gazprom to market diamonds to investors Under the plan investors would buy diamonds but the gems would not be released to jewelers for several years

It is a program essentially of outsourcing the stockpiling function to investors in exchange for the chance to profit from a possible recovery in the market

At one of Alrosarsquos cutting shops in one of Moscowrsquos outer districts Aleksandr A Malinin an adviser to the president of Alrosa showed a typical collection that might become the basis for such an investment vehicle

The gems fit in a felt box about the size of a laptop computer

The larger stones a circular-cut 10 carat flawless white and a princess-cut yellow were estimated at about $400000 The smaller ones ranged from $16000 to $100000 But the value of the box while surely several million dollars is something of a mystery just now given the depressed market

How the buy-in price for the stones will be set and how the company will determine when the price goes up and down is unclear Mr Malinin said

ldquoWe have to tell people that diamonds are valuablerdquo he said ldquoWe are trying to maintain the price just as De Beers did as all diamond producing countries do But what we are doing is selling an illusionrdquo meaning a product with no utility and a price that depends on the continued sense of scarcity where there is none

At the Alrosa unit that receives diamonds called the United Selling Organization where about 90 percent of the output of the Siberian mines arrives for processing Elena V Kapustkina pours about 45000 carats of diamonds though a stainless steel sieve every day to sort them by size

ldquoItrsquos just a jobrdquo she said

When asked whether diamonds had lost their romance for her Ms Kapustkina paused looked down at the pile of gems on her table and blushed

In fact she said her husband a truck driver gave her a half-carat ring 22 years ago ldquoOf course I love itrdquo she said ldquoItrsquos from my husbandrdquo

UK rights activists defends banned Moscow Gay Pride paradehttpwwwmosnewscomsociety200905121599

Today 1036 PM

A prominent British human rights activist has praised the decision of Moscow gays to hold a Gay Pride parade that has been banned by the city authorities

Although I am determined to support our Russian and Belarusian comrades like them I am anxious about what may happen to us But we have to take some risks otherwise the homophobes and authoritarians will winrdquo Peter Tatchell was quoted by politicscouk as saying Monday

At Moscow Pride in 2007 I was beaten almost unconscious by right-wing extremists while the police stood by and watched They then arrested me

There have been warnings that anyone joining the march will face tough measures and I dont have much confidence that the Moscow police will accept our right to protest or that they will protect us against neo-Nazi violence he said

Gay Pride marches in Russia have a habit of attracting neo-Nazis to demonstrate against them Gay rights activists say police often stand by while neo-fascists attack the demonstrations

This Saturdays Moscow Gay Pride parade has been renamed Slavic Gay Pride to support the lesbian gay bisexual and transgender equality struggles in all Slavic countries Russian and non-Russian

It will coincide with the final of the Eurovision song contest which is being held later that night also in Moscow

National Economic Trends

Russia daily cbank swap limit at 5 bln rblshttpwwwforbescomfeedsafx20090512afx6408636html

051209 0345 AM EDT

MOSCOW May 12 (Reuters) - Russia set the daily limit for currency swap operations with the central bank at 5 billion roubles ($1536 million) on Tuesday the same as in the previous trading session on Friday

Limits on how much foreign currency banks can swap for roubles in the central bank were introduced from Oct 20 in a bid to hinder currency speculators Operations which do not involve the central bank are unaffected ($1=3255 Rouble)

Russia Pension Funds Gain Most in Four Years Kommersant Sayshttpwwwbloombergcomappsnewspid=newsarchiveampsid=aJYkqJZhgBY0

By William Mauldin

May 12 (Bloomberg) -- Russiarsquos official pension funds grew at an annualized 297 percent rate in the first quarter the best three-month return in four years Kommersant said

Troika Dialog Russiarsquos oldest brokerage managed the pension fund with the best performance the newspaper said citing data it compiled itself

Vnesheconombank Russiarsquos state development bank oversees 388 billion rubles ($12 billion) in pensions while non-government managers registered with the state manage 356 billion rubles Kommersant reported

The price of Russiarsquos benchmark 30-year dollar bond increased 74 percent in the first quarter or an annualized 33 percent according to data compiled by Bloomberg

To contact the reporter on this story William Mauldin in Moscow at wmauldin1bloombergnet


New official forecast 6 GDP decline in 2009httpwwwbusinessneweuropeeudispatch_text8573

Rencap RussiaTuesday May 12 2009

On 24 Apr Reuters reported that the Ministry of Economic Development (MET)

downgraded its 2009 macroeconomic forecasts The MET now expects the economy to shrink 6 this year almost three times more than its previous forecast of a 22 decline in 2009 (made in Mar 2009) The MET expects industrial production to drop 91 this year (from a previously forecast 74 decline) fixed investment to decline 211 (from a previous figure of 138) and retail sales will decrease 49 (from a growth forecast of 03)

We think that the main reason for lowering forecasts revisions is the poor performance of the Russian economy in 1Q09

According to MET estimates GDP dropped 95 YoY in 1Q09 The MET had initially estimated GDP would decline 5-6 YoY in 1Q09 (this estimation was used for the METs previous macro forecasts) The new macroeconomic forecast will be considered by the government budget committee at the end of May

EBRD cuts Russias 2009 growth forecast from 1 to -75httpwwwbusinessneweuropeeudispatch_text8573

Alfa RussiaTuesday May 12 2009

In response to the collapse in Russias GDP by an estimated 95 in 1Q09 the EBRD has lowered its GDP growth forecast to -75 for this year This new estimate is subject to revision in the event that the 1Q09 growth structure changes or the final GDP figure turns out different from the current estimate

We note that the EBRDs new forecast assumes the worst-case scenario for Russian economic growth in 2009 It is also important that the Russian governments new forecast expected to be in the range of -6 to -74 is between the recent IMF forecast and the new EBRD figure

Our take is that investment growth will be central to determining GDP growth in Russia this year and the next The countrys consumption boom of the last several years translated into rapid import growth and thus was largely offset by the decline in net exports In a similar way the decline in consumption expected in 2009-2010 will be compensated for by a decline in imports Also the key negative surprise of 1Q09 which explains the very weak growth was the 15 decline in investment which showed the states inability to carry out a proactive growth-focused policy Thus we believe a more efficient fiscal stimulus is the best way to avoid a contraction in GDP in the coming years

Business Energy or Environmental regulations or discussions

VEB Toughens Standardshttpwwwthemoscowtimescomarticle100942377012htm

Vneshekonombank which dispenses Russias economic stimulus funds will grant subordinated loans only to banks that have 35 billion rubles ($108 million) of capital limiting access to fewer than 100 lenders

VEB also will require banks to lend the money they borrow to priority industries as the government seeks to revive the shrinking economy the state lender said late Thursday (Bloomberg)

VEB to lend $250mln to airlines for 13 years for acquisition of Superjets ndash Ivanov

ttpwwwthemoscowtimescomarticle100942377012htmVneshekonombank will provide $250 million in 13-year loans to local airlines for orders of Sukhoi Civil Aircraft Cos SuperJet regional aircraft Deputy Prime Minister Sergei Ivanov said Monday (Bloomberg)

VEB approves subordinated loans to Russian Standard and Promsvyazbankhttpwwwbusinessneweuropeeudispatch_text8573


Last Thursday (7 May) VEB announced that its supervisory board had granted approval to provide subordinated loans totalling RUB192bn to 10 privately-owned banks We view the announcement as positive for both the individual institutions and the entire Russian banking system The largest amounts have been assigned to Promsvyazbank and Russian Standard Bank (RUB40bn and RUB496bn respectively)

With regard to Promsvyazbank the receipt of capital from the state should be considered in conjunction with accelerated loan-loss provisioning In 1Q09 the bank increased loan provisioning 17 (from 63 to 80 according to RAS) and therefore reported a loss of RUB2bn Given the capital injection from the state the bank will be able to support its capital adequacy at acceptable levels and continue building provisions which we regard as a reasonably positive scenario

With regard to Russian Standard Bank we do not think the application for VEB loans was driven by a need for capital as even before this the banks total capital adequacy ratio would exceed 20 while the new capital raising would bring it to around 23 Therefore we tend to view the RUB5bn loan from VEB as a long-term funding source which should be very useful to the bank in the current market conditions

We see no direct implications of Thursdays announcement for bond pricing However we reiterate our positive view on Russian Standards credit (especially given the very large scale of funding support from the state) and note that despite the recent strong

performance of its bonds yields of around 35-40 (RUSB-10 and 11) still seem attractive to us

Maxim Raskosnov

Russian credit growth decelerating rapidlyhttpwwwbusinessneweuropeeudispatch_text8573

Citibank RussiaMay 12 2009

Access to funding remains limited The Russian banking system relies to a large extent on wholesale funding - of the top 15 banks only Sberbank has a ratio of corporate and individuals deposits to total liabilities of about 50 While the CBR has stepped in aggressively with the liquidity support in 4Q09 it has been short-term and is being gradually reduced in 1Q09 Furthermore deposits from individuals and corporates have stagnated as a result of the concerns about the health of the financial system and economic slowdown (real GDP contracted in 1Q09 by 95 according to the Ministry of Economic Development)

Banks asset quality is deteriorating rapidly The CBR reports loans overdue which is the proportion of the loan overdue (as opposed to the total amount of the loan) by more than one day Total loans overdue have increased to about 3 for the largest banks with loans overdue increasing most rapidly for those banks in the 6-20th by asset size

According to our estimates NPLs based on asset classification are most likely already over 10 for most banks and look set to peak at 20 by the end of the year In 1Q many banks already registered losses and therefore will have to absorb increasing NPLs mostly from capital in 2009

The sharp deceleration in credits is likely to lead to lower growth and higher NPLs

According to the Interfax data credit growth turned negative QoQ for most of the leading banks in 1Q09 We are concerned about the reinforcing downwards spiral where limited access to credit may lead to lower economic performance and subsequently higher NPLs However in our view setting numeric credit growth targets will address the symptoms rather than the disease The key should be addressing banks undercapitalisation and improving risk management procedures

Electricity consumption decreased 81y-o-y during the first week of Mayhttpwwwbusinessneweuropeeudispatch_text8573


Electricity consumption decreased 81y-o-y and 61 w-o-w during the first week of May Interfax reports citing Market Council The decline looks to be high compared to the range of negative 4-65 seen in February-April this year and higher than the sharp January contraction of -77 yoy

Mechels Kuzbass power sales co could pass on 2008 dividendshttpwwwinterfaxcom3492676newsaspx

MOSCOW May 12 (Interfax) - Directors at the Mechel (RTS MTLR)coal and steel groups Kuzbass Power sales Company (Kuzbassenergosbyt)(RTS KZBE) have recommended a dividend waiver for 2008 the companysaid in materials Net profit for 2008 was 22712 million rubles of which the companyproposes to retain 2006 million rubles and reinvest the remainder The company did not pay dividends for 2007 either The AGM takes place on June 15 and the register closed on May 8 OJSC Mechel-Energo owns 7214 ordinary shares and Siberian Coaland Energy Company (SUEK) owns 252 of Kuzbassenergosbyt whichcontrols 36 of the Kemerovo regions electricity market

Severstal to unveil Q1 IFRS results May 15httpwwwinterfaxcom3492664newsaspx

MOSCOW May 12 (Interfax) - Severstal (RTS CHMF) will unveil itsQ1 2009 financial results to International Financial Reporting Standards(IFRS) on May 15 the Russian steel major said

Russian steelmakers gain market sharehttpwwwbusinessneweuropeeudispatch_text8573


Event On Friday (8 May) NLMK said it had restarted its 17mn tpa blast furnace (BF) 4 The Lipetsk production site is currently running all five of its blast furnaces NLMK expects 83mnt of steel output at Lipetsk and total steel output of 10mnt this year Earlier last week Evraz confirmed that its only idled BF (23mn tpa capacity) is expected to be started at the ZSMK site in June The decision reflects rising steel demand in China According to Evrazs CFO Pavel Tatianin ZSMK may successfully compete with the Chinese steel producers due to technical upgrade conducted on ZSMK facilities in 2005-2007

The decisions of steel producers underpin our view that Russian steel mills remain far more competitive on major export markets in the current environment Evraz and NLMK

maintain 15-20 global slab market shares Mass media speculated last week that Corus may shut its Teesside plant in the UK as a slab deal had fallen through In 2004 Corus signed an offtake agreement with a Marcegaglia-Dongkuk-Duferco consortium to sell 78 of the plants slab production for 10 years The consortium members have since initiated moves to terminate the contract Corus is unable to break even at the Teesside plant at $300-330tonne (FOB) for slab and the consortium members are unwilling to source slabs from Corus at a higher price In our view Russian steelmakers have a fair chance of taking Teessides market share in this situation We note that about 50 of NLMKs 1Q09 slab volumes were supplied to NLMK-Duferco JV facilities

Boris Krasnojenov

Deripaska may sell construction business-paperhttpwwwreuterscomarticlerbssHomebuildingidUSLC56250820090512

Tue May 12 2009 239am EDT

MOSCOW May 12 (Reuters) - Indebted Russian tycoon Oleg Deripaska is seeking a buyer for his construction and development businesses Vedomosti business daily reported on Tuesday quoting unnamed sources

The newspaper quoted a source close to Deripaskas holding company Basic Element as saying that the businessmen had asked Sputnik consultancy to search for a buyer

Another source this time close to Deripaskas construction firm Glavstroi said options under discussion included the partial sale of the least profitable businesses and the total sale of all construction and development units

The daily quoted Basic Element spokesman Sergei Babichenko as saying the construction business remained a priority for the firm

The daily said Glavstroi had debts of around 47 billion roubles ($144 billion) owed mainly to Russian banks Analysts estimate the total debt accumulated by those companies in which Basic Element owns a stake at about $20 billion Under a separate deal Deripaska is set to hand back a 25 percent stake in Austrian builder Strabag (STRVVI Quote Profile Research Stock Buzz) to Strabags other key shareholders ($1=3255 Rouble) (Writing by Gleb Bryanski Editing by Jon Loades-Carter)

IUD suspends construction of steel rolling plant in Armavirhttpsteelgurucomnewsrussianhtml

Tuesday 12 May 2009

Steelorbis reported that the Ukrainian steel producer Industrial Union of Donbass has temporarily frozen the construction of its new steel rolling plant in Armavir located in Krasnodar Russia due to the weakening of its financial performance

According to the reports IUD is currently looking to secure funds from European banks in order to continue the construction of its plant in Armavir and has invited an international engineering consulting company Atkins which is carrying out an independent capital project evaluation and is designing an international business plan for the company The further construction of the plant depends on the evaluation in question

IUD started the construction of its new steel rolling plant in Armavir in September 2006 and was planning to invest about USD 200 million to 250 million The plant will include a steel melting shop of 15 million tonnes annual capacity a bar and section mill of 600000 tonne to 700000 tonne annual capacity and a wire rod mill with an annual capacity of 400000 tonnes to 500000 tonnes

(Sourced from Steelorbis)

Railway Cargo Turnover Continuous Recoveryhttpwwwbusinessneweuropeeudispatch_text8573

VTB CapitalMay 12 2009

Russian Railways has released highlights of its April transportation statistics As railways account for 85 of cargo transportation in Russia the dynamics are a good proxy for changes in industrial output

In April railway cargo turnover dropped 146 YoY an improvement on the 201 YoY decrease in March The decelerating decline in transportation might imply that the drop in industrial production (137 YoY in March) is also slowing (we estimate to 119 YoY in April) This corresponds with the constant improvements in the Russian Manufacturing PMI which rose from 42 in March to 433 in April

Analysing transportation volume dynamics for particular cargos might shed light on the situation in specific sectors of the economy The decelerating drop in turnover corresponds with a slight improvement in the key cargos coal (25 of total cargo in March) dropped 13 compared with the 16 YoY fall in March while oil and oil products (22 of the total) were down only 2 YoY in April from the 4 YoY decrease in the previous month While the latter is one of the most resilient cargos due to the relative stability of oil production an improvement in coal transportation reflects a revival in the metals industry Steel makers used up their inventories and are currently restocking iron ore also demonstrated an improvement from -19 YoY in March to -16 YoY in April However ferrous metals themselves have not demonstrated positive dynamics yet (-36 in April vs the 32 drop in April) although we expect to see this in the coming months The construction materials segment (11 of the total) also continues

to stagnate with transportation volumes down 39 YoY

Russian truck maker KamAZ resumes work after three-week halt httpenrianrubusiness20090512121545362html

KAZAN May 12 (RIA Novosti) - Russias largest truck maker KamAZ has resumed production after a lack of orders led to a three-week halt a spokesman for the truck producer said on Tuesday

The main assembly line was halted on April 23 as KamAZ completed its orders for the month Today KamAZs main assembly line and all production units have restarted work the spokesman said

The ongoing global financial and economic crisis has caused a slump in world demand for vehicles Since the start of the year the Volga-based truck producer has been based only on the concrete orders In the past 18 months KamAZ has suspended production several times

KamAZ dispatched over 2500 trucks and auto sets to consumers in April or 300 vehicles more than in March the spokesman said

KamAZ which is based in Naberezhnye Chelny in the Volga republic of Tatarstan produced about 13200 trucks in January-March 2009 or 61 less than in the same period last year the spokesman said

Auto factories throughout Russia have been hard-hit by rising prices for auto parts and other supplies and declining sales

GAZ autoworks restarts conveyor Tue after May holidays


NIZHNY NOVGOROD May 12 (Itar-Tass) - Following the May holidays the Gorky autoworks (GAZ) on Tuesday restarts the conveyor assembly line which was shut down on April 30

An official in the press service of the GAZ Group Company of which the autoworks is part has told Itar-Tass that the factory is planning to operate on a four-workday basis

The transition from a three-day schedule to a four-day one is prompted by the need to make up for the days-off during the May holidays the press service official specified

The Company official pointedout that the autoworks would operate within the scope of the management-approved system for a flexible planning of production The system

makes it possible to analyse and take into account an actual demand for motor vehicles on the market

GAZ Group executives said the May production plans did not change so far In May the autoworks is planning to turn out about 5000 lightweight commercial and medium-tonnage vehicles

The GAZ Group is Russias largest maker of commercial motor vehicles and roadmakng machinery The company comprises the Gorky autoworks 18 vehicle makers in Russia sales and service organisations

Monday May 11 2009 903am EDT

Iridium seeks Russian satellite services markethttpwwwbizjournalscomwashingtonstories20090511daily3html

Washington Business Journal - by Tucker Echols Staff Reporter

US satellites have passed over Russia for a generation Now Iridium Satellite LLC is offering the Russians a chance to use them

Bethesda-based Iridium Satellite announced Monday that is has begun the process of entering the Russian market for mobile satellite services forming a company called Iridium Communications Russia OOO to pursue a license for providing such services in Russia

Iridium believes its low-earth orbiting satellite constellation can provide services where no other means of communication exist in Russia particularly across extensive open land masses and northern sea routes without telecommunications infrastructure

New Arctic bulk carrier for Murmansk Shipping Companyhttpwwwbarentsobservercomnew-arctic-bulk-carrier-for-murmansk-shipping-company4589201-16175html

2009-05-11 The Murmansk Shipping Company has officially taken over its new ice protected bulk carrier constructed at the Chinese Chengxi Shipyard

The ship ldquoSevernaya Zemlyardquo is the last of five new ice protected vessels of the Russian shipping company The 31755 ton deadweight vessel will be registered in the Russian Ship Register a press release from the company reads

The Murmansk Shipping Company handles about 80 percent of shipping along the Northern Sea Route The company fleet has a total deadweight of 12 million tons Until

last year the company also had management responsibility for the Russian state-owned fleet of nuclear powered icebreakers

MOSCOW BLOG Investors take big bets httpwwwbusinessneweuropeeustory1593MOSCOW_BLOG_Investors_take_big_bets

bne May 12 2009

The outlook for the global economy is black according to the International Monetary Fund (IMF) and others but in the last few months a few investors have made massive bets while stock markets across the region have soared A big disconnect has appeared between what the analysts say and investors believe

Official agencies are now almost competing with each other in terms of portraying a grim global outlook for the regionglobal economy Royal Bank of Scotlands Timothy Ash said in a note on May 7 The contrast is stark with rallying marketsrising risk appetite Someone is evidently wrong or else this just provides a very low base for a jump in 2010-2011

Now that investors are no long dodging falling rocks some have started to think about the long term and are betting heavily that emerging Europe and Russia in particular will return to its growth path albeit at a reduced rate sometime soon

New Zealand billionaire Richard Chandler made a huge bet at the end of March shortly after the main Russian stock market index (RTS) passed its low buying a 3 stake in Russias state-owned Sberbank for about $430m Kommersant reported In just two months Chandler has almost doubled his money already

Likewise at the end of December Prosperity Capital Management the largest portfolio fund dedicated to Eastern Europe took in its single biggest investment ever The Norwegian Petroleum Fund the Scandinavian sovereign wealth fund pumped an undisclosed amount into the fund which analysts say must have also on the order of several hundred million dollars

And at the bottom of the scale Central and Eastern Europes leading retail fund Swedens East Capital reports that it has also seen inflows in the last two months as confidence returns I am a lot more optimistic but it is easy to be optimistic against the negative backdrop of only a few weeks ago The investment sentiment has improved and we are seeing inflows especially in Russia says Karine Hirn co-founder of East Capital Is this just a bear market rally It is hard to say but we need three things to see growth that is not just a function of short-term trading

At the start of this year few banks would be drawn on their end-of-year target for the

RTS but those that did put a number on it guess it would reach about 1000 by the end of December Now it looks like the RTS will pass the 1000-point in the next few weeks

The trend is your friend

By now its clear that the rally on emerging Europes exchanges in the last two months is more than just a bear market rally It has been too strong and gone on for too long

Equity markets typically oversell in the midst of a crisis and then bounce back to more reasonable levels Looking back to the 1998 financial crisis investors enjoyed a bear market in October But that time the market rose 20 over about two weeks and then leveled off This time Russia has enjoyed nine weeks of uninterrupted inflows and the index is up just short of 90 from the March lows to close at 938 on May 8 ndash still well off the 2000 mark the RTS was at last August as the storm clouds began to gather

Why has the market rallied so strongly There are several factors going into the pot

First is oil prices have firmed and speculation in February that the cost of a barrel would fall to $20-$25 dollars has proven unfounded Instead $40 has proven to be a pretty solid floor to the prices and Russia runs a trade surplus at this level The subsequent rise of oil prices since the start of spring to $58 at the time of writing has fuelled enthusiasm

Second is sentiment Russian equity prices were clearly unduly punished in the sell-off falling by more than any other market ndash both emerging and developed ndash in the world At its nadir Russian stocks were by far the cheapest in the world which always tempts in some bottom fishers with a long-term perspective The difference this time is the

subsequent rally has been so strong that some investors have been tempted in to ride the rally giving it an extra impetus

Global emerging market funds have avoided Russia in the first quarter but Chris Weafer of Uralsib says the rally was so strong that some funds were forced to join the party The big investment funds neither sold into the strength of the market nor added any significant new positions so that at end March the average portfolio position in Russia remained underweight But as the strong performance of Russian equities continued through April evidence from the weekly funds flow is that investors are becoming less comfortable with an underweight ndash or even neutral ndash position By the end of April investors were starting to put more sizeable new money into Russia funds says Weafer

A third factor is that dedicated Russia investors have seen this movie before and know how it ends Russias future in 1998 was very uncertain It had a drunk president controlled by a small group of powerful oligarchs Capital flight was rampant and analysts cheered when economic growth turned positive for the first time for a few months in 1997 No one had any idea that the economy would blossom and put in a record 10 growth only a year after the crash But with a decade of restructuring and investment (albeit too little too late) under its belt investors close to the country have a religious faith that the growth will resume and good companies that now have a 10-year track record will return to profitability sometime in the foreseeable future Having done a lot of work to build up their credit histories and prove their business model is viable when confidence returns the pick-up process should go a lot faster than it did in the first few years of this decade

Growth and the Twilight Zone

There is still a lot of uncertainty about where things go from here VTB Capitals Ivan Ivanchenko and Kirill Nikiforov caught the mood nicely with a spoof conversation between a cautious Russian investor hesitating about investing and a member of what used to be called the hooray crowd of Russia enthusiasts who said nows the time to

cash in

The debate over the prospects for growth illustrates clearly the two camps The IMF has come out with extremely pessimistic forecasts predicting Russias economy will contract by 6 this year On May 7 the EBRD also released its forecast predicting a milder 38 contraction this year and most investment banks have similar forecasts However fund managers appear a lot more optimistic and a few are guessing economic growth will be flat for 2009 on the back of rising oil prices and state spending

The release of the IMFs Global Economic Forecast paper caused a round of editorials asking if the fund had overdone it But the IMF has a vested interest in taking the most pessimistic view it can In times of crisis it needs to create an atmosphere of gloom and asks governments to make politically difficult cuts The best way to generate the political will to push these measures through and sell them to the population is to persuade everyone that the world is on the edge of a chasm For example in 1999 the IMF predicted Russias economy would contract by more than 5 and hyperinflation would return just as the economy began to powerfully expand

Brokers too tend to err on the downside albeit for different reasons No one was ever punished for picking a stock that suddenly did a lot better than expected but you can lose your job very fast for choosing stocks that subsequently fall in value Again it was well into the summer of 2000 before Russias investment banks began to talk up the market again only after the growth was blindingly obvious

One interesting way of explaining why stock markets might rally while economies are still contracting is what Robert Buckland of Citigroup Capital Markets calls the Twilight Zone Corporate earnings may still be falling as the last of the economic crisis works its way through but share prices stabilize simply because the shares are so cheap that some patient investors are tempted to buy them

The Twilight Zone is the second of three phases in a crash that comes between the collapse of a market and its return to normal growth Buckland doesnt expect company earnings to start recovering until next year but currently that doesnt matter as everyone is assuming they will In the meantime you buy as the stocks are cheap The third phase will start next year when the consensus is the region returns to growth and share prices reconnect with a companys ability to make profits

Its different this time

The strength of this rally implies that investors believe its different this time And as the old investment bank saw goes these are the four most expensive words in the English language

The academics say that following a deep crash it typically takes three and half years for a market to recover Indeed thats exactly what happened after 1998 as the RTS didnt return to its pre-crisis level of about 500 until October 2003

Still the optimists can make some pretty strong arguments for their case A couple of unprecedented things have just happened Unlike 1929 in the west and 1998 in the east global governments have come together to put in place a $1 trillion rescue package Given this crisis remains largely a crisis of confidence ndash remember unlike 1998 nothing in Russia is actually broken and all the banks are still standing ndash if this money can restore global confidence in theory the recovery period could be much shorter

Russias economy has been knocked back to where it was in about 2003 but despite all the criticism concerning the Kremlins failure to diversify the economy an enormous amount of progress has been made If you compare Russias economy in 1998 to this one it is like night and day This economy is fundamentally in better shape on nearly every count The only indicators that are the same then and now is the average price to earnings ratio of Russian stocks ndash which simply doesnt make sense says Liam Halligan chief economist at Prosperity Capital Management

Separately the crisis is fundamentally a problem of failures in the western banking system which has spilled over to impact the east However the investment case and the convergence story in these markets remain intact

An even more interesting extension of this argument is that the world has fundamentally changed the decision to hold a G20 rather than a G7 or G8 meeting to bail out the world is the most concrete testament yet that the moniker emerging no longer applies to many of the countries in CEE Asia and Latin America Proponents of this argument point out that the world is in the middle of an unprecedented shift in economic power following the fall of communism Everyone is pointing to China one of the only countries in the world still growing strongly which indeed has been the top destination for investors since the start of this year They admit that Chinas GDP accounts for only 9 of the global total but its extraordinary demand coupled with that of Russia and the other emerging markets will bring this crisis to an end a lot sooner than normal Certainly there can be little debate that the BRIC countries (China Russia India Brazil) will emerge from this debacle with a bigger share of the global economy (barring another train wreck)

Against this the naysayers have a simple and very strong argument it is never different The rally on the stock market does seem to be overdone Oil prices are rising but so is unemployment which is driving down demand And while there are green shoots to point to in general economies around the world are still going south Another crunch is later this year is not unlikely at all if sentiment should shift again

VTBCs Ivanchenko and Nikiforov sum up the debate nicely thus This conversation could last foreverhellip as the arguments on both the cautious and the risk-taking sides are valid However the bottom line is that we are walking in the dark here and no amount of evidence can convincingly prove that the markets have turned for good

Activity in the Oil and Gas sector (including regulatory)

Chinese Envoy to Russia Oil Pipeline Serves Strategic Goals of Both Sides BBC Monitoring 5112009URL httpwwwrigzonecomnewsarticleaspa_id=75986The construction of the China-Russia oil pipeline conforms with the strategic goals of China and Russia to diversify the formers energy imports and latters energy exports Chinese Ambassador to Russia Liu Guchang has saidThe move reflects the two countries confidence and determination to tide over together the current global economic downturn Liu said in a recent written interview with Xinhua on SundayThe signing of a package of oil cooperation deals between China and Russia as well as the start of the oil pipeline project marked a major breakthrough in their energy cooperation represented a new height of China-Russia strategic partnership of cooperation and further substantiate this partnership Liu said

Trade of crude via the pipeline will help stabilize and enhance the growth in bilateral trade the diplomat addedUnder the agreement reached between both countries China and Russia will jointly build and operate the pipeline from Russias Siberian city of Skovorodino to Chinas northeastern city of Daqing as its terminal via Chinas border city of MoheThe construction of the Russian part of the pipeline started on April 27 and the Chinese part will be launched in mid-May The pipeline with an annual capacity of 15 million tons of crude to China within 20 years is expected to go into operation in October 2010The two sides will study the feasibility of increasing its delivery capacity after the pipeline is put into production Liu said The project will ensure stable and secure oil supplies to China open a stable and sound market for Russian oil and boost the cooperation between enterprises of the two countries in oil exploration and refining Liu saidSuch a cooperation mode may well serve as a good example for the two sides to further broaden and deepen their all-round long-term and stable energy cooperation in natural gas nuclear energy and electric power Liu said

Transneft negotiates placement of US$1bn Eurobondshttpwwwbusinessneweuropeeudispatch_text8573


Transneft recently secured a US$10bn loan from China and plans to receive the funds by the summer The company intends to use the proceeds for construction of ESPO (East Siberia - Pacific Ocean) pipeline The news on the Eurobond placement may indicate that the loan terms were less favourable compared to ones currently available in the bond markets due to growing interest in corporate bonds issuance

LUKoil makes an offer to RITEK minoritieshttpwwwbusinessneweuropeeudispatch_text8573


Russian media reports that LUKoil made an offer to RITEK minority shareholders of R211 per ordinary and preferred share The total price for the acquisition of shares it does not already own is $240m LUKoil has a 746 stake in the company RITEK produced 29m tons of oil in 2008 and has 326m tons of oil reserves according to the Russian C1 and C2 classifications

LUKoil has publicly disclosed its intention to acquire minority stakes in consolidated subsidiaries This offer suggests that LUKoil is paying $16000 per bpd of 2008 production while it is trading at about $22000 per bpd itself

The acquisition of minority stakes generates value for existing shareholders provided the

acquirer pays less than its own market value

LUKOIL Caspian development continues as plannedhttpwwwbusinessneweuropeeudispatch_text8573

UralSib RussiaMay 12 2009

First Caspian offshore platform basement anchored On Friday newswires reported that LUKOIL (LKOH - Hold) had anchored the 1340-ton basement block of its first stationary ice-resistant platform at the Yuriy Korchagin oil field on the Caspian Sea The company plans to complete construction of the platform on this field in 2009 This news is positive from a strategic standpoint as it confirms LUKOILs intentions to step up Caspian Sea development

LUKOIL regards the region as its second core green field production center after Timano-Pechora

Vast reserve base From 1995-2008 LUKOIL discovered seven oil and gas fields in the Russian sector of the Caspian Sea V Filanovsky (3P reserves of 16 bln boe) Yu Korchagin (3P reserves of 570 mln boe) Khvalynskoye 170- km Rakoushechnoye Sarmatskoye and Centralnoye (discovered in May 2008 with geological resources of 730 mln boe) LUKOIL will launch development of the region with the V Filanovskiy and Yu Korchagin fields In addition LUKOIL has joint ventures with Rosneft in the Russian sector of the Caspian Sea and several PSA projects in the Kazakhstan and Azerbaijan offshore zones of the Caspian Sea

to support future production growth LUKOIL plans to start crude oil production at the Yu Korchagin and V Filanovsky fields in December 2009 and 2011 respectively The company estimates that the Yu Korchagin and V

Filanovsky fields will provide about 17 mbpa (23 mtpa) and 66 mbpa (91 mtpa) of crude by 2015 respectively In our DCF-model Caspian development starts in 2010 and reaches 88 mbpa for all the projects by 2015 which comprises 12 of LUKOILs total estimated production The timing of the project and the production levels are in line with our DCF assumptions and are priced in our Hold recommendation for the stock and $39share target price

Victor Mishnyakov

Gazprom

GazpromDESFA agreed on Greek part of South Stream httpwwwfocus-fennetindexphpid=n180732

12 May 2009 | 0947 | FOCUS News Agency

Athens The Hellenic Gas Transmission System Operator DESFA and Russian Gazprom had signed an agreement on establishing joint company which will build and manage Greek part of South Stream pipeline Naftemporiki informsAccording to information Greek Minister of Development Kostis Hatzidakis will meet with Russian Ambassador to Greece on Wednesday to consider details on signing the agreement It will be signed Friday in MoscowSuch agreements had been signed with Serbia and Ukraine- countries through which north part of the pipeline will passSouth part of the pipeline will past through Greece and will reach Italy through underwater equipment Its capacity is about 10 bln m2 per yearSignificant part of the equipment will pass through Bulgaria from where it will ramify to Serbia and GreeceAgreement between Gazprоm and Bulgarian company has not been signed yet due to dissensions on network usage It is about to be signed after Russian and Bulgarian Prime Ministers Vladimir Putin and Sergey Stanishev had agreed on Moscow to built separate network on pipelinersquos transit passing

Gazprom and Eni set to sign one more intermediate agreement on South Streamhttpwwwbusinessneweuropeeudispatch_text8573


According to todays Kommersant on Friday (May 15) the Prime Ministers of Russia and Italy are going to sign one more intermediate agreement on the construction of the South Stream pipeline project However some disagreements still persist in particular over the terms of gas marketing in the territory of transit countries and over volumes of gas sales revenues from which should be split between Russia and Italy Although this news adds some positives to the probability of this project being realized and especially in light of the recent refusal from Turkmenistan to sign the agreement on Nabucco we treat it as NEUTRAL for Gazprom

MAY 12 2009 419 AM ET

UPDATE Polish PGNiG OKs New Short-Term Deal With Gazprom httponlinewsjcomarticleBT-CO-20090512-703773html

WARSAW (Dow Jones)--Polands gas monopoly Polskie Gornictwo Naftowe i Gazownictwo SA (PGNWA) or PGNiG Tuesday approved terms for a new short-term agreement with Gazprom Export a unit of Russian natural gas company OA) Gazprom (GAZPRS) PGNiG said in a statement Under the agreement Gazprom will deliver 1024 cubic meters of natural gas by Sept 30 The value of the agreement is about $300 million PGNiG said The deal replaces an agreement between PGNiG and Rosukrenergo AG a Swiss-based trader jointly owned by Gazprom and two Ukrainian businessmen

In February Rosukrenergo was eliminated as an intermediary following a deal between Gazprom and Ukraine to end a dispute which caused a halt in Russian gas exports to Europe via Ukraine at the beginning of 2009 Supplies from Rosukrenergo amounted to 24 of Polish imports via its eastern borders -By Malgorzata Halaba Dow Jones Newswires +4822 447-2430 malgorzatahalabadowjonescom

RosGas AG to Control 20 Percent of Hungarian Gas Distributionhttpwwwjamestownorgsingleno_cache=1amptx_ttnews[tt_news]=34975amptx_ttnews[backPid]=7ampcHash=94c6684964

Publication Eurasia Daily Monitor Volume 6 Issue 90May 11 2009 1119 AM Age 14 hrsBy Roman KupchinskyBarely nine days after the Hungarian gas trader Emfesz KFT announced that it will begin receiving supplies of 3 billion cubic meters annually from the Zug (Switzerland) based company RosGas AG rather than the now inactive RosUkrEnergo (RUE) the Russian press reported that Emfesz has been sold to RosGas (EDM May 5 Vedomosti May 7) Thus RosGas a little-known company now controls 20 percent of the Hungarian domestic gas distribution market

Emfesz was owned by Dmytro Firtash a Ukrainian businessman who is also the 45 percent owner of RUE The company was created in 2003 when Firtash secretly owned the Hungarian-based company Eural Trans Gas (ETG) which then became the intermediary for Turkmen gas sales to Ukraine

ETG from its inception was a highly controversial company Numerous media reports claimed that it was linked to Semen Mogilevich an alleged member of the Russian mafia wanted by the FBI for major fraud ETG denied these charges but the suspicions did not vanish In January 2008 Mogilevich was arrested in Moscow on charges of aiding and abetting a tax evasion scheme but many observers believed this was false and that his arrest was directly linked to a struggle between Firtash and Gazprom over the control of Emfesz According to informed sources prior to his arrest Mogilevich disclosed that Gazprom was determined to take over Emfesz and that he had played a role in this plot

As the controversy surrounding ETG grew Gazprom decided to break its links with the company and in 2004 it created RosUkrEnergo to take its place - but Firtash remained and he was allowed to control 45 percent of RUE along with Ivan Fursin -another Ukrainian businessman with a 5 percent share Gazprom meanwhile along with then-Russian President Vladimir Putin and current President Dmitry Medvedev audaciously claimed that they did not know the identity of the 50 percent owners of RUE

An article in Vedomosti on May 7 written by Irina Reznik a journalist with long-standing high-level Gazprom contacts cited unnamed sources close to Gazprom and Emfesz who said that RosGas will be controlled by the Bulgarian gas middleman

company Overgas

Overgas like RosGas is a highly opaque structure In February 2009 after the Ukrainian-Russian gas conflict ended and deliveries were restored to Bulgaria government officials announced that they would again seek to remove two middleman companies -Overgas Inc and Wintershall Erdgas Handelshaus Zug AG (WIEE)- from the gas supply chain between Russia and Bulgaria They intended only to deal with Gazprom Export a fully owned subsidiary of Gazprom headed by its CEO Alexander Medvedev (Moscow Times February 4) Bulgaria tried to end the role of the two middlemen on two previous occasions but Alexander Medvedev countered by saying that the companies were only suppliers (wwwsofiaechocom February 4)

Medvedevs argument was at best disingenuous Overgas does not own any gas fields and relies on Medvedevs company Gazprom Export for its supply of gas Despite the best efforts of the Bulgarian government Overgas was not liquidated and is still functioning Apparently the government in Sofia is no match for Medvedev and Gazprom and now according to Vedomosti Overgas is being manipulated into acting as Gazproms proxy within Hungary A role similar to that played by Austrias OMV in its recent takeover of Hungarys energy giant MOL

According to the Overgas Annual Report for 2007 the last year available Gazprom owns 049 percent of the company Gazprom Export 4951 percent and the London-based Overgas Holdings Ltd 50 percent The chairman of the board of Overgas Inc is Alexander Medvedev who as noted above is also the head of Gazprom Export the company which technically sells Gazproms gas to Overgas Bulgarian law does not regard this as a conflict of interest

The Executive Director of Overgas Inc Sasho Dontchev is a graduate of Moscows Oil and Gas Institute and according to media reports was largely responsible for making Overgas a leading Bulgarian domestic gas distributor (EDM February 13)

The saga of Overgas and its affiliated directors led to an alleged Russian intelligence agent being arrested in Canada in November 2006 whose hired representatives were also employed by the Overgas holding company in London known as Energy Consultants Ltd (EDM February 13)

There might be serious implications for the EU if the Bulgarian Overgas is permitted to buy Swiss RosGas and thereby secure control over 20 percent of the Hungarian domestic gas distribution market acting as a proxy for Gazprom Hungary and Bulgaria are rapidly becoming the weakest links in the EU gas diversification strategy and appear to be submitting to Russian pressure -and possibly organized crime links sanctioned by the Kremlin- in order to strengthen Gazproms influence within Hungary and by default in Europe

The EU commission has not yet commented on these developments but the time is ripe

for both the Europeans and the US authorities to have their say on one of the most dangerous of the Kremlins long list of criminal enterprises

Who is really behind RosGashttpwwwneuropeeuarticles94168php

Author Kostis Geropoulos11 May 2009 - Issue 833Hungaryrsquos largest gas distribution company EMFESZ has been ldquofraudulentlyrdquo sold to the mysterious Swiss-based firm RosGas AG without the consent of its owner Ukrainian gas billionaire Dmitry Firtash Robert Shetler-Jones chief executive of Group DF that holds Firtashrsquos business assets told New Europe telephonically on May 8 adding that DF would fight to get EMFESZ back ldquoWe at Group DF and Mr Firtash have sold nothing What has happened is that our Managing Director Mr (Istvan) Goczi has fraudulently transferred the shares in EMFESZ to RosGas without our approval and without our consentrdquo Shetler-Jones claimedHe said that the sale raises new concerns about Europersquos gas security since the future EMFESZ Hungaryrsquos largest independent supplier of gas remains uncertain ldquoWe do not know who is behind RosGas and therefore we donrsquot know who is looking to supply EMFESZ with gasrdquo Shetler-Jones said adding that he doesnrsquot understand how RosGas can secure supplies of gas to provide to EMFESZLittle is known about RosGas the Swiss company which was recently created in Zug Shetler-Jones claimed that RosGas has a few directors one of whom is an officer who is directly responsible to Goczi the managing director of EMFESZ ldquoWe do not know who owns RosGas we do not know on what basis they have persuaded Mr Goczi to carry out this fraudulent operationrdquo he said

Shetler-Jones stressed that there has not been a decision of the board of directors to sell EMFESZ to RosGas ldquoMr Goczi what he seems to be saying is that he is using a power of attorney for this so-called lsquosalersquo The power of attorney he is supposedly using is one dating from 2004 that was issued to him to initially buy the shares in EMFESZ on behalf of Mr Firtash He somehow managed to persuade the Hungarian authorities that this power of attorney gives him the authority also to sell the shares onto a third partyrdquo Shetler-Jones claimed ldquoHowever this does not in our view give him the right it is certainly not done with our approval and therefore we will be pursuing all legal means in our path to get this asset back to our controlrdquo he told New Europe adding that Group DF will ldquomost certainlyrdquo seek criminal charges against Goczi and his associates

The dispute over the ownership of EMFESZ comes weeks after Firtash was muscled out of the Ukrainian gas trade under the terms of a new Russian-Ukrainian contract agreed by his nemesis Ukrainian Prime Minister Yulia Tymoshenko and Russian counterpart Vladimir Putin after the January gas supply crisis Under the new contract Russian gas monopoly Gazprom will supply Ukraine directly cutting out the middleman ndash RosUkrEnergo Firtash owns 45 percent of Swiss-registered RosUkrEnergo where he is a partner with Gazprom which holds another 50 percent of the trader

EMFESZ announced two weeks it was switching its gas purchases from Rosukrenergo to RosGas Asked about the switch Shetler-Jones said ldquoAs far as Irsquom aware RosGas is not supplying gas to EMFESZ One of the issues that concerned us was the very statement that EMFESZ made about securing supplies of gas from RosGas Group DF was not aware of those negotiations and of course we do not know what Rosgas is so Irsquom assuming that is all part of the process that we now seeing unwinding the transfer of shares the sourcing of different supplies of gas and who is behind it is fundamental to understanding what has happenedrdquoIn a statement EMFESZ said that RosGas is part of Gazpromrsquos network of business interests This claim was dismissed by Gazprom Press Secretary Sergei Kupriyanov ldquoRosGas has nothing to do with Gazprom and does not belong to the Gazprom grouprdquo Kupriyanov said Shetler-Jones told New Europe that there is no evidence that there is any connection between RosGas and Gazprom ldquoIf it is Gazprom and again we have no proof if it is Gazprom of course this would be extremely important commercially but also politically but I do reiterate that we have no evidence to that effect at the momentrdquo

Analysis Explosion in Moscow bad PR for GazpromhttpwwwupicomEnergy_Resources20090511Analysis-Explosion-in-Moscow-bad-PR-for-GazpromUPI-294212420869782

By JOHN CK DALY UPI International CorrespondentPublished May 11 2009 at 809 PM

WASHINGTON May 11 (UPI) -- While it is difficult to work up much sympathy at the best of times for energy companies public relations flacks those representing Russias state company Gazprom have had a bad few weeks Recent explosions on pipelines to Moldova and Turkmenistan generated strained relations with the two nations but the incidents were dwarfed by a massive explosion on a natural gas line in southwest Moscow early Sunday morning What all three incidents have in common is revealing an issue that Gazprom would much rather keep quiet -- the increasingly decrepit state of its pipeline infrastructure most of it dating from the Soviet era

At 20 minutes past midnight on Sunday morning residents on Ozernaya Street close to the Moscow Circular Road in the southwest of the city were rocked from their beds when a gas main ruptured Eyewitnesses heard a sound like a jetliner taking off within seconds the escaping gas ignited sending a column of flame more than 650 feet into the air For comparison purposes the Washington Monument is 555 feet high After saying he initially thought a plane had crashed one observer posting his comments on Facebook remarked from the scene Where I am is light as day and as warm as Africa

Moscow authorities dispatched 50 firefighting brigades to combat the inferno The first respondents who arrived at the scene early Sunday couldnt get within 1000 feet of the ruptured pipeline because of the intense heat generated by the blaze

The conflagration melted asphalt consumed around 70 cars that were parked nearby and partly destroyed the nearby All-Russian Scientific Research Institute for Optical and

Physical Measurements Moscows Municipal Telecommunication Firm reported that 80000 customers lost their phone connection after underground telephone cables were damaged by the heat The only fortunate news was that Mayor Yury Luzhkov reported that only five people were hospitalized with burns none with serious injuries Speaking about the casualties Deputy Emergency Situations Minister Alexander Chupriyan said All of them are drivers who happened to pass by the pipeline at the moment the fire broke out

The mayor was also at pains to dismiss the possibility of terrorism telling reporters We have to wait for the official investigation but I am 99 percent sure this catastrophe was caused by a technical problem

Those with slightly longer memories might note that May 9 celebrated in Russia as Victory Day over Nazi Germany in the Great Patriotic War known as World War II to the rest of the world has a darker remembrance Five years ago to the day Chechen militants assassinated Akhmad Abdulkhamidovich Kadyrov Moscows appointed president of Chechnya during a Victory Day celebration in the ruined Chechen capital Grozny

Perhaps it is memories of that coincidental darker anniversary five years ago that led to Itar-Tass quoting Anatoly Bagmet the Moscow department head of the Prosecutor Generals Office Investigation Committee as saying The gas pipeline fire is being investigated A criminal case may be opened on the investigation results while RIA Novosti reported that Russian Interior Ministry bomb experts and colleagues from the Federal Security Service successor to the KGB have begun inquiries into the cause of what Deputy Mayor Pyotr Biryukov labeled the largest fire in Moscow since the war

Luzhkovs assessment of the cause of the conflagration will probably be borne out by the forensic examination While Chechen terrorist attacks in Moscow were a hallmark of their struggle against Russian dominance the reality is that in the last several years Putins harsh methods have largely pacified the restive Caucasian province as evidenced by the fact that Akhmad Kadyrovs son Ramzan is now president there But if Muscovites can sleep a bit more soundly because of the capitals security measures then the countrys natural gas industrys dolorous safety record remains cause for concern a problem that stretches back decades

Twenty years ago a leaking natural gas pipeline caused the most deadly railway accident in Soviet history On June 4 1989 two Trans-Siberian Railway passenger trains passing each other near the cities of Ufa and Asha apparently threw off sparks that ignited vapor leaking from a natural gas pipeline producing an explosion estimated to be equivalent to 10 kilotons of TNT two-thirds as powerful as the Hiroshima explosion The inferno killed 575 and wounded more than 600 but tragically three hours before the tragedy engineers noticed a drop in the pressure in the gas line Instead of checking for leaks they ramped up the pressure back to normal

Shortly after the incident General Secretary Mikhail Gorbachev visited the scene of the tragedy and subsequently told the Congress of Peoples Deputies It seems once again that it is a matter of incompetence irresponsibility mismanagement

Gazprom the worlds largest oil and gas company controls 93205 miles of pipelines Last October during an interview with the NTV television broadcaster Gazprom Chief Executive Officer Alexei Miller predicted that his company would generate more than $35 billion in net profit by the years end If Miller doesnt want to end up alongside former Yukos chief Mikhail Khodorkovsky in YaG-1410 penal colony near the town of Krasnokamensk in Chita province in eastern Siberia 3000 miles east of Moscow on charges of incompetence irresponsibility mismanagement then he might consider dipping into his $35 billion rainy day fund to maintain those 93205 miles of pipelines as explosions in Moscow are at the very least negative PR

Moscow authorities have said the 54th Eurovision Song Contest which is scheduled for May 16 in Moscow not far from the scene of the fire and will draw an estimated audience of 100 million viewers will not be affected If Miller doesnt want to wind up alongside Khodorkovsky sewing protective clothing for the prison system and the police then he has his work cut out for him

Russia 090512





Gazprom

------------------------------------------------------------------------------------------ Full Text Articles


Russia Japan looking to resolve disputes through economic ties

Japan and Russia to co-develop oilfields

Wire services


Russia Japan seek to bolster economic ties

Obama to make official visit to Russia in early July

Russia stops being leading trade partner in Transcaucasia Central Asia ndash IMF

The time for the Palestinian state has come

Russia calls for international efforts to achieve peace in the Middle East

Lavrov ldquoAll parties should resume talks towards peace processrdquo


Talks with Hamas


Russian shipbuilders look for tide to come in

Putin tells firms to buy Russian shipsthey object

Police officer killed in shootout in Russias Daghestan

Russia to play key part in nuclear comeback

Russias Glonass system to get full state support - deputy PM

New Russian fighter jet due by year-end

Russia Stockpiles the Gems Awaiting the Return of Demand

UK rights activists defends banned Moscow Gay Pride parade


Russia daily cbank swap limit at 5 bln rbls


Mechels Kuzbass power sales co could pass on 2008 dividends

Severstal to unveil Q1 IFRS results May 15

Deripaska may sell construction business-paper

Russian truck maker KamAZ resumes work after three-week halt

Iridium seeks Russian satellite services market


New Arctic bulk carrier for Murmansk Shipping Company


Gazprom

RosGas AG to Control 20 Percent of Hungarian Gas Distribution

Analysis Explosion in Moscow bad PR for Gazprom

of the country And the authorities are hoping to double that to cut down its dependence on oil and gas to generate electricity

Russias Glonass system to get full state support - deputy PM New Russian fighter jet due by year-end Russian Deputy Prime Minister Sergei

Ivanov told reporters after a shipbuilding meeting in the Far Eastern city of Komsomolsk-on-Amur that full-scale production of the advanced multi-role fighter will start in 2010 RIA Novosti reported

Military Commissions Arms The army added 17 ICBMs four short-range Iskander missile complexes and 34 rockets for the S-400 air-defense systems Deputy Prime Minister Sergei Ivanov told Prime Minister Vladimir Putin on May 6 according to a transcript posted on the Cabinet web site

NYT Russia Stockpiles the Gems Awaiting the Return of Demand UK rights activists defends banned Moscow Gay Pride parade

National Economic Trends Russia daily cbank swap limit at 5 bln rbls Russia Pension Funds Gain Most in Four Years Kommersant Says New official forecast 6 GDP decline in 2009 EBRD cuts Russias 2009 growth forecast from 1 to -75

Business Energy or Environmental regulations or discussions VEB Toughens Standards - Vneshekonombank which dispenses Russias

economic stimulus funds will grant subordinated loans only to banks that have 35 billion rubles ($108 million) of capital limiting access to fewer than 100 lenders

VEB to lend $250mln to airlines for 13 years for acquisition of Superjets ndash Ivanov VEB approves subordinated loans to Russian Standard and Promsvyazbank Russian credit growth decelerating rapidly - While the CBR has stepped in

aggressively with the liquidity support in 4Q09 it has been short-term and is being gradually reduced in 1Q09

Electricity consumption decreased 81y-o-y during the first week of May Mechels Kuzbass power sales co could pass on 2008 dividends Severstal to unveil Q1 IFRS results May 15 Russian steelmakers gain market share Deripaska may sell construction business-paper IUD suspends construction of steel rolling plant in Armavir Railway Cargo Turnover Continuous Recovery - Russian Railways has released

highlights of its April transportation statistics As railways account for 85 of cargo transportation in Russia the dynamics are a good proxy for changes in industrial output

Russian truck maker KamAZ resumes work after three-week halt GAZ autoworks restarts conveyor Tue after May holidays Iridium seeks Russian satellite services market - Bethesda-based Iridium Satellite

announced Monday that is has begun the process of entering the Russian market for mobile satellite services forming a company called Iridium Communications Russia OOO to pursue a license for providing such services in Russia








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Talks with Hamas










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051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















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cash in


































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MAY 12 2009 419 AM ET










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RUSSIA-JAPAN



































7 hours ago


























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28 minutes ago








12 May 2009 1055











Today 1046 PM











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Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom

























7 hours ago


























Wire services








































Today 1041 PM





















28 minutes ago








12 May 2009 1055











Today 1046 PM











12 May 2009 0012










Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom




























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Today 1041 PM





















28 minutes ago








12 May 2009 1055











Today 1046 PM











12 May 2009 0012










Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom










































Today 1041 PM





















28 minutes ago








12 May 2009 1055











Today 1046 PM











12 May 2009 0012










Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom























28 minutes ago








12 May 2009 1055











Today 1046 PM











12 May 2009 0012










Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom





12 May 2009 1055











Today 1046 PM











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Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom








Today 1046 PM











12 May 2009 0012










Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom







12 May 2009 0012










Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom





Talks with Hamas










2009-05-12 044912















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom
















12 May 2009 0727













051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom





051109 1023 AM EDT

By Oleg Shchedrov






























12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom






















12 May 2009 0724







































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom


































































Today 1036 PM










051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom





051209 0345 AM EDT




By William Mauldin































Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom
























Maxim Raskosnov




















Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom













Boris Krasnojenov









Tuesday 12 May 2009







































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom









































bne May 12 2009




















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom















cash in


































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom































Victor Mishnyakov

Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom







MAY 12 2009 419 AM ET










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom










company Overgas





























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom
























Russia 090512





Gazprom





Wire services









Talks with Hamas





















Gazprom



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