Russia 111006

Basic Political Developments Russia threatens stop to missile defense cooperation - In a statement, the Foreign

Ministry in Moscow condemned Washington for making far-reaching decisions “without collective discussion” and ignoring the opinions of all interested parties. “If this continues, then the chance created at the NATO-Russia summit in Lisbon to turn anti-missile defense from an area of confrontation to an area of cooperation may be lost,” the statement read.

o Russia irked by U.S. 'faiit accompli' approach to deploying missile shield sites in Europe

Russia, China should explain their veto to Syrians - Clinton Shaaban: UN Witnessed Historical Day with Moscow and Beijing Veto  Russia sets store by boosting Iran ties - Russian Foreign Ministry spokesman,

Alexander Lukashevich, says bolstering bilateral relations with Iran is part of the Kremlin's diplomatic strategy.

Medevedev says Jobs changed the world - "People like Steve Jobs change our world," Medvedev wrote in his Twitter micro blog. "I am sending my sincere condolences to his relatives and everyone who appreciated his smartness and talent."

Medvedev welcomes Abkhazia leader in Moscowo Russian, Abkhaz leaders to discuss joint border protection, economic

recovery - Kremlin source: "In this context, during [Ankvab's] visit, the sides plan to discuss issues surrounding the practical implementation of agreements regulating joint efforts to guard the state border of the Republic of Abkhazia, as well as Russia's unified military base on the territory of the republic," the source said.

o Abkhazia’s security, Russians’ property rights to dominate talks in Moscow - On his visit to Moscow, the Abkhazian president will be accompanied by Deputy Presidential Chief of Staff Vyacheslav Chirikba, acting Vice Prime Minister and Finance Minister Beslan Kubrava, State Security Service chief Aslan Bzhania, acting Health Minister Zurab Marshan, acting Head of the Committee on Ecology and Use of Natural Resources Roman Dbar, acting Head of the State Archival Department Roman Gvindzhia, and Head of the Department of Information and Mass Media Kristian Bzhania.

NATO interference in Libya caused more victims – Lavrov: "Members of the international community, first of all our Western partners, have chosen the path of supporting one of the sides in the civil war – probably the party that represented the Libyan people's legitimate aspirations, but this still increased the number of casualties among the civilian population," Lavrov said, cites Interfax. Russia’s top diplomat was speaking at a media conference in Moscow after talks with his Djiboutian counterpart.

Russia, Djibouti to discuss African settlement, situation at Horn of Africa - Russian Foreign Minister Sergei Lavrov and his Djiboutian counterpart Mohamed

Ali Yusuf will meet in Moscow for talks on Thursday, October 6, to discuss African settlement and the humanitarian situation near the Horn of Africa.

RF, Netherlands economies can perfectly complement each other-PM: The economies of Russia and the Netherlands can "perfectly complement each other," Mark Rutte, Prime Minister of the Netherlands, has told Itar-Tass in an exclusive interview ahead of his official visit to Moscow, scheduled for October 19-21.

Russian vice prime minister arrives in Venezuela on visit - Sechin is also scheduled to attend the opening ceremony at a branch of the Russian-Venezuelan bank, the main office of which is in Moscow. ..In addition, Sechin will take a trip to the Orinoco oil region where the National Petroleum Consortium created in 2008 is developing the Junin 6 oil deposit. The consortium involves Russia’s LUKOIL, Rosneft, Surguteneftegas, TNK-BP, and Gazprom Neft.

Cypriot govt endorses terms of loan agreement with Russia Russia looks to side step dollar in Turkish trade - As emerging market currencies

continue to fight sharp slides, Russia extended its long-term bid to shun the dollar in late September, discussing with Turkey ways of boosting the use of domestic currencies in bilateral trade relations, reports Bloomberg.

CSTO interstate commission to discuss military-economic cooperation - The interstate commission of the Collective Security Treaty Organisation (CSTO) will meet in Bishkek for its ninth session to discuss economic and military cooperation in the years to come.

Accused global arms dealer goes on trial Tuesday - The trial October 11 in Manhattan federal court of the man US officials have dubbed "the merchant of death" brings to a head an extraordinary saga of furtive flights by ex-Soviet cargo planes, vicious African wars, and finally a sting operation by US agents in 2008 to capture Bout in a Bangkok hotel.

Zenit-2SB rocket with U.S. satellite blasts off from Baikonuro Zenit carrier rocket with US satellite blasts off from Baikonur

An amazingly direct proposal - India has been offered the use of GLONASS for its intended purpose – missile guidance Ivan Safronov, Jr.

Severodvinsk nuclear sub completes sea trials - The Russian Navy will receive its first Severodvinsk nuclear submarine in late 2011. Sevmash is planning to build a total of six submarines of this class.

Russia grants €10 million to Arctic environment Moldova: No plans to join Customs Union Russian activist's case in Moldova deliberately stalled - ambassador Old missiles not so old after all - The arms scandal involving an airplane from

Libya ended as loudly as it began Svetlana Gamova GERB Presidential Runner Assures Bulgaria Will Stay Friends with Russia -

Rosen Plevneliev, presidential candidate of ruling center-right party GERB, has vowed not to obstruct the activity of Russian companies.

Russia values infrastructures projects in Serbia - Taking part in the 11th Economic Summit in Belgrade, Konuzin said the South Stream project should give a new impetus to the entire Serbian economy. He expressed expectation the pipeline will allow a series of chemical companies to crop up in Serbia, strengthening its export potential.

Macedonian-Russian commission reviews possibilities for bolstering economic cooperation - The trade exchange between the two countries in the first half of this year year reached US$ 374,3 million, being higher for 39 percent in comparison to 2010.

Bosnia’s Republika Srpska attracts new Russian investors - Chief Representative of the Bosnia’s Republika Srpska in  Moscow Dusko Perovic said that the RS is on the great way to attract new Russian investments in the energy sector, adding that a Russian businessman Rashid Serdarov already started preparations for the construction of a new unit of thermal "Ugljevik three", valued at more than 550 million euros.

Kazakhstan welcomes Putin's Eurasian Union concept - Governments in the West may have read with alarm that Russian Prime Minister Vladimir Putin wanted to build a Eurasian Union out of the former Soviet bloc but in Kazakhstan the news was welcomed.

Press tour of Russian regional mass-media representatives to Belarus continues. Putin to attend “Russia’s Calling” investment forum in Moscow - More than

1,000 participants will take part in the forum. They will be addressed by Minister of Economic Development Elvira Nabiullina and Central Bank Deputy Chairman Alexei Ulyukayev who are scheduled to attend the plenary session. Also attending will be Russian businessmen, economists, heads of large foreign investment companies, international financial institutions and banks, representatives of the Western economic school.

United Russia may nominate Putin as presidential candidate before Duma pollo United Russia may convene earlier than scheduled - paper

Putin has ‘it’ - Larry King: “I had an affinity with him”, King told RT. “You try to get that with a lot of guests, but I really had it with him…he has qualities that have nothing to do with politics…they change a room.”

Russian police seize dozens of bombs from alleged drug dealer Second Russian businessman killed - A second businessman has been shot to

death in less than two weeks in St. Petersburg, Russia's cultural capital, where contract killings proliferated after the Soviet collapse, officials said Wednesday.

Vice-principal of Irkutsk technical university found dead Kadyrov hopes Chechnya to develop as before after RF presidential elections.

o New face of Chechen capital - But locals are putting their hope in investment. They believe if Chechnya attracts more money from outside and the quality of life continues to improve, eradicating terrorism will no longer seem like “mission impossible”.

Dagestan to receive grants for the energy efficiency program implementation Russian Orthodox Church to get 13 new dioceses - The new dioceses will appear

in Kazakhstan and also in the Irkutsk, Orenburg, Ryazan and Saratov regions, in Khabarovsk Territory and the Republic of Tyva, the Russian Orthodox Church said on its website.

PRESS DIGEST - Russia - Oct 6o www.vedomosti.ru

o Russian railways will receive an extra 20 billion roubles ($614,1 million) from the state budget in order to build railroads and other facilities for the 2014 Winter Olympics in Sochi, the paper says.

o Russia's Energy Ministry warns oil companies it will regulate gasoline prices if they rise more than 10 percent in one month, the paper writes.

o www.kommersant.ru o U.S. PepsiCo Inc may buy Russia's biggest kvass beverage producer Deka

for $160 million, the paper writes citing sources. o The paper runs an interview with Andrei Kuzyayev, head of Lukoil

Overseas , who says 11 percent of all company's production comes from international projects.

Russian Press at a Glance, Thursday, October 6, 2011 Managing Choices - Although It's Too Early to Tell Who Will Lead South Ossetia

into the Future, the Republic Is Bound to End Up with a Pro-Russian President

National Economic Trends Russia cbank says rouble band upper boundary at 37.60 TABLE-Russian gold/fx reserves fall to $516.8 bln Ruble, stocks rise as world oil prices grow Russia's fed budget for 2011 to be balanced, economic dynamics fair Russia's federal budget for 2011 to be deficit-free - Putin Russia Sold $8 Billion, Most Since Ruble’s 2009 Devaluation

Business, Energy or Environmental regulations or discussions Tatneft, Rosneft, Gazprom: Russia Equity Market Preview VTB to take $3.4 billion Bank of Moscow share issue VTB Bank to sell Kiev bank as part of ‘superfluous asset’ sales VEB May Become Gazprombank Shareholder, Vedomosti Says AFK Sistema May Change Its Dividend Policy, Vedomosti Reports UPDATE 1-Evraz halts Raspadskaya stake sale talks Polyus updates on Nezhdaninskoye, Bamskoye and smaller deposits NLMK obtains exposure to India's transformer steel market

Activity in the Oil and Gas sector (including regulatory) Transneft to bear entire capex of Zapolyarie-Purpe pipeline; NEUTRAL Lukoil May Invest $300 Mln in Romanian Project: Ziarul Financiar LUKOIL intends to increase its share of international businesses - to 20% of total

EBITDA LUKOIL cuts down oil production forecast to 92 million tonnes UPDATE 1-Exillon finds more oil in Siberia Russia's Tatneft H1 earnings more than double Tatneft' imeni V.D. Shashina OAO : Figures Demonstrating Results of Our

Operations in September and for Nine Months of 2011

Gazprom Gazprom to list additional ADSs on LSE

o Gazprom not proceeding with ECP placement – organizer Gazprombank to be controlled by the state again Gazprombank consolidates 100% of Vasilyevsky Mine

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Full Text Articles

Basic Political Developments

Russia threatens stop to missile defense cooperationhttp://en.rian.ru/world/20111006/167430546.html

10:25 06/10/2011

MOSCOW, October 6 (RIA Novosti)Russia warned on Thursday it may stop cooperation with the United States on a missile shield in Europe.In a statement, the Foreign Ministry in Moscow condemned Washington for making far-reaching decisions “without collective discussion” and ignoring the opinions of all interested parties.“If this continues, then the chance created at the NATO-Russia summit in Lisbon to turn anti-missile defense from an area of confrontation to an area of cooperation may be lost,” the statement read.Russia made the statement after the United States and Spain agreed on Wednesday to deploy a number of U.S. Navy cruisers in Spain as part of the nascent missile defense scheme.

October 06, 2011 10:30

Russia irked by U.S. 'faiit accompli' approach to deploying missile shield sites in Europehttp://www.interfax.com/newsinf.asp?id=278222

MOSCOW. Oct 6 (Interfax) - The Russian Foreign Ministry has expressed its concern about an agreement between the U.S. and Spain on deploying four ships carrying SM-3 interceptor missiles and the Aegis Ballistic Missile Defense System on Spanish territory.

"The U.S.' new step toward implementing the so-called phased adaptive approach toward building a missile defense system in Europe cannot but alarm us, because the U.S. missile defense potential in the European area is being significantly bolstered already at the first phase of its implementation," the Russian Foreign Ministry said in a commentary published on its website on Thursday.

"We consider unacceptable the U.S. 'fait accompli' approach toward the deployment of a missile defense system in Europe, with decisions capable of affecting security and stability in the Euro-Atlantic area made without collective discussion and without the opinion of all countries concerned taken into account," it said.

va

(Our editorial staff can be reached at eng.editors@interfax.ru)

Russia, China should explain their veto to Syrians - Clintonhttp://en.rian.ru/world/20111006/167427841.html

07:58 06/10/2011

MOSCOW, October 6 (RIA Novosti)

Russia and China should explain the Syrian people why they vetoed a Security Council resolution, U.S. Secretary of State Hillary Clinton said.

Despite three months of debates, the 15-nation UN Security Council failed to reach a compromise on the draft resolution on Syria. Russia, which sells arms to Syria, and China applied their veto-wielding power to block the Western blueprint late on Tuesday.

"We believe the Security Council abrogated its responsibility yesterday," Clinton said. "The countries that chose to veto the resolution will have to offer their own explanations to the Syrian people, and to all others who are fighting for freedom and human rights around the world."

"Those countries that continue to send weapons to the Assad regime that are turned against innocent men, women and even children, should look hard at what they are doing," Clinton told reporters.

The U.S. Secretary of State said those who vetoed the resolution were "standing on the wrong side of history."

The U.S. envoy to the UN Security Council on Wednesday expressed outrage at Russia and China for blocking a draft resolution, saying it was a "slap in the face" of the people of Syria.

A State Department spokeswoman Victoria Nuland said later in the day the results of the Security Council's vote were "extremely disappointing," as the resolution was weakened significantly during the negotiations.

"The text that we supported yesterday was far weaker than we would have liked. It didn't include the teeth of sanctions, and even that proved to be too much," the spokeswoman added.

The Russian foreign ministry issued a statement saying that the draft resolution failed to rule out any military intervention, and the country may face an international military operation, similar to Libya.

The Syrian government has used force to crush opposition protests, which followed a wave of uprisings in other Arab countries in spring. The UN says some 2,700 people have died since the start of the protests in March.

The United States, Canada and the EU have already imposed unilateral sanctions on Syria and have called for Assad to step down.

Shaaban: UN Witnessed Historical Day with Moscow and Beijing Veto 

http://www.sana.sy/eng/337/2011/10/06/373746.htm

Oct 06, 2011

DAMASCUS, (SANA)-Presidential Political and Media Advisor Bouthaina Shaaban said that the UN witnessed a historical day after Russia and China vetoed an EU draft resolution against Syria at the UN Security Council.

" Moscow and Beijing have stood by the peoples and against injustice … the Syrians are satisfied to see other powers in the world that stand against hegemony and military intervention in the affairs of countries," AFP quoted Shaaban as saying in a statement.

She considered that by using veto, Moscow and Beijing put themselves by the side of the Syrian people, giving Syria the time to realize reforms in order to reach political multiplicity.

Shaaban expected that future will be in favor of Russia, China and the East, saying "it is enough for the western hegemony, colonialism and injustice.

Mazen

Russia sets store by boosting Iran tieshttp://www.presstv.ir/detail/202997.html

Thu Oct 6, 2011 1:12AM GMT

Russian Foreign Ministry spokesman, Alexander Lukashevich, says bolstering bilateral relations with Iran is part of the Kremlin's diplomatic strategy.

“Maximum expansion of ties with the Islamic Republic [of Iran] is one of Russia's strategies,” IRIB quoted the official as saying on Wednesday during his weekly news conference in Moscow.

He said Iran was a neighbor and friend of Russia and the two countries shared a long history of relations.

Lukashevich highlighted Moscow's determination to expend its relations with Tehran and mentioned Russia's assisting the launch of Iran's Bushehr nuclear power plant in the south of the country.

The September inauguration of the Bushehr nuclear power plant and bilateral collaboration in various fields were examples of the Russo-Iranian cooperation, he stated and conveyed Moscow's satisfaction with the launch.

Iran signed a deal with Russia in 1995, under which the going on stream of the plant was originally scheduled for 1999, but the project was repeatedly delayed.

The plant officially joined Iran's national electricity grid in mid-September, with an initial power generation capacity of 40 percent.

MRS/HN

Medevedev says Jobs changed the worldhttp://en.rian.ru/world/20111006/167432220.html

11:32 06/10/2011

Russian President Dmitry Medvedev offered his condolences to relatives and fans of Silicon valley guru Steve Jobs, who died of pancreatic cancer on Wednesday at the age of 56.

"People like Steve Jobs change our world," Medvedev wrote in his Twitter micro blog. "I am sending my sincere condolences to his relatives and everyone who appreciated his smartness and talent."

Jobs died one day after Apple presented a new iPhone.

Jobs stepped down as chief executive of Apple in August and the firm now faces challenges in the absence of a man who was essentially its chief product designer, marketing guru and a salesman.

Medvedev welcomes Abkhazia leader in Moscowhttp://english.ruvr.ru/2011/10/06/58244968.html

Oct 6, 2011 09:19 Moscow Time

The presidents of Russia and Abkhazia, Dmitry Medvedev and Alexander Ankvab, are meeting in Moscow today to discuss security issues and property rights of Abkhazian people.

The 58-year-old Ankvab is making his first visit to Russia as president following his inauguration in Abkhazia`s capital Sukhum at the end of last month.

Russia recognized Abkhazia as independent state after a war conflict with Georgia in August of 2008.  (TASS)

October 06, 2011 09:44

Russian, Abkhaz leaders to discuss joint border protection, economic recovery - Kremlin sourcehttp://www.interfax.com/newsinf.asp?id=278208

MOSCOW. Oct 6 (Interfax) - The presidents of Russia and Abkhazia, Dmitry Medvedev and Alexander Ankvab, will discuss the implementation of an agreement aimed at jointly guarding Abkhazia's state border and providing security assistance for the republic at a meeting in Moscow on Thursday.

"The heads of state are expected to discuss specific aspects of interstate cooperation, assistance for Abkhazia in security and socioeconomic recovery, as well as coordination in the international arena. They will also outline ways to further promote bilateral relations," a Kremlin source told Interfax.

Reliable security solutions for Abkhazia will top the agenda for the upcoming talks, he said.

"In this context, during [Ankvab's] visit, the sides plan to discuss issues surrounding the practical implementation of agreements regulating joint efforts to guard the state border of the Republic of Abkhazia, as well as Russia's unified military base on the territory of the republic," the source said.

Several bilateral agreements are expected to be signed during Ankvab's visit to Moscow, including an agreement between the Russian and Abkhaz governments on cooperation in the protection and rational use of cross-border water resources, he said.

More than 60 agreements signed at different levels regulate Russian-Abkhaz relations today, and 30 more documents are currently being drafted, he said.

tm

(Our editorial staff can be reached at eng.editors@interfax.ru)

06:05 06/10/2011ALL NEWS

Abkhazia’s security, Russians’ property rights to dominate talks in Moscow

http://www.itar-tass.com/en/c154/240857.html

MOSCOW, October 6 (Itar-Tass) —— Abkhazia’s security and Russian citizens’ property rights in that country will dominate the agenda of the talks between President Dmitry Medvedev and Abkhazian leader Alexander Ankvab in Moscow on Thursday, October 6.

This is the first visit by Abkhazia’s third president to Russia after his election. Ankvab, 58, is making his first foreign trip 10 days after his inauguration in Sukhum where Federation Council Chairman Valentina Matviyenko invited him to visit Moscow.

“In the course of the visit, Medvedev and Ankvab are scheduled to meet in a narrow format and with the delegations,” a source in the Kremlin told Itar-Tass. “The heads of states will consider the concrete aspects of Russian-Abkhazian interaction, assistance to Abkhazia in the field of security, socio-economic rebuilding, coordination in the international arena. They will map out the ways of further development of bilateral regions.”

In his congratulatory message to Ankvab, Medvedev stressed that Abkhazia can count on Moscow’s help in the future. “Russia intends to continue to provide all-round support and aid to the friendly Abkhazian people in the field of state development and in the implementation of socio-economic projects,” the president said.

“The crucial priority is to ensure reliable security for Abkahzia. In this context, the parties will discuss practical implementation of the agreements on joint efforts in protecting Abkhazia's state border and the unified Russian military base in the territory of the republic of Abkhazia,” the Kremlin said.

The parties are expected to discuss the restoration of Russian citizens' property rights in Abkhazia. The two countries have set up a special commission to ensure legitimate resolution of these issues.

The sides will exchange detailed views on foreign policy matters. “Russia welcomes the process of the strengthening of Abkhazia's international positions. Our countries cooperate closely and productively within the framework of the Geneva discussions on stability and security in Transcaucasia,” the source said.

“In the course of the visit, it is planned to sign a number of bilateral documents, such as an intergovernmental agreement on cooperation in the protection and rational use of cross-border water basins. As of today, the legislative basis of our relations comprises more than 60 agreements of various levels, and another 30 are in the works,” the Kremlin said.

It stressed, “bilateral cooperation in the socio-economic sphere has positive dynamics. In the period since the establishment of inter-state relations (September 2008), trade turnover has doubled to more than 225 million dollars. The complex plan for assistance to Abkhazia's socio-economic development in 2010-2012 is being implemented successfully. The plan includes large projects, such as the establishment of a transport and logistics centre to speed up cargo transportation, building facilities in the town of Sochi, developing a tourism-recreation zone in Abkhazia and rebuilding the facilities of the socio-culture sphere, public utilities, administrative buildings and other infrastructure facilities.”

“The new president of Abkhazia has confirmed his commitment to further strengthening of strategic and allied relations with Russia in full conformity with the Treaty of Friendship, Cooperation and Mutual Assistance and other inter-state documents,” the Russian official said.

On his visit to Moscow, the Abkhazian president will be accompanied by Deputy Presidential Chief of Staff Vyacheslav Chirikba, acting Vice Prime Minister and Finance Minister Beslan Kubrava, State Security Service chief Aslan Bzhania, acting Health Minister Zurab Marshan, acting Head of the Committee on Ecology and Use of Natural Resources Roman Dbar, acting Head of the State Archival Department Roman Gvindzhia, and Head of the Department of Information and Mass Media Kristian Bzhania.

NATO interference in Libya caused more victims – Lavrovhttp://rt.com/politics/lavrov-nato-libya-victims-201/

Published: 6 October, 2011, 12:32Edited: 6 October, 2011, 12:34

NATO’s interference in the conflict between the Muammar Gaddafi regime supporters and the Libyan opposition has increased the number of casualties among civilians, Russia’s Foreign Minister Sergey Lavrov has said.

"Members of the international community, first of all our Western partners, have chosen the path of supporting one of the sides in the civil war – probably the party that represented the Libyan people's legitimate aspirations, but this still increased the number of casualties among the civilian population," Lavrov said, cites Interfax. Russia’s top diplomat was speaking at a media conference in Moscow after talks with his Djiboutian counterpart.

Lavrov pointed out that the UN resolutions on Libya called for measures that would protect civilians in the conflict-torn North African state, “but the result was slightly different, to say the least,” he added.

The minister stressed that Moscow does not accept “invocations” heard from the alliance’s headquarters in Brussels that NATO’s intervention saved “a countless number of lives.”

“This is wishful thinking,” Lavrov said.

06:36 06/10/2011ALL NEWS

Russia, Djibouti to discuss African settlement, situation at Horn of Africa

http://www.itar-tass.com/en/c154/240858.html

MOSCOW, October 6 (Itar-Tass) —— Russian Foreign Minister Sergei Lavrov and his Djiboutian counterpart Mohamed Ali Yusuf will meet in Moscow for talks on Thursday, October 6, to discuss African settlement and the humanitarian situation near the Horn of Africa.

This is the first visit of a high-ranking diplomat in the history of Russian-Djibouti relations; it should become an important new step forward in the development of our ties with the country.

The visit program envisages talks between the foreign ministers of both countries, as well as the Djibouti minister’s meetings with senior officials of a number of Russian agencies and organisations. During the talks between Yusuf and Russian Minister of Foreign Affairs Sergey Lavrov they are expected to hold a thorough exchange of views on international and African issues, including on the resolution of the crisis situations in Africa and the humanitarian plight in the Horn of Africa, and to discuss topical issues relating to the development of Russian-Djibouti ties in various fields. A Protocol on Consultations between the Ministry of Foreign Affairs of the Russian Federation and the Ministry of Foreign Affairs and International Cooperation of the Republic of Djibouti is planned to be signed.

The leadership of the Republic of Djibouti is pursuing a line on the development of cooperation with Russia and shows interest in deepening the inter-state dialogue, and expanding cooperation in trade, economic, cultural and other fields.

Objective conditions exist for enhanced interaction between our two countries in the international arena. The Republic of Djibouti plays an important role in sub-regional affairs.

“We hope that the working visit of Mohamed Ali Yusuf will be useful in terms of strengthening collaboration with Djibouti on the international scene and will contribute to the development of bilateral cooperation in trade, economic and other fields,” the Foreign Ministry said.

10:02 06/10/2011ALL NEWS

RF, Netherlands economies can perfectly complement each other-PM

http://www.itar-tass.com/en/c154/241041.html

THE HAGUE, October 6 (Itar-Tass) — The economies of Russia and the Netherlands can "perfectly complement each other," Mark Rutte, Prime Minister of the Netherlands, has told Itar-Tass in an exclusive interview ahead of his official visit to Moscow, scheduled for October 19-21.

"Our economy is export-oriented. Russia is modernizing its economy, and developing the energy sector and infrastructure. We can perfectly complement each other," he emphasized.

When speaking of the 2011-2013 Joint Action Programme signed by Russia and the Netherlands on March 14, this year, Rutte stressed that the Programme "is of immense

importance to our contacts not only in the economic sphere and in trade matters but also in culture, sports, and science".

"I think that during the (forthcoming) talks in Moscow and St Petersburg, we shall touch upon the theme of health care, in particular. We have available such enterprises as Philips which manufactures modern medical facilities necessary to Russia. I think we can find very good areas of interaction in this respect. I believe that we shall succeed in strengthening our business partnership. There are also great prospects in such areas as infrastructure, environmental protection, the construction of dykes, the management of water conservancy, in the environs of St Petersburg, for example," he pointed out.

"We, unfortunately, lost to you in a bid to play host to the 2018 World Soccer Cup Finals (WSCF), but we'd like to participate in the development of the infrastructure that will be used during the holding of the WSCF. This is why I am taking with me to Russia our Transport Minister who will deal with this matter," he summarized.

The interview of Prime Minister Mark Rutte of the Netherlands will be broadcast in full on the Russia-24 television channel in the "Formula of Power" cycle and published in Rossiiskaya Gazeta.

03:02 06/10/2011ALL NEWS

Russian vice prime minister arrives in Venezuela on visit

http://www.itar-tass.com/en/c154/240851.html

CARACAS, October 6 (Itar-Tass) —— Russian Vice Prime Minister Igor Sechin has arrived in Venezuela on a two-day working visit.

He will have talks with the country’s top leadership and visit bilateral economic cooperation sites.

As co-chair of the Russian-Venezuelan High-Level Inter-Governmental Commission, Sechin will meet with Vice President Elias Jaua, who heads the Venezuelan part of the commission.

Sechin is also scheduled to attend the opening ceremony at a branch of the Russian-Venezuelan bank, the main office of which is in Moscow. The bank was created in June 2009 as a tool of financial support for joint projects.

In addition, Sechin will take a trip to the Orinoco oil region where the National Petroleum Consortium created in 2008 is developing the Junin 6 oil deposit. The consortium involves Russia’s LUKOIL, Rosneft, Surguteneftegas, TNK-BP, and Gazprom Neft.

The deposit in the Orinoco River Basin can produce 400,000-450,000 barrels of crude a day.

Oil from this field may be shipped, among others, to the United States. “Oil will go where buyers pay money for it. We do not rule out the U.S. market of course,” Sechin said earlier. “This is the closest market, and the transportation route would be the shortest.”

“If there are consumers, we will treat them with respect. It is important though that the economic effect matches investments,” he said.

Investments in the development of the Junin-6 oilfield in Venezuela will exceed 10 billion U.S. dollars, Energy Minister Sergei Shmatko said.

He said, however, that this was a tentative amount.

According to Shmatko, the oilfield should produce 450,000 barrels of oil a day. “We think we have made an agreement on very attractive and interesting terms,” he said.

According to the deal between Russia and Venezuela, the consortium will develop the Junin-6 block. It also hopes to bid in tenders for the development of four Carabobo blocks. The consortium's combined investments in the Junin-6 project may amount to about 30 billion U.S. dollars.

The long-term project for the development of the Junin-6 oilfield in an area of 447.7 square kilometres envisages the production of 450,000 barrels of heavy and extra heavy oil daily. It covers the creation of infrastructure and comprehensive development of the Orinoco oil belt area.

Preliminary estimates indicate that the Orinoco River basin contains 235 billion barrels of heavy and extra heavy oil. After the international certification of all blocks of this field is completed, Venezuela's proven and recoverable oil reserves will account for 314 billion barrels. The country may rank first in the world in this respect.

According to Sechin, Venezuelan partners will have to "defend the main economic terms [of the agreement] in the National Assembly of Venezuela: and we hope that some time after that the consortium will begin physical work in Venezuela".

He said, “Russia will try to make this happen as soon as possible as much as it can.”

The project will be implemented in two stages. “Stage One is 7-10 years, during which about 12 billion U.S. dollars will be invested. In Stage Two, investments will reach 20 billion U.S. dollars,” Sechin said, adding that the overall project term might be 40 years.

He does not rule out that “other investments may become necessary”.

“I am convinced that such investments will be made because we do not know all the macroeconomic parameters that may affect the project,” Sechin said.

He expects the project to start breaking even in Stage One. “The project is divided into several stages, and a great deal of investments will be returned in the first 7-10 years,” Sechin said.

01:02 06/10/2011ALL NEWS

Cypriot govt endorses terms of loan agreement with Russia

http://www.itar-tass.com/en/c154/240846.html

NICOSIA, October 6 (Itar-Tass) — Government of Cyprus on Wednesday endorsed the terms of a laon that Russia will issue to the Republic of Cyprus shortly, Stefanos Stefanou, the government's official spokesman said.

The cabinet of ministers instructed the Ministry of Finance to take all the steps towards effectuating the agreement on both sides as early as possible, he said.

Russia is issuing a loan of 2.5 billion euros maturing in four and a half years and paying an interest of 4.5% annual. Along with this, the Cypriot government will have an opportunity of an early repayment without any sanctions.

The implementation of this agreement will help the republic to cover short-term and medium-term financial needs and will be combined with the government's own measures to ensure financial stability, Stefanou said.

It will help Cyprus restore credibility among foreign investors, he said, adding that the authoriities voice gratitude to Russia for the decision to issue the loan.

Russia looks to side step dollar in Turkish trade

http://www.bne.eu/dispatch_text16774

bneOctober 6, 2011

As emerging market currencies continue to fight sharp slides, Russia extended its long-term bid to shun the dollar in late September, discussing with Turkey ways of boosting the use of domestic currencies in bilateral trade relations, reports Bloomberg.

Russia's attempts to chip away at the US dollar's status as the world's reserve currency have only been encouraged by the crises since 2008, which have seen the ruble tumble by 30% or so and then US currency dwindle on the back of QE, hitting Russia's reserves and oil revenues hard. China and many other EMs are also proponents of reducing reliance on the dollar, and Moscow and Beijing opened FX trading in one another's currencies late last year.

Just like China - which has also opened FX trading in a number of other regional EM currencies - Moscow is now pushing to circumvent the effects of the erratic ruble on trades relations with other developing economies. In August, central bankers met in Brasilia to agree that using the ruble and real in trade was more "appropriate" than the dollar.

To that end, banking and government officials from Moscow and Ankara met in the Russian capital late last month to consider "proposals on possible ways to increase settlements in the national currencies and measures needed to broaden interbank cooperation," Bank Rossii said on Wednesday in a statement. Policy makers asked commercial banks to help them study the most promising industries for trade to shift to the ruble and lira, according to the statement. Trade between Russia and Turkey hit $17.46bn in the first seven months of 2011, a 26% boost over the same period in 2010, according to Russia's customs service.

The current carnage among emerging market currencies on the FX markets illustrates the motivation behind circumventing the dollar, with the Russian and Turkish central banks forced into record interventions this week as weakening risk sentiment continue to hit the ruble and the lira hard.

Turkey’s central bank sold a record $750m yesterday, increasing its total intervention since August 5 to almost $4bn. A day earlier, Russia sold $1.15bn, a ‘bigger than usual’ step, with Bank Rossii Chairman Sergey Ignatiev admitting to buying $8bn worth of Russian currency last month.

05:33 06/10/2011ALL NEWS

CSTO interstate commission to discuss military-economic cooperation

http://www.itar-tass.com/en/c154/240856.html

BISHKEK, October 6 (Itar-Tass) —— The interstate commission of the Collective Security Treaty Organisation (CSTO) will meet in Bishkek for its ninth session to discuss economic and military cooperation in the years to come.

Officials from the CSO Secretariat, members of the Business Council under the interstate commission, and Kyrgyzstan’s Minister of Economic Regulation Uchkun Tashbayev will attend the meeting.

The participants plan to adopt several documents aimed at strengthening military and economic cooperation between the CSTO member states.

They will also debate a programme of military-economic cooperation up to 2015, a list of enterprises and organisations whose specialisation should be preserved in the interests of military-economic cooperation, as well as suggestions regarding the drafting of a programme for creating a system for controlling the CSTO collective security capabilities until 2015.

The agenda also includes a draft agreement on standardisation of defence products in the CSTO, development of mechanisms for forming, coordinating and approving lists of military products under the agreement on cooperation among the CSTO member states.

The CSTO is a military-political alliance of seven countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. It was created on the basis of the Collective Security Treaty of the May 15, 1992, which was turned into an international organisation on May 14, 2002. The CSTO received the status of observer at the U.N. General Assembly on December 2, 2004.

The purpose of the Collective Security Treaty Organisation is to guarantee the national security of each of its members and to ensure their territorial integrity. In case of a menace, looming over any member-country, all the other CSTO participants will be duty-bound to give it all the necessary aid, including military assistance. The military-political relations among the CSTO nations hold supremacy over their military relations and contacts with third countries, which are not CSTO members.

The Treaty's overall system of collective security includes some regional subsystems, acting in three directions: in the European direction (the Russian-Belarusian military group) and in the Caucasian direction (the Russian-Armenian group).

Accused global arms dealer goes on trial Tuesday

http://www.channelnewsasia.com/stories/afp_world/view/1157622/1/.html

Posted: 06 October 2011 1551 hrs

NEW YORK: Viktor Bout, a Russian ex-army officer alleged to have overseen the world's biggest private arms dealing network, goes on trial next week in New York.

The trial October 11 in Manhattan federal court of the man US officials have dubbed "the merchant of death" brings to a head an extraordinary saga of furtive flights by ex-Soviet cargo planes, vicious African wars, and finally a sting operation by US agents in 2008 to capture Bout in a Bangkok hotel.

Bout is accused on the relatively narrow, if still spectacular charges that he attempted to sell undercover US agents an arsenal of infantry weapons and surface-to-air missiles for use by Colombia's FARC guerrillas against US anti-narcotics personnel.

Bout has pleaded not guilty and although his New York legal team concedes that he did run a fleet of cargo planes, he never sold or brokered so much as a single bullet. He faces up to life in prison if found guilty.

Jury selection from a pool of 80 will start October 11, possibly extending into October 12, Judge Shira Scheindlin said, with opening arguments either later that day, or delayed until October 17.

Security will be extraordinarily tight for the trial, which is expected to take about three weeks to complete. Even at a brief pretrial hearing Wednesday, officers searched under the courtroom desk and chair that Bout was about to use.

In a highly unusual move, Scheindlin said Wednesday she will also make the 12 jurors and alternates sign a statement swearing they will abstain from attempting to read about the notorious defendant on the Internet or anywhere else.

That is intended to ensure Bout, a striking-looking, mustachioed man mastering multiple languages, gets an impartial jury.

This could still be hard. Although Bout was the most discreet of figures in the shady transport business he admits he commanded in Africa after the collapse of the Soviet Union, his notoriety has grown since to near legendary levels.

A violence-filled movie "Lord of War," starring Hollywood actor Nicholas Cage, was inspired by Bout's life, while the chief US Drug Enforcement Agency agent who organized the sting in Thailand told CBS television that the defendant is "one of the most dangerous men on the face of the earth."

The charges against Bout in New York are hair-raising by themselves. According to the US government, Bout enthusiastically told the US agents he mistakenly believed to be FARC representatives that he could deliver 700 missiles, 5,000 assault rifles and millions of rounds of ammunition, in addition to land mines and explosives.

Bout's more extended resume -- which is not directly at issue in the trial -- allegedly

includes pouring weapons into wars in Afghanistan, Angola, the Democratic Republic of the Congo, Liberia, Rwanda, Sierra Leone and Sudan.

"Those Russian aircraft were built like flying dump trucks. He could move this stuff and drop it with pinpoint accuracy to any desert, to any jungle, to any other remote place in the world. Right into the hands of what I refer to as the potpourri of global scum," DEA agent Michael Braun told CBS.

Prior to the trial, lawyers sparred over what they could be allowed to say in court.

For example, Scheindlin barred mentions of Rwanda and Libya, which she said were irrelevant to this case and would be prejudicial to Bout.

A key prosecution witness -- a former close associate of Bout named Andrew Smulian -- will come with his own baggage as a longtime member of the South African military who boasted on tape of "mowing down blacks like wheat."

During his testimony, Smulian is expected to refer to yet another hot-button issue: the 1993 US military fiasco in a battle in Somalia that became known as "Black Hawk Down."

Quite apart from the courtroom fireworks, the case is overshadowed by tensions between Washington and Moscow. Russia long allowed Bout to live openly in Moscow and complained bitterly when he was extradited in 2010, after a long legal struggle, from Thailand to the United States.

Meanwhile, Louis Belanger, a spokesman for the charity Oxfam, said the Bout case -- and the difficulty of bringing him to justice -- sheds light on the wider problem of unregulated arms markets.

"Whether he's guilty or not, this proves arms dealers have been able to operate in a legal vacuum for way too long," Belanger said. "We have global trade rules about bananas, iPods, and shoes. There should be one on weapons."

-AFP/ac

Zenit-2SB rocket with U.S. satellite blasts off from Baikonurhttp://en.rian.ru/science/20111006/167421071.html

01:31 06/10/2011

MOSCOW, October 6 (RIA Novosti)

A Russian-Ukrainian Zenit-2SB carrier rocket with the U.S. Intelsat 18 telecommunications satellite blasted off from the Baikonur Space Center in Kazakhstan early on Thursday.

"The launch took place as scheduled. The separation of the spacecraft is scheduled for 7:34 Moscow time," a spokesman for Russia's space agency Roskosmos said.

The was initially scheduled for 1:00 on Wednesday Moscow time (21:00 GMT on Tuesday), but Intelsat asked that it be moved to a reserve date, to October 6 at 1:00 Moscow time.

The Intelsat-18 satellite is equipped with 32 transponders and will provide telecommunications services to customers in East Asia, U.S. West Coast and the Pacific Region.

Intelsat Ltd. operates the world's most extensive satellite network, comprising over 50 satellites.

The Zenit-2, a medium-lift two-stage rocket, is produced by the Yuzhnoye Design Bureau in Dnepropetrovsk. Its DM-SLB upper stage is made by Russian space corporation Energia.

01:12 06/10/2011Top News

Zenit carrier rocket with US satellite blasts off from Baikonur

http://www.itar-tass.com/en/c32/241009.html

MOSCOW, October 6 (Itar-Tass) —— The carrier rocket Zenit-2SB with the American satellite Intelsat-18 aboard has blasted off from Baikonur, Kazakhstan.

The carrier rocket with a DM-SLB booster lifted off at 01:00 Moscow time, the Federal Space Agency told Itar-Tass.

An amazingly direct proposalhttp://rt.com/politics/press/kommersant/russia-minister-defense-aircraft/en/

Published: 6 October, 2011, 06:21Edited: 6 October, 2011, 06:23

India has been offered the use of GLONASS for its intended purpose – missile guidance Ivan Safronov, Jr.

India’s defense minister Arackaparambil Kurian Antony’s visit to Moscow ended yesterday. The result of his Tuesday meeting with Russian defense minister Anatoly Serdyukov was the signing of a protocol for the development of bilateral relations in the sphere of military-technical cooperation. In addition to this, Kommersant has learned that, in the course of the discussion, Russia offered Delhi its full military version of the GLONASS system as a means of guidance for future-generation Indian missiles.

One of the decisions which was unanimously supported by both sides was to resume joint Russian-Indian military exercises. They have been conducted several times in recent years, but the most recent scheduled exercises, Indra 2011, failed to take place (Russia, however, argued that the ground and naval parts of the training program fell through strictly due to technical reasons).

The meeting was not without surprises. According to Kommersant’s sources, Russia offered to share the high-precision signals from the Global Space Navigation System (GLONASS) (its intended purpose is military) with India, including for the guidance of India’s ballistic missiles. Kommersant’s informed source in the space and missile industry explained yesterday that India would most likely accept the proposal: “The United States will hardly agree to transfer its GPS high-precision codes to Delhi, and developing an analogous system of its own will take a long time.”

Another major project that was discussed at the meeting was a comprehensive “Super 30” upgrade of the IAF’s Su-30MKI fighter aircraft (up to 40 units) with the help from Sukhoi Company (JSC). The program involves the integration of new electronic warfare systems, as well as upgrades enabling the aircraft to carry the air-to-surface supersonic BrahMos cruise missiles. Initially, the Sukhoi Company is expected to receive two Su-30MKI aircraft in order to work on them in Russia (India wants to upgrade the remaining aircraft on its territory, using the services of HAL India). However, according to Kommersant’s sources, Russia’s aviation industry is yet to confirm the final requirement specifications for “Super 30”, and no fighter aircraft has been sent to Russia, which means that the first upgraded aircraft should not be expected any sooner than 2013 (in the best-case scenario).

But the main problematic issues of the Indian delegation dealt with the Navy. Mr Antony has frequently inquired into the deadline for the completion of works on the Vikramaditya aircraft carrier (formerly Admiral Gorshkov). Russia has once again reassured him that it will complete all work by mid-2012 without any delays (according to Kommersant’s sources, the ship, which is being rebuilt in Severodvinsk, is already more than 85% complete). Indian representatives were also concerned about the transfer of three Project 11356 frigates, which are currently stationed at the Kaliningrad-based Yantar factory and cost approximately $1.6 billion, provisioned under a contract signed

in 2007. According to Russian representatives, they will be supplied in the first half of 2012 – as soon as trials are completed. And the Nerpa nuclear submarine will be transferred to India before December of this year.

Towards the end of the meeting, the parties touched upon the development of India’s military cooperation with other countries – particularly the United States. Defense minister Antony assured Mr. Serdyukov that Russia has no reason to worry, as it “continues to be the leading, and in many ways uncontested in the foreseeable future, number-one strategic partner.”

Severodvinsk nuclear sub completes sea trialshttp://en.ria.ru/mlitary_news/20111006/167432687.html

11:49 06/10/2011

MOSCOW, October 6 (RIA Novosti)

Russia’s new Severodvinsk nuclear-powered attack submarine has successfully completed sea trials, a Russian shipyard said on Thursday.

“The trial was successful. Tests of the ship’s systems were held as scheduled,” Sevmash ship-building company said in a statement.

The Russian Navy will receive its first Severodvinsk nuclear submarine in late 2011. Sevmash is planning to build a total of six submarines of this class.

Russia grants €10 million to Arctic environmenthttp://www.barentsobserver.com/russia-grants-10-million-to-arctic-environment.4969042-116321.html

2011-10-06

Photo: Russian Polar Foundation

- We want the Arctic to be clean, says Minister of Natural Resources and Environment, Yuri Trutnev.

The Russian government agrees to put cash on the table for implementation of the Arctic Council’s environmental priority projects.

The funding will go to pollution preventing initiatives in the Arctic and the funds will be administrated by the Nordic Environment Finance Corporation (NEFCO).

The Russian Federation has launched an extensive clean-up initiative to address environmental legacies impacting the Arctic. We have 194 hotspots  in all Russian territory  including the Arctic to address and we welcome cooperation with NEFCO, not only on financing of the Arctic initiatives but also on exchange of knowledge and opinions, and appropriate technology transfer, Trutnev says.

Also NEFCO expresses their satisfaction with the Russian contribution to the Arctic Council’s priority projects for eliminating eco-hot-spots in the High North.

- We are extremely delighted with the fact that the Russian government is taking an active role in supporting environmental protection in the Arctic region. The financial boost provided under this agreement will enable us to finance a wide range of environmental projects in the Russian Arctic within the near future, says NEFCO’s Managing Director, Magnus Rystedt.

Text: Thomas Nilsen

Moldova: No plans to join Customs Union

http://www.rbcnews.com/free/20111006110405.shtml

      RBC, 06.10.2011, Chisinau 11:04:05.Moldova does not intend to join the Customs Union of Russia, Belarus and Kazakhstan, Moldovan Prime Minister Vladimir Filat indicated, after the country's Communist party, which holds a parliamentary majority, came up with the initiative to join the Union.

      The customs and fee policies of the Customs Unions are at odds with WTO's rules and may be an obstacle in building a free trade zone between Moldova and the European Union, Filat went on to say, stressing that the country remains focused on EU integration.

      Moldova has entered into free trade agreements with all countries of the Commonwealth of Independent States, which do not run counter to WTO rules and Moldova's plans to form a free trade zone with the EU.

Russian activist's case in Moldova deliberately stalled - ambassadorhttp://en.rian.ru/russia/20111006/167423435.html

03:55 06/10/2011

CHISINAU, October 6 (RIA Novosti)

The investigation into the case of a Russian activist, detained in Moldova on charges of instigating riots, is being deliberately stalled, Russia's ambassador to Chisinau said.

Eduard Bagirov was detained on June 16 on suspicion of organizing mass riots in Moldova in spring 2009. A court ruled that Bagirov must remain in custody pending trial.

"Moldovan investigation authorities have failed to provide any evidence of Bagirov's involvement so far. Numerous visit requests by our consul were either turned down or answered too late, let alone our requests to release him" ambassador Valery Kuzmin said.

"This causes perplexity and make us think that Bagirov's case is being deliberately stalled, and he is a hostage to Moldova's internal political struggle," the Russian diplomat added.

On April 7, 2009, a crowd of protesters forced their way into the parliament building and the presidential administration. Some analysts say the events in Moldova were a "Twitter revolution," or a spontaneous uprising against the Communist regime, while others maintain it was a thoroughly planned coup.

The ambassador said that "the long-term detention of Bagirov, who even wasn't in Chisinau during the riots, looks absurd anyway."

"It looks even more absurd when we learn that the real participants of the events, who appear on the footage from the parliament square, have not even been summoned to testify in the case," Kuzmin said.

He said the Moldovan authorities should release Bagirov under a written pledge not to leave and stop "creating an unnecessary irritant in bilateral relations."

Bagirov wrote in his blog that during nearly four months of his detention he was interrogated only once for some 20 minutes.

The Russian Public Chamber said in late June the blogger is being held in a Chisinau pretrial detention facility in conditions that do not comply with international standards. Later, Bagirov was transferred to Chisinau's Prison 13.

Old missiles not so old after allhttp://rt.com/politics/press/nezavisimaya/arms-minister-ministry-armenia/en/

Published: 6 October, 2011, 04:35Edited: 6 October, 2011, 04:37

The arms scandal involving an airplane from Libya ended as loudly as it began Svetlana Gamova

The scandal around the airplane from Libya which carried missiles from Moldova to Armenia has ended as loudly as it began. Yesterday Chisinau media sources published a new list of Moldovan arms that have been sold and, contrary to the assurances of the republic’s officials, they were not outdated, but fully operational. This has led a number of Moldovan MPs to suggest that the Moldovan weapons could be fired in Karabakh.

Chisinau journalists realized that “something was off” about the Libyan aircraft at the very beginning when the plane landed in Moldova’s capital on September 12. First, it was a military aircraft that had arrived from Benghazi. Second, it flew almost immediately to Marculesti Air Force Base, from where it departed fully loaded on September 13.

It was subsequently explained by the Moldovan Defense Ministry that the airplane carried outdated arms. The ministry also claimed that the cargo was addressed to “a Latvian firm in Riga”, the name of which had not been disclosed as it was “a commercial secret”. Nezavisimaya Gazeta (NG) reported on the story on September 14. Following these claims, the Latvian Foreign Affairs Ministry issued a statement, in which it denied having any connection with the Moldovan cargo.

But new reports surfaced: Moldova’s Defense Minister, Vitaly Marinuts, again without revealing any commercial secrets, said in parliament that the arms were intended for Armenia. Then, the Azerbaijani Foreign Affairs Ministry invited Igor Bodiu, the Moldovan ambassador in Baku, to explain the situation. After his meeting with the Azerbaijani authorities, he announced that the Moldovan arms deal with Armenia, which has managed to make a lot of noise, is nothing more than “an unfortunate error,” which has nevertheless “brought an unpleasant element to our bilateral relations.” The fact that the arms were sold to Armenia was confirmed to NG by Viorel Cibotaru, an expert with the Geneva Center for the Democratic Control of Armed Forces. He also informed NG that the deal was legitimate and included missiles.

The presence of these missiles (the Defense Ministry did not deny that there were missile launchers and ammunition) needed to be explained to Azerbaijani President Ilham Aliyev by Prime Minister Vladimir Filat during the recent Eastern Partnership summit in Warsaw. Filat noted that all issues had been resolved during the meeting. The prime minister also named the culprit for the scandal the first deputy prime minister and

minister of economy, Valery Lazer. However, under Moldovan law, arms deals can be carried out only if so decided by the government. Lazer was well aware of these rules. Moreover, according to NG’s sources, as an intelligence agency employee, Lazer was promoted to the ministerial position in order for him to control everything that relates to and happens in the economy. So it’s highly unlikely that he conducted the operation without notifying the leadership. This opinion is shared by the deputy editor-in-chief of the Chisinau-based Kommersant Plus, Artem Varenitsa. The fact that the deal was made with the consent and at the instruction of everyone who legally needed to be involved was also expressed by Yury Dominik, chief of the Moldovan Army general staff. He has, apparently, already paid for his viewpoint as the brigadier was recently dismissed.

Nevertheless, Prime Minister Vladimir Filat basically acknowledged that the deal between the Moldovan Defense Ministry and the Latvian company for the sale of 60 tons of weapons was conducted in gross violation of the applicable legislation. It was not based on a decision made by the government, but by a decision of a state commission, which is headed by the minister of economy, Valery Lazer.

But it looks like there is another detail that the government will need to explain to the parliament and the people: why were the arms sold to a conflict zone? This question was raised at a Security Commission meeting by the former head of the Information and Security Service, member of the Communist Party, Artur Reshetnikov. Moreover, the OMEGA agency references a source in the Ministry of Economy as saying that the difference between the contract value and the market price of the weaponry sold amounts to at least $5 million. In other words, the product was sold at a discounted price. According to the agency, the secretly sold batch included some of the most expensive arms models of the National Army.

They included 9V862 automatic checkout equipment, 9V863 Cobra missiles, as well as 9V871-3 for Konkurs-M anti-tank missile complexes. The market price of each of these items exceeds $60,000. The batch also included thousands of Fagot, Konkurs, Shturm-S, and Metis missiles. The market price of these weapon specifications alone exceeds $5 million. In addition to these types of weapons, the contract includes high-cost launchers for jet-powered anti-tank missiles, which according to the Ministry of Economy’s report, were also sold at a noticeably discounted rate. Earlier, at a meeting of the parliamentary National Security Commission, to which the defense minister Vitaly Marinuts was invited as a result of the messy deal, it was stated that the transaction amounted to only 38 million lei ($3.25 million).

GERB Presidential Runner Assures Bulgaria Will Stay Friends with Russiahttp://www.novinite.com/view_news.php?id=132711

Diplomacy | October 6, 2011, Thursday| 190 views

Rosen Plevneliev, presidential candidate of ruling center-right party GERB, has vowed not to obstruct the activity of Russian companies.

In an interview for Russia's Kommersant, as cited by the Bulgarian Telegraph Agency (BTA), the former Regional Development Minister, largely tipped to be the front runner in the presidential election, gives assurances that he will not hinder the implementation of the Belene NPP project and the South Stream gas pipeline for which Moscow has been lobbying.

By saying this, GERB's presidential runner rejects claims of experts that relations between Sofia and Moscow might get particularly complicated if a pro-Western politician is elected head of state.

According to the local correspondent of the Russian business daily, Plevneliev's election program focuses on support for small and medium-sized enterprises (SMEs) by lowering taxes and mentions very little about his foreign policy orientation.

The journalist further reminds of a Kommersant publication dated September 21 stating that "if Mr. Plevneliev is elected head of state, Russia will lose a key partner in Bulgaria - current President Georgi Parvanov."

After the article was extensively commented upon, Plevneliev contacted the journalist to assure him that "If I do win the elections, we will be great friends with the Russian Federation".

GERB's presidential hopeful went on to say that he would not get in the way of projects on the agenda of Russian state-owned companies in Bulgaria, among which Belene NPP, the Burgas-Alexandroupolis oil pipeline and the South Stream gas pipeline.

He also remarked that "Russia is not all about two or three projects", which was why he intended to develop relations with Moscow on all fronts.

According to Kommersant, however, Plevneliev has not guaranteed that he will support all three projects.

The publication specifies that he has just said that he is against holding a referendum on Belene NPP because the terms of the contract are unclear.

The Russian daily further points out that, judging by the actions of GERB members, Sofia is in no hurry to implement the nuclear power plant project.

Russia values infrastructures projects in Serbiahttp://www.emg.rs/en/news/serbia/165599.html

06. October 2011. | 07:33

Source: Tanjug

Taking part in the 11th Economic Summit in Belgrade, Konuzin said the South Stream project should give a new impetus to the entire Serbian economy. He expressed expectation the pipeline will allow a series of chemical companies to crop up in Serbia, strengthening its export potential.

Russian Ambassador in Serbia Alexander Konuzin said Tuesday that his country values the infrastructure projects it has undertaken in cooperation with Serbia, especially the construction of the South Stream pipeline.

Taking part in the 11th Economic Summit in Belgrade, Konuzin said the South Stream project should give a new impetus to the entire Serbian economy. He expressed expectation the pipeline will allow a series of chemical companies to crop up in Serbia, strengthening its export potential.

According to Konuzin, the distribution of Russian natural gas should strengthen the infrastructural and energy safety of Europe as a whole. The South Stream project is economically justified and will bring Serbia a stable revenue from transit taxes, Konuzin said.

The Russian diplomat reiterated that the Nabucco and South Stream pipelines are not conflicting projects. "Even if the Nabucco project is realized, there will still be demand from European countries for a large quantity of gas," Konuzin noted.

He also mentioned other infrastructure projects which should be realized in Serbia with the help of Russian loans, in the area of railway transport. Konuzin said there is a possibility Russian companies will take part in the reconstruction of the Belgrade-Bar railway.

River transport is also important for Russia, Konuzin said, noting Russian investors could get involved in the modernization of Serbian ports. Russia considers Serbia the key country to cooperate with in South East Europe, Konuzin said, adding Moscow wants close cooperation in various areas in the interest of both countries.

Macedonian-Russian commission reviews possibilities for bolstering economic cooperationhttp://bsanna-news.ukrinform.ua/newsitem.php?id=17352&lang=en2011-10-06 MIA

Ohrid, October 6. (MIA). The Macedonian-Russian intergovernmental commission meets Thursday in Ohrid to review the possibilities for bolstering the economic cooperation.

Macedonian Vice-Premier and Finance Minister Zoran Stavreski and Russian Deputy Minister for Regional Development Maxim Travnikov will co-hair the talks of the two delegations in Ohrid.

Trade exchange is a dominating form of the Macedonian-Russian economic cooperation. The Russian Federation has been among the top ten trade partners of Macedonia for many years. The trade exchange between the two countries in the first half of this year year reached US$ 374,3 million, being higher for 39 percent in comparison to 2010. However, Macedonia has been making large trade exchange deficit - covering the import (mainly oil and natural gas) with less than five percent of export. Macedonia's export to Russia is mainly comprised of pharmaceutical products. This year the export of medications has been higher for 60 percent. The export of fresh fruits and vegetables has also registered substantial growth.

The activities of Macedonia's Government for attracting foreign investments have also brought Russian businessmen to Macedonia. This August Russian company "Prodis", part of the pharmaceutical holding "Protek Group", kicked off a construction of a plant at the free trade zone 'Bunardzik'. The project is worth EUR five million.

Bosnia’s Republika Srpska attracts new Russian investorshttp://www.balkans.com/open-news.php?uniquenumber=122178

Chief Representative of the Bosnia’s Republika Srpska in  Moscow Dusko Perovic said that the RS is on the great way to attract new Russian investments in the energy sector, adding that a Russian businessman Rashid Serdarov already started preparations for the construction of a new unit of thermal "Ugljevik three", valued at more than 550 million euros.

Perovic said that currently negotiations is with the Russian state company "Russian hydro", which has numerous hydropower plants across Russia, even in Turkey, which is interested in building hydroelectric power plants in the "Upper Horizons" on the river  Trebisnjica.

He added that another big Russian company intends to install the factory to manufacture turbines for hydroelectric power and 30 megawatts in RS, considering that in this part of

Europe is a huge demand for these machines.

According to him, there is ample space for the sale of food products from Serbian to Russian market, particularly fruits which are now exported sporadically.

Perovic said that the right market for products from the RS the Russian  province, and some cities, like Kursk, and that they are willing to make the shopping center to call the "Republika Srpska ", in which it will sell only the products from RS.

Source: Press RS

Kazakhstan welcomes Putin's Eurasian Union concepthttp://www.telegraph.co.uk/news/worldnews/asia/kazakhstan/8808500/Kazakhstan-welcomes-Putins-Eurasian-Union-concept.html

Governments in the West may have read with alarm that Russian Prime Minister Vladimir Putin wanted to build a Eurasian Union out of the former Soviet bloc but in Kazakhstan the news was welcomed.

By James Kilner, Astana

8:20AM BST 06 Oct 2011

Kazakh President Nursultan Nazarbayev first mentioned the concept of a Eurasian Union during a speech at a Moscow University in May 1994, less than three years after the breakup of the Soviet.

Since then Kazakhstan has transformed itself from a Central Asian backwater with aging Soviet infrastructure into a confident, global energy supplier complete with a new capital city full of glass and steel towers designed by some of the world leading architects.

But despite massive investment from the West and more recently China, the old ties to Russia remain strong as Roman Vassilenko, head of press and information at the Kazakh foreign ministry, explained.

"Kazakhstan and President Nazarbayev personally have always stood for closer economic integration with Russia and other countries of the former USSR," he told the Daily Telegraph.

"The Eurasian Union that President Nazarbayev first proposed in 1994 is envisaged as a mutually beneficial union of mutually respectful partners."

Kazakhstan is already an enthusiastic member of the customs union with Russia and Belarus that Mr Putin sees as the launch pad for a more integrated Eurasian Union.

In his article for the Russian newspaper Izvestia, Mr Putin wrote that a Eurasian Union would not be a return to the Soviet Union. Instead he described a modern economic and currency union that would stretch further into Central Asia and include both Kyrgyzstan and Tajikistan.

Businesses in both Kyrgyzstan and Tajikistan have faced higher tariffs trading with Kazakhstan and Russia since the customs union came into force this year putting pressure on their political leaders to join the union. Kyrgyzstan has since officially applied to join and Tajikistan is thinking about applying.

Most analysts, though, don't expect Uzbekistan and Turkmenistan, which are both rich in natural resources, to join a Russia-lead economic union.

Dosym Satpayev, an Almaty-based analyst, said he thought that Mr Putin's real motive behind creating the customs union and potentially the Eurasian Union was political.

"The Eurasian Union is important for Russia at it will let them remain strong in international affairs," he said.

In contrast he said that Mr Nazarbayev's aims were driven by a desire for access to the Russian market and to give Kazakhstan more options.

"This will show everybody that he is able to pick from a lot of partners," Mr Satpayev said. "This is a position of strength."

06.10.2011 8:20

Press tour of Russian regional mass-media representatives to Belarus continues.

http://www.tvr.by/eng/society.asp?id=55625

Today they are in Zhlobin. Acquaintance with the Belarusian Metal Works and social and cultural facilities are planned. And yesterday the Russian journalists visited Hoiniki. There they got acquainted with the development of the regions which suffered from the

Chernobyl Disaster. The Russian quests visited the Dairy Products Enterprise and the Polessky Radiation-Ecological Reserve. Only 96 abandoned settlements, whence more than 20 thousand people were dishoused remained there.

07:32 06/10/2011ALL NEWS

Putin to attend “Russia’s Calling” investment forum in Moscow

http://www.itar-tass.com/en/c154/240860.html

MOSCOW, October 6 (Itar-Tass) —— Prime Minister Vladimir Putin will attend the “Russia’s Calling” investment forum organised by VTB Bank in Moscow.

The main purpose of the forum is to “facilitate investments in the Russian economy, develop dialogue and partnership between Russian business and international investors”, the government press service told Itar-Tass.

The topics to be discussed include “Russia and the World: Road to 2020”, “Re-evaluation of the Growth Model – Capital Modernisation”, “Lifting Development Restrictions – Infrastructure of Tomorrow”, “Investment Management in Russia – Challenges and Opportunities”, and “Internationalisation of the Russian Capital Markets”.

More than 1,000 participants will take part in the forum. They will be addressed by Minister of Economic Development Elvira Nabiullina and Central Bank Deputy Chairman Alexei Ulyukayev who are scheduled to attend the plenary session.

Also attending will be Russian businessmen, economists, heads of large foreign investment companies, international financial institutions and banks, representatives of the Western economic school.

RT News line, October 6

United Russia may nominate Putin as presidential candidate before Duma pollhttp://rt.com/politics/news-line/2011-10-06/#id19723

Prime Minister Vladimir Putin could be nominated as a candidate for president even before the December parliamentary elections, at the end of November, Kommersant daily writes on Thursday. The ruling United Russia party held the first stage of its congress on

September 24, when President Dmitry Medvedev was put at the head of the list of the party’s candidates for the Duma poll on December 4. He also proposed at the time that United Russia should nominate Putin for president. The second part of the congress may be held before the parliamentary elections, the premier’s press secretary Dmitry Peskov told the paper. The final decision on the date of the congress has not been taken yet and will depend on the course of the election campaign, the party sources said.

United Russia may convene earlier than scheduled - paperhttp://en.rian.ru/russia/20111006/167426097.html

06:29 06/10/2011

MOSCOW, October 6 (RIA Novosti)

The second part of the pro-Kremlin United Russia party congress may take place in mid-November, a month earlier than previously scheduled, the Kommersant business daily wrote on Thursday.

The first part of the party congress was held on September 23-24, and the second was scheduled to take place in mid-December, after parliamentary elections.

"At the moment we presume that the final part of the congress will be held before the December 4 State Duma elections," said Dmitry Peskov, a spokesman for the Russian premier.

During the September congress, Russian President Dmitry Medvedev proposed Prime Minister Vladimir Putin to run for Russian president in next year's election and said he was ready to do "practical work in the government."

Peskov said he had no information on whether the candidacy of Putin will be officially put forward before the parliamentary elections.

According to the Russian election laws, parties are allowed to put forward their presidential candidates as soon as the election date is officially announced.

The Federation Council should make the formal announcement from November 25 to December 5.

Under the law, the elections are to take place on the first Sunday of March - March 4, and the date should be formally announced no earlier than 100 days and no later than 90 days before the expected election date.

Putin has ‘it’ - Larry Kinghttp://rt.com/news/larry-king-putin-interview-163/

Published: 5 October, 2011, 22:57Edited: 5 October, 2011, 23:16

Russian PM Vladimir Putin was one of the last guests that broadcasting legend Larry King interviewed during the course of his extraordinary career – and Larry told RT he was very impressed with the force of Putin’s personality and charisma.

“I had an affinity with him”, King told RT. “You try to get that with a lot of guests, but I really had it with him…he has qualities that have nothing to do with politics…they change a room.”

The legendary TV host also said that he was not in the least surprised to hear Putin will be running for president in the 2012 election. “There are certain lives that you can’t leave”, said King, “and the political life is one of those. When you talk to a political leader who is either out of office, or not in a position of great power, you miss that power – it’s an aphrodisiac.”

The CNN anchor also spoke at length about what had impressed him about Vladimir Putin back in 2000, saying that even his crew liked him when they filmed in New York.

That first interview, of course, is most often remembered for the exchange between King and Putin about the ‘Kursk’, the Russian nuclear submarine that sank in the Barents Sea in August 2000. Asked by the host about what happened, Putin simply said “It sank.”

It’s become a famous statement – one Larry King called “a great television moment” and a “brilliant way to answer a difficult question. It was a combination of being new and being direct,” King told RT.

Asked to compare the man he interviewed last year to the man he first interviewed in 2000, Larry King stated simply that he liked Putin straight away – as did former President George W Bush. “I found him engaging,” said King. “There are certain people that come into your life and you like them.”

RT News line, October 6

Russian police seize dozens of bombs from alleged drug dealer http://rt.com/news/line/2011-10-06/#id19721

Russian police officers have seized 27 home-made explosive devices from an alleged drug dealer in the Siberian city of Novosibirsk. According to police, they came to search the suspect’s house for drugs and discovered a home laboratory for making explosives. In a further search of his country house police also found different chemicals and other parts for making explosive devices. The man does not deny that the discovered items belong to him, saying he was using bombs to dynamite fish in a nearby lake. He told the police that he learnt bomb-making technology from books and the internet and was buying components in local pharmacies and other stores.

Second Russian businessman killed  Star News Services October 6, 2011 12:00 AM

Read more: http://www.windsorstar.com/Second+Russian+businessman+killed/5509841/story.html#ixzz1Zz9PrEC3

A second businessman has been shot to death in less than two weeks in St. Petersburg, Russia's cultural capital, where contract killings proliferated after the Soviet collapse, officials said Wednesday.

Evgeny Salomatkin, 31, financial director of a vegetable trading company, was killed after gunmen pumped a dozen bullets into him near his home before fleeing in a car, said a criminal investigating committee.

Last week 49-year-old Sergei Sosnovtsev, a director of a market, was shot inside his Porsche in the southeast of Russia's former imperial capital.

Police said that shooting was linked to Sosnovtsev's professional activity and that four people have been arrested in connection with the death.

Contract killings were rife in Saint Petersburg in the years immediately following the Soviet breakup in 1991 but have become rare in recent years.

© Copyright (c) The Windsor Star

Read more: http://www.windsorstar.com/Second+Russian+businessman+killed/5509841/story.html#ixzz1Zz9V45vc

11:14 06/10/2011ALL NEWS

Vice-principal of Irkutsk technical university found dead

http://www.itar-tass.com/en/c154/241099.html

IRKUTSK, October 6 (Itar-Tass) — The vice-principle of the Irkutsk State Technical University was found dead on a parking lot in the city's Sverdlovsk district on Thursday morning, an official at the regional department of the Investigative Committee (SK) told Itar-Tass.

The vice-principle has a gunshot wound; a hunting rifle was found in his car," the SK official said.

A pre-investigation check is underway. Police do not rule out a suicide.

00:40 06/10/2011ALL NEWS

Kadyrov hopes Chechnya to develop as before after RF presidential elections.

http://www.itar-tass.com/en/c154/240843.html

GROZNY, October 6 (Itar-Tass) —— Chechen President Ramzan Kadyrov said he was hopeful that the team of people at the helm of the country will not change after the upcoming presidential elections in Russia and Chechnya will not develop as before.

“The team in the leadership of the country has not changed, and they [Medvedev and Putin] keep going as before,” Kadyrov said on Wednesday, October 5.

He stressed that Chechnya would not deviate from the chosen road: “It is not important at all who will replace whom, whether Putin takes over Medvedev or vice versa. I think nothing will change. We [in Chechnya] will keep going forward as we did before, and keep building a peaceful and prosperous republic and society with a correct spiritual outlook.”

New face of Chechen capitalhttp://rt.com/news/chechen-republic-grozny-city-181/

Published: 6 October, 2011, 05:34Edited: 6 October, 2011, 09:06

Just a few years ago Grozny, the capital of Chechnya, lay in ruins following years of fighting that blighted the city during the 1990s. Fast forward to the present day, though, and an attractive modern city stands where there used to be only rubble.

A big celebration took place last night in the Chechen Republic’s capital, with massive celebrations marking City Day. But there is more than one just day of shows to impress visitors to Grozny.

The city has gone through a massive transformation since being devastated by two conflicts against extremists in the 1990s. Just 10 years have passed and Grozny has gone from a ruined battlefield to a glamorous city.

Chechnya's leader Ramzan Kadyrov is known far beyond his hometown. He is viewed as an authoritarian ruler in the West, but is an effective manager by many fellow Chechens.

And he is ambitious. His vision is to raise devastated Grozny from the ashes and make it the “Dubai of the Caucasus”.

“I never thought it would be possible in such a short amount of time,” says local resident Magomed Magomedov. “What’s happened is some kind of miracle, I can’t believe my eyes.”

The proudest achievement is Grozny City – a complex of international class hotels and business centers.  When they were first proposed there was a lot of skepticism as to whether they would ever be built. Many people thought it was just a pipedream.

But today, five gleaming towers are at the heart of the reconstruction of Grozny and a symbol of the city’s recovery following the destruction wrought at the beginning of the millennium.

But Kadyrov wants to do more than just put up buildings. He is aiming to raise the city's profile on a global scale.

Since the start of the year he has attempted to grab the world's attention by inviting stars from the world of sport and show business to spend time in Grozny.

“We've opened a stadium, a youth centre, an ice palace, and a few cinemas, so people don't see other places on TV and think it's better there than here. On the contrary, we want people to come to us,” says Ramzan Kadyrov.

It is not the first time Grozny has been rocked by large scale events. In May, legendary footballers Diego Maradona and Luis Figo took part in the grand opening of the city’s stadium. Before that other international starts like Roberto Carlos came to the region.

Some 10 years ago it would have been hard to believe that such glamorous and high profile events could take place on Chechen soil. Now it has almost become a tradition.

Chechnya has seen massive progress, but there are still challenges. Terrorism remains a big problem here with attacks taking place on a regular basis.

But locals are putting their hope in investment. They believe if Chechnya attracts more money from outside and the quality of life continues to improve, eradicating terrorism will no longer seem like “mission impossible”.

Dagestan to receive grants for the energy efficiency program implementation http://www.riadagestan.com/news/2011/10/06/7457/

06.10.2011 , 10:14

Makhachkala, October 6, 2011. On October 5 the republican weekly "Dagestanskaya Pravda" held a round table discussion with the representatives of energy companies, supervisory agencies and a number of departments of the republic to consider issues related to energy efficiency improving. The technical director of the company "Dagenergoset" Magomed Kurbanov spoke about the measures taken by the joint stock company in this direction. He told about the company's program aimed at reduction of excessive losses, in the framework of which, the consumers will get new, more accurate meters free of charge. He also touched upon the investment program on implemented each year to update the power supply network.

“This year Dagestan receives 54 million rubles from the federal budget for the priority actions on implementing energy efficiency program. The municipalities need to be more actively involved in this process. If conducted at the proper level, the republic may rely on federal grants” - Ali Kakagasanov, the head of the development and innovation department of the company said.

06 October 2011, 10:02

Russian Orthodox Church to get 13 new dioceseshttp://www.interfax-religion.com/?act=news&div=8781

Moscow, October 6, Interfax - The Moscow Patriarchate's Holy Synod, which convened in Moscow on Wednesday, made the decision to set up 13 new dioceses.

The new dioceses will appear in Kazakhstan and also in the Irkutsk, Orenburg, Ryazan and Saratov regions, in Khabarovsk Territory and the Republic of Tyva, the Russian Orthodox Church said on its website.

On the first day the Synod also selected the heads for the new dioceses. Archbishop Panteleimon of Oryol and Livny will take charge of the Krasnoyarsk Diocese and his place will be taken by Archbishop Antony of Krasnoyarsk and Achinsk.

The participants in the autumn session freed Metropolitan Filaret of Minsk and Slutsk from the duties of chairman of the Synodal Biblical-Theologian Commission.

The post of chairman of the Biblical-Theologian Commission will be taken by Metropolitan Hilarion of Volokolamsk, the head of Synodal Department for External Church Relations.

The metropolitans of Astana and Kazakhstan, and of Central Asia have been entered on the list of the Synod's permanent members - a decision to be confirmed by the Archbishop's Council.

The Synod has also confirmed several general documents on the organization of work with youth, and recommendations to the local commissions for canonization and on the appointment and dismissal of priors at monasteries and convents.

PRESS DIGEST - Russia - Oct 6http://www.reuters.com/article/2011/10/06/press-digest-russia-oct-idUSL5E7L60RL20111006

3:49am EDT

Moscow, Oct 6 (Reuters) - The following are some of the leading stories in Russia's newspapers on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.

VEDOMOSTI

www.vedomosti.ru

- Russian railways will receive an extra 20 billion roubles ($614,1 million) from the state budget in order to build railroads and other facilities for the 2014 Winter Olympics in Sochi, the paper says.

- Russia's Energy Ministry warns oil companies it will regulate gasoline prices if they rise more than 10 percent in one month, the paper writes.

KOMMERSANT

www.kommersant.ru

- U.S. PepsiCo Inc may buy Russia's biggest kvass beverage producer Deka for $160 million, the paper writes citing sources.

- The paper runs an interview with Andrei Kuzyayev, head of Lukoil Overseas , who says 11 percent of all company's production comes from international projects.

($1 = 32.567 Russian Roubles) (Writing by Ludmila Danilova)

Russian Press at a Glance, Thursday, October 6, 2011http://en.ria.ru/papers/20111006/167429934.html

09:55 06/10/2011

POLITICS

Russia supported new UN sanctions on Iran. It abstained from a vote on a Libya no-fly zone.

Moscow's decision to veto a Western-backed UN Security Council condemnation of the Syrian government's crackdown on protesters angered Washington and its allies and raised questions about whether the Kremlin was adopting a tougher foreign policy in the months before a presidential election expected to be won by hawkish Prime Minister Vladimir Putin.

(The Moscow Times, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta, Moskovskie Novosti)

Prime Minister Vladimir Putin's spokesman Dmitry Peskov raised eyebrows on Wednesday after admitting that his boss's discovery of ancient amphorae in the Black Sea this summer was staged and claiming that fears of an imminent "Brezhnevization" were unfounded because Leonid Brezhnev was a good Soviet leader.

(The Moscow Times, Rossiiskaya Gazeta)

According to opinion polls, more than half of Americans believe that U.S. President Barack Obama will not be re-elected in November 2012 elections

(Rossiiskaya Gazeta)

The post-Soviet alliance, the Commonwealth of Independent States (CIS), should create its own human rights court, similar to the European Court of Human Rights in Strasbourg, First Deputy Federation Council Speaker Alexander Torshin said. Human rights activists say such court, if created, will create obstacles for Russians who want their case to be heard in the Strasbourg Court

(Kommersant)

The second part of the United Russia party congress may be held earlier than initially planned. The congress may convene in November, a month before the elections to the Russian parliament

(Kommersant)

The Russian Central Election Commission approved the United Russia party list

(Kommersant, Rossiiskaya Gazeta, Moskovskie Novosti, Vedomosti)

 

ECONOMY

Capital outflow from Russia has reached about $49.3 billion so far in 2011, with an estimated $18.7 billion leaving in the third quarter, the Central Bank said.

(The Moscow Times, Kommersant)

Europe’s debt problems may shatter the global financial system, but the second wave of the crisis, if happens, will not be as serious in Russia as it was in 2008-2009, Russian economics minister Elvira Nabiullina said

(Rossiiskaya Gazeta)

Russia might export a total of 23 million tons of grain by next June, as this year's harvest is sufficient to meet domestic demand, First Deputy Prime Minister Viktor Zubkov said. The country, which recently lifted a grain export ban introduced last year after severe drought ruined a substantial part of the crops, has already exported 10 million tons

(The Moscow Times, Nezavisimaya Gazeta)

 

OIL & GAS

The searches in European offices of Gazprom subsidiaries are not a routine check, and were conducted as part on in antitrust investigation, European officials said

(Nezavisimaya Gazeta, Rossiiskaya Gazeta)

 

POWER GENERATION

Major Russian plants are switching to producing energy for their needs rather than buying it due to high electricity costs

(Kommersant)

 

BANKING & FINANCE

Another state bank may appear in Russia as Gazprombank - a de-facto state bank at the moment, may soon get such formal status

(Kommersant)

 

DEFENSE

On the eve of a visit by Prime Minister Vladimir Putin to China, the Federal Security Service has pressed spying charges against a Chinese national whom it accuses of trying to purchase sensitive information about the S-300 air defense system.

(The Moscow Times, Nezavisimaya Gazeta, Rossiiskaya Gazeta, Moskovskie Novosti)

Russia will double the number of professional servicemen in its armed forces in the next five years. This will allow to a cut in the required number of conscripts to 80,000

(Rossiiskaya Gazeta)

 

SOCIETY

Nelli Dmitrieva, a police investigator implicated in the prosecution of Hermitage Capital lawyer Sergei Magnitsky has been charged with extorting a $3 million bribe, officials said.

(The Moscow Times, Kommersant Nezavisimaya Gazeta, Rossiiskaya Gazeta, Moskovskie Novosti, Vedomosti, Izvestia)

Pavel Gorbunov, the court marshal who oversaw City Hall's controversial demolishment of the Rechnik cottage settlement last year has been beaten to death with a metal pipe outside his home in southwestern Moscow. The man, whose court-ordered actions infuriated residents of the settlement in southwestern Moscow, was struck at least three times on the head at about 6 a.m. as he walked to his car from his house.

(The Moscow Times, Rossiiskaya Gazeta)

 

SCIENCE

The Nobel Prize for Chemistry 2011 has been awarded to Israeli scientist Daniel Shechtman for the discovery of quasicrystals 

(Kommersant, Nezavisimaya Gazeta, Izvestia)

 

For more details on all the news in Russia today, visit our website at www.en.rian.ru

Managing Choiceshttp://russiaprofile.org/politics/46697.html

Although It's Too Early to Tell Who Will Lead South Ossetia into the Future, the Republic Is Bound to End Up with a Pro-Russian President

Comment by Sergei Markedonov Special to Russia Profile 10/06/2011

Presidential elections in South Ossetia are set for November 13, but passions around the electoral campaign in the partially recognized republic are raging already. While the presidential race began in May, the process is made up of three main stages –  each one characterized by its own particular intrigue.

The first stage can be defined as the intrigue with a third term for the republic's current Head Eduard Kokoity. This year marks the tenth anniversary since he took the presidential seat in South Ossetia. Serious transformations have taken place over these years, both with him personally and with the republic in general. Recall that in 2001, Kokoity was far behind many in terms of his fame and influence over South Ossetian affairs – behind the first President Ludwig Chibirov, the «Moscow Ossetian» Anatoly Chekhoev (who lobbied the republic's interests in the State Duma), the Prime Minister Dmitry Sanakoev (who then switched over to Tbilisi's camp), and leader of South Ossetian communists, Santislav Kochiev. Neither Moscow nor Vladikavkaz even supported Kokoity's nomination in 2001 (back then, the experienced Alexander Dzasokhov was at the helm of South Ossetia).

But over ten years, the second president of South Ossetia has managed to become a reliable ally for the Russian leadership. It was during his tenure that the republic received international recognition and generous financial injections from Moscow, as well as ended the state of permanent military-political conflict with Georgia. But these achivements came with a price. Unlike in Abkhazia, the public political process here has all but disappeared. Those in opposition to the authorities are based in Moscow and in Vladikavkaz, while the leaders of the opposition are periodically accused of having ties to Georgian special forces. This looks all the more absurd since the hero of the August 2008 war, the former secretary of the republican Security Council Anatoly Barankevich, is among the opposition. 

Up until 2009, Eduard Kokoity didn't rule out the possibility that a third term might be a reality. But the Kremlin intervened, using the Head of the Russian Presidential Administration Sergey Naryshkin to voice its position that altering the South Ossetian Constitution would be undesirable. Following the announcement on behalf of Russia's highly placed official, Kokoity made similar statements on numerous occasions. It appeared as though the idea of a «third term» disappeared from the political realm. But not so soon: Kokoity's supporters broached it yet again in May, by starting to gather signatures in support of a referendum on extending Kokoity's tenure. The «cheerleaders» have turned to South Ossetia's Supreme Court for some legal clarifications. After the highest judicial establishment gave a very straight answer on the impossibility of a third term, Kokoity's allies attempted to put pressure in June on the republic's Parliament. This lead to a paradox: Kokoity spoke out against his own third term, but those close to him («the collective Kokoity») acted in the exact opposite manner.

Moscow's involvement and Sergei Naryshkin's compelling words were needed again to

move the campaign from stage one to stage two. While speaking to Kokoity in August 2011, the Kremlin's envoy stated that Moscow will work with any president that «the people of South Ossetia chose to elect.» Thus, the next issue on the South Ossetian agenda became the question of a successor. Up until September of this year, the name of a possible successor to the republic's second president was discussed only in expert circles and the blogosphere. The Prosecutor General of South Ossetia, Taymuraz Khugaev, was named as the most likely contender. However, this claim received no support. At the beginning of September it seemed as though this scenario could very well materialize, after Eduard Kokoity publicly named two possible contenders for the presidential seat, mentioning the Head of the republic's Emergency Ministry, Anatoly Bibilov, together with Khugaev. But on September 18 at the congress of the ruling Unity Party, the question of a successor was settled definitively, and not in Khugaev's favor, but in Bibilov's. What is more, Kokoity himself found a job placement for the next five years: he was elected chairman of the Unity Party (for this, the congress amended the founding statutes), which in turn named Bibilov as the candidate for the presidential post. Thus, the second intrigue was resolved – the successor was named and Kokoity's post-election status was settled.  

After this, the third (and most important) stage of the campaign began: registering the candidates for South Ossetia's presidency. And a scandal broke out here, as well – not just an ordinary scandal, but a situation that may have serious consequences. On September 30 the republic's Central Elections Committee refused to register Dzambolat Tedeev, a famous opposition figure and athlete. Ironically, Tedeev's family helped the current president to come to power ten years ago. In an interview with Kommersant in 2009, while remembering South Ossetia's presidential campaign of ten years back, Tedeev said: «Everyone in the republic knows that in 2001 it was I and my brother Ibragim who brought Kokoity to power.» But much has changed since then, and today the diverse South Ossetian opposition views Tedeev as potentially the most powerful figure who would be able to fight against Kokoity and his successor.

Tedeev is the head coach of Russia's national freestyle wrestling team, and is preparing it for the upcoming Olympic Games in London. He has connections in Moscow and is popular among athletes from the greater Caucasus. The refusal to register Tedeev on the basis of «residence qualification» (he has not permanently resided in the republic over the past ten years) spurred a sharp reaction on behalf of the contender himself, who pronounced his preparedness to fight for his right. In just a few days, his house in Tskhinvali turned into the headquarters of the opposition forces, and it's very difficult to predict with absolute certainty how things will play out with. Tedeev has proved his readiness to wrestle – and not just on the sports mat – more than once. 

So what's the bottom line? Obviously, it's in Kokoity's interest to preserve the image of a mediator. It's always very convenient to distance yourself from the «radicals» and the «extremists» and to act as a consolidator. Secondly, this could help put pressure on Moscow: «Look who is coming, and I am better, I am more reliable.» And even if, in this case, we are not talking about Kokoity himself but his protégé, that doesn't change much.

But then the question focuses on the trust that South Ossetians have in Moscow. In the 1990s and 2000s they believed in Russia's ability to provide for their self-determination away from Georgia. But today, the «Georgian question» is no longer at the top of the agenda. Internal development (the transfer of power, the reconstruction of the destroyed republic, the fight against corruption) now takes precedence. And it is now important for Russia to prove that it can be effective in this area as well. The upcoming elections will show whether the Kremlin is prepared for a softer stance, for the use of «soft power,» and for negotiations. Because both Tedeev and Kokoity, with his likely successor, are unquestionably pro-Russian choices.

Sergei Markedonov, Ph.D., is a political analyst and a visiting fellow at the Center for Strategic and International Studies (CSIS), Russia and Eurasia Program, Washington, DC.

National Economic Trends

Russia cbank says rouble band upper boundary at 37.60http://www.reuters.com/article/2011/10/06/russia-cbank-rouble-idUSR4E7JQ00M20111006

3:53am EDT

MOSCOW, Oct 6 (Reuters) - Russia's Deputy Central Bank Chairman Alexei Ulyukayev said on Thursday that the upper boundary of the rouble's trading corridor is now at 37.60.

Ulyukayev also said that the central bank sold just over $400 million on Wednesday in currency interventions.

The central bank keeps the rouble within a floating band and intervenes when it deems necessary to prevent excessive volatility. (Reporting by Darya Korsunskaya, writing by Lidia Kelly)

TABLE-Russian gold/fx reserves fall to $516.8 blnhttp://in.reuters.com/article/2011/10/06/russia-reserves-idINR4E7KC02P20111006

Thu Oct 6, 2011 12:17pm IST

MOSCOW, Oct 6 (Reuters) - Russia's gold and foreign exchange reserves fell to $516.8 billion in the week to Sept. 30 from $526.0 billion a week earlier, central bank data showed on Thursday. The central bank provided the following figures (in billion dollars):

Latest week 516.8 Previous week 526.0 End-2010 479.4 NOTE - The reserves include monetary gold, special drawing rights, reserve position at the IMF and foreign exchange.

For full reserves history click on www.cbr.ru

(Compiled by Lidia Kelly)

Ruble, stocks rise as world oil prices growhttp://en.rian.ru/business/20111006/167432998.html

11:57 06/10/2011

MOSCOW, October 6 (RIA Novosti)

The ruble regained some of its losses earlier this week on Thursday amid a positive external background and higher world oil prices.

The ruble exchange rate grew 13 kopecks against the dollar to 32.51 on Thursday in MICEX trade as of 11:30 Moscow time.

The value of the bi-currency basket, comprising $0.55 and 0.45 euros, fell 4 kopecks to 37.37 rubles as of 10:01 a.m. Moscow time.

Global prices for Brent crude grew to $102.40 per barrel on Thursday from nearly $101.50 on Wednesday, supporting the Russian currency which heavily depends on international oil price fluctuations.

Market watchers were not convinced, however, that the ruble's fortunes had reversed for long.

"Investors will want to hear from the European Central Bank that, like the US Fed, it is considering market support, and also a good payrolls report in the US tomorrow before allowing themselves that optimistic indulgence. Today's gains will therefore be more of a trader's mark-up than a genuine buyer's move," Troika Dialog said in its research note.

The Russian ruble-denominated RTS stock index grew 3.57 percent to 1,260.64 by 11:31 Moscow time, while the index of the dollar-denominated MICEX exchange went up 3.97 percent to 1,315.95.

In Europe, the FTSE100 rose 0.64 percent to 5,020.72, the DAX grew 0.99 percent to 5,527.01, the CAC40 went up 1.23 percent to 3,010.55 as of 11:32 Moscow time.

"The main investor focus today will be the ECB policy meeting and, in particular, the after-meeting press conference. ECB President Jean-Claude Trichet, now in his last month before retiring, will be pressed to comment on the ECB's position concerning the possibility of adding additional stimuli to the regional economy and how it sees the threat level to solvency in the banking sector," Troika Dialog said.

23:59 05/10/2011ALL NEWS

Russia's fed budget for 2011 to be balanced, economic dynamics fair

http://www.itar-tass.com/en/c154/240840.html

MOSCOW, October 5 (Itar-Tass) — Extra revenues will help Russia get a balanced debt-neutral budget in 2011, Prime Minister Vladimir Putin said Wednesday.

"We plan spending 719 billion rubles /USD 1=RUB 32.5/ to cover the budget deficit in full," he said.

He believes that the extra budget revenues will stand at around 800 billion this year and, in addition to this, the measures aimed at saving will hopefully yield another 131 billion rubles.

By chanelling the greater part of extra revenues to cover the budget deficit, the government plans to cut down the amount of borrowings.

"We'll refrain from borrowing some 394 billion rubles in the domestic market and this means the monies will actually remain in the economy now that some problematic things are present in it," Putin said.

"Russia's economy is displaying fair dynamics on the whole, with the consumer demand growing and the key sectors recuperating at a fast pace," he went on. "The situation with our main exports is good enough on the whole, too."

As he mentioned the extra revenues exceeding 800 billion rubles, the admitted that "the so-called oil and gas revenues account for two-thirds of that sum.

Putin also explained for how the amount of 131 has been accumulated. This has been made possible by the fact that Russia will have to pay less for servicing the state.

"A low and safe level of the state debt is also an indicator of reliability of the macroeconomic situation," he said.

23:48 05/10/2011ALL NEWS

Russia's federal budget for 2011 to be deficit-free - Putin

http://www.itar-tass.com/en/c154/240801.html

MOSCOW, October 5 (Itar-Tass) — Extra revenues will help Russia get a balanced debt-neutral budget in 2011, Prime Minister Vladimir Putin said Wednesday.

"We plan spending 719 billion rubles /USD 1=RUB 32.5/ to cover the budget deficit in full," he said.

He believes that the extra budget revenues will stand at around 800 billion this year and, in addition to this, the measures aimed at saving will hopefully yield another 131 billion rubles.

By chanelling the greater part of extra revenues to cover the budget deficit, the government plans to cut down the amount of borrowings.

"We'll refrain from borrowing some 394 billion rubles in the domestic market and this means the monies will actually remain in the economy now that some problematic things are present in it," Putin said.

Russia Sold $8 Billion, Most Since Ruble’s 2009 Devaluationhttp://www.bloomberg.com/news/2011-10-05/russia-sold-8-billion-most-since-ruble-s-2009-devaluation-1-.html

QBy Artyom Danielyan and Scott Rose - Oct 5, 2011 5:58 PM GMT+0200

Russia’s central bank sold about $8 billion to shore up the domestic currency last month, the most since it arrested the ruble’s devaluation in January 2009, Chairman Sergey Ignatiev said.

Bank Rossii intensified sales yesterday, selling $1.15 billion on the currency market, a “bigger than usual” step, Ignatiev told reporters today in Moscow. The ruble yesterday depreciated against the dollar for a fifth day, plunging to the weakest close in more than two years.

Policy makers in emerging markets are seeking to bolster their weakening currencies as global demand sags and the debt crisis on both sides of the Atlantic drains capital. Turkey’s central bank today sold $750 million for liras, its biggest such sale on record, after offering as much as $1.35 billion in a daily auction. The ruble is the fourth-worst performer so far this month among the 25 emerging-market currencies tracked by Bloomberg.

Brazil’s central bank will keep acting in the dollar futures market and has “no limit” on how much it can use derivatives to stem a decline in the real, Aldo Mendes, director of monetary policy at the bank, said Sept. 22. Authorities will combat “herd behavior” in the financial markets, Korean Finance Minister Bahk Jae Wan said Sept. 23.

Capital Flight

Outflows of capital from Russia reached an estimated $18.7 billion in the third quarter, bringing this year’s total to $49.3 billion, Bank Rossii said in a statement late yesterday. Data were revised to show that $21.4 billion and $9.2 billion left the country in the first and second quarters, respectively, the statement showed.

The central bank “will discuss” a revision of its forecast for $36 billion of capital flight this year, Ignatiev said. Outflows reached $13 billion last month because of an unfavorable investment climate and global economic problems, he said in a speech to lawmakers today.

The currency sales suggest the bank will guard against sharp currency moves after burning through about a third of its international reserves, the world’s third-largest, two years ago in a bid to prop up the ruble.

The regulator will “maintain its presence on currency markets exclusively to limit excess volatility of the exchange rate, without influencing its trajectory as determined by fundamental factors,” Bank Rossii said in a draft three-year plan for its monetary policy published on its website Oct. 3.

The central bank drained more than $200 billion in the six months through January 2009 to stem a 35 percent devaluation of the ruble to the dollar.

Band Shifted

Bank Rossii probably shifted the upper end of a floating five-ruble band in which it manages the ruble by 10 kopeks to 37.6 versus its target dollar-euro basket after yesterday’s sales, Nikolay Podguzov and Maxim Korovin, analysts at VTB Capital in Moscow, said in an e-mailed research note today.

The basket corridor is moved by 5 kopeks once Bank Rossii’s interventions top $600 million.

The ruble strengthened 0.5 percent to 32.5625 per dollar and rose 0.3 percent to 43.3425 against the euro by the 7 p.m. close in Moscow. The moves left it 0.4 percent stronger at 37.4135 against the central bank’s basket of about 55 percent dollars and 45 percent euros, which it uses to ease swings in the ruble that hurt exporters.

‘Grounds’ for Stronger Ruble

There are “grounds” for the ruble to rebound to 30 per dollar, Deputy Economy Minister Andrei Klepach told reporters today in Moscow. Capital outflows may reach $50 billion this year, he said.

The nine-month capital outflows equal about 4 percent of Russia’s gross domestic product and were “worse than expected,” Natalia Orlova and Dmitry Dolgin, analysts at Alfa Bank in Moscow, said today in an e-mailed note. Alfa, Russia’s largest private lender, forecasts 2011 outflows of $60 billion.

The third-quarter figure “may become an additional factor triggering expectations of ruble depreciation and thus higher demand for foreign currency,” they wrote.

To contact the reporters on this story: Artyom Danielyan in Moscow at adanielyan@bloomberg.net; Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editors responsible for this story: Mark Sweetman at msweetman@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

Strategic Rehearsalhttp://russiaprofile.org/politics/46637.html

As Prime Minister Vladimir Putin Prepares for Another Stint in the Kremlin, Russian Auditors Said the Country’s Liberal Development Strategy Should Be Sent Back to the Drawing Board

By Tai Adelaja Russia Profile 10/05/2011

With Russia’s crucial national elections quickly approaching, the Russian government has set out to redesign a credible roadmap that will help the country leapfrog into modernity under a soon-to-be President Vladimir Putin. In a rare show of confidence in policy matters, Russia's Audit Chamber has criticized the government-sponsored Strategy 2020, aimed at guiding the country into a politically stable and economically prosperous future. The auditors said the authors of the development strategy must rework and reframe the country’s strategic policymaking to reflect lessons learned from the recent global financial crisis and the ongoing fallout from Europe's debt crisis.

Russia’s current 2020 Economic Strategy "lacks a systematic approach" and is in most part "too optimistic," as it fails to take into account the lessons of the 2008 to 2010 financial crisis, the Audit Chamber said in a report cited by the Vedomosti business daily on Tuesday. In their report, the auditors also appeared to be venturing into new territory, predicting that the world “faces a high risk of a second recession” with consequences more dire than the first had.

Major threats to Russia’s economy, the auditors said, stem from the country’s excessive reliance on exports of raw materials, as well as the orientation of those exports to the European market. But while Russia relies on the export of its resources, it has no way to determine their prices, the auditors said. The cost of financial assets is also determined by foreign speculators, they complained. In general, Russian external trade has been too focused on European countries, which together received 51 percent of Russian exports last year, compared to just 14 percent for CIS nations, the auditors said.

The Audit Chamber also said Russia's external economic strategy as outlined in Strategy 2020 amounts to a little more than an academic exercise, as the United States and Europe continue to be paralyzed by homebrew financial woes. The auditors would like the government to work out a plan for minimizing the risks of spillover. “Today, measures for coming out of crisis should be strategic rather than tactical,” they said in the report. The auditors also faulted the authors of the 2020 Strategy for failing to provide specific suggestions on how the government should transform Russia's economic system and implement social policies. “In fact, Strategy 2020 proposes changes in social policies without any reforms in the real sectors of the economy,” the report says.

One of the drawbacks of Strategy 2020, the auditors claimed, was its lack of a clear and consistent strategy for transforming state paternalism – which was in part a legacy of the Soviet past – into social partnership. To implement social partnership across the political spectrum, the strategy’s authors should set short-term and long-term priorities for certain social groups like children or youth, the auditors said.

Billed as a roadmap for Russia in pursuit of a grander ambition to become one of the world's top five economies, the 2020 Strategy has the ultimate goal of ushering Russia into a politically stable and economically prosperous future. The concept has been a work in progress since 1999, when then-Prime Minister Vladimir Putin first asked a young economist, German Gref, to put together a concept for the country's socio-economic development till the year 2020.

But far from being a narrow domestic strategy, Putin's stated goal has been to establish Russia as a global leader in technological innovation and global energy infrastructure, as well as a major international financial center. The draft concept, which has been subject to constant revisions, envisages three scenarios – an inertia scenario, energy-propelled development and innovation-based development – of which the last is regarded as the optimal. Both President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly said that the only way for the country to move forward is through innovation and modernization. 

During a February meeting with Premier Vladimir Putin, the experts – including notable economist Vladimir Mau of the Russian Academy of Economy, Yevsei Gurvich of the Economic Expert Group, and Yevgeny Yasin, a former economy minister – advised the government to cut social expenses and concentrate on reducing the budget deficit. But the experts also called for political reform that could both attract increased Western investment and achieve the “innovation” scenario – something the local media says the government is reluctant to do.

With Russia unable to wean itself off of its heavy reliance on energy resources, many economists have questioned the premises of the 2020 Strategy. Former Finance Minister Alexei Kudrin, an ardent critic of the concept, has argued that the government will not have the necessary funds to push the project through. Sergei Petrov, the Russian billionaire founder of the Rolf car dealership, dismissed the strategy as ineffectual, saying “there could be no miracles” over the next nine years. "What prospects can there be for a government with archaic institutions, a commodity-dependent economy, rampant corruption, insecure property rights, corrupt courts, ‘rigged’ elections, immoral power and an indifferent society?" Petrov, who is a member of the Just Russia party, wrote in a recent opinion piece for Vedomosti, adding that the global price of oil is a "time-bomb" that is ticking under Russia's 2020 development program.

Business, Energy or Environmental regulations or discussions

Tatneft, Rosneft, Gazprom: Russia Equity Market Previewhttp://www.bloomberg.com/news/2011-10-05/tatneft-rosneft-gazprom-russia-equity-market-preview.html

QBy Anna Shiryaevskaya - Oct 5, 2011 10:01 PM GMT+0200

The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index lost 0.2 percent to 1,265.67. The dollar-denominated RTS Index dropped 0.6 percent to 1,217.21.

OAO Tatneft (TATN) (TATN3 RX): The oil producer located in Russia’s Tatarstan region is due to report second-quarter earnings. Tatneft fell 2.3 percent to 124.86 rubles.

OAO Rosneft (ROSN RX): Oil rose for the first time in four days after the U.S. government reported an unexpected stockpile decline in the world’s biggest crude-consuming country. Russia’s biggest oil producer fell 0.1 percent to 175.03 rubles.

OAO Gazprom (GAZP RX): Gazprom and RWE AG have advanced in talks regarding the Russian natural gas company’s entry into the German power market and an agreement is probable, Sueddeutsche Zeitung reported, citing unidentified people close to the companies. The Moscow-based gas exporter fell 0.9 percent to 143.03 rubles.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

VTB to take $3.4 billion Bank of Moscow share issuehttp://www.reuters.com/article/2011/10/05/us-bankofmoscow-shares-idUSTRE7942LG20111005

Wed, Oct 5 2011

MOSCOW (Reuters) - Russia's VTB (VTBR.MM: Quote, Profile, Research, Stock Buzz) will pay 111.2 billion roubles ($3.4 billion) to buy an additional share offering by Bank of Moscow (MMBM.MM: Quote, Profile, Research, Stock Buzz) to recapitalize the lender it bought this year, according to documents for a shareholders meeting.

The additional share issue is part of a broader state bailout plan to shore up Bank of Moscow, where almost half of its loan book was found to be doubtful after VTB took control over its peer earlier this year.

Bank of Moscow, which has already received a bailout loan worth 295 billion roubles to cover the worst part of its bad loan book, plans to hold an extraordinary shareholders meeting on October 26.

It said in a document for the meeting that the price for the additional issue of 100 million shares is set at 1,111.77 roubles per share, bringing the total cost of the subscription to 111.2 billion roubles.

Bank of Moscow's shares were trading at 838.5 roubles per share on Wednesday, meaning that the rights issue will be priced at a premium to the market.

VTB increased its stake in Bank of Moscow to 80.57 percent last week from 46.5 percent, planning to inject up to 100 billion roubles to boost the unit's equity by the end of 2012. Reuters could not reach VTB for immediate comment on Wednesday.

Bank of Moscow Chief Executive Mikhail Kuzovlev said last week the share issue may come by the end of this year. The latest move may prompt the remaining Bank of Moscow shareholders to sell their stakes before year-end.

($1 = 32.725 Russian Roubles)

(Reporting by Katya Golubkova, Editing by Douglas Busvine and Erica Billingham)

VTB Bank to sell Kiev bank as part of ‘superfluous asset’ sales http://www.ukrainianjournal.com/index.php?w=article&id=13281

Journal Staff Report

KIEV, Oct. 5 – Russia's VTB Bank is planning to sell Kiev-based BM Bank, which the bank owns through Russia's Bank of Moscow, Andrei Kostin, president and chairman of VTB Bank, said in an interview with Kommersant newspaper.

"We want to focus operation of Bank of Moscow mainly on Moscow city and Moscow region and around ten other regions, where the bank has strong positions. We remove the foreign chain and other regions from the bank's management, where the bank's share is small. We'll sell superfluous assets, for example, in Belarus and Ukraine," he said.

VEB May Become Gazprombank Shareholder, Vedomosti Sayshttp://www.bloomberg.com/news/2011-10-06/veb-may-become-gazprombank-shareholder-vedomosti-says.html

QBy Yuliya Fedorinova - Oct 6, 2011 6:38 AM GMT+0200

Vnesheconombank, Russia’s state development bank which is known as VEB, may convert a 90 billion ruble ($2.76 billion) loan to OAO Gazprombank into shares, Vedomosti reported today, citing unidentified officials familiar with the plan.

Gazprombank’s shareholders approved the new shares issue, according to the Moscow-based newspaper.

The state bank may get between 17 percent and 19 percent of Gazprombank, according to the lender’s valuation made in June, Vedomosti said.

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

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

AFK Sistema May Change Its Dividend Policy, Vedomosti Reportshttp://www.bloomberg.com/news/2011-10-06/afk-sistema-may-change-its-dividend-policy-vedomosti-reports.html

QBy Yuliya Fedorinova - Oct 6, 2011 6:55 AM GMT+0200

OAO AFK Sistema may change its dividend policy, Vedomosti reported today, citing Mikhail Shamolin, the company’s president.

A management plan, which has yet to be approved by the board, envisages paying shareholders 10 percent of the company’s net income plus 10 percent of the profit from asset sales, the newspaper said.

Under Sistema’s current policy, as much as 40 percent of net income may be paid to shareholders, but the actual figure is much lower, Vedomosti said.

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

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

UPDATE 1-Evraz halts Raspadskaya stake sale talkshttp://uk.reuters.com/article/2011/10/06/idUKL5E7L60PZ20111006

8:29am BST

(Writes through with statement, context)

* Evraz cites high market volatility

* Disposal unlikely in the next 12-18 months

MOSCOW, Oct 6 (Reuters) - Russian steelmaker Evraz Group SA (HK1q.L: Quote, Profile, Research) said on Thursday it had discontinued talks on the potential sale of its 40 percent indirect equity stake in coal miner Raspadskaya due to high market volatility.

The controlling stake in the miner belongs to a holding company called Corber, which itself is owned by Raspadskaya management and steel company Evraz (HK1q.L: Quote, Profile, Research), in which tycoons Alexander Abramov and Roman Abramovich are major shareholders.

Evraz put Raspadskaya up for sale earlier this year, but failed to find a buyer for the coking coal producer, which suffered an accident at its main mine in 2010 that killed 67 pit workers.

"We consider the likelihood of us disposing of our stake in Raspadskaya over the next 12 to 18 months as low ... although we do not rule out this possibility in the long-term", Evraz CEO Alexander Frolov said in a statement.

Last month, Raspadskaya said its net profit fell 57 percent in the first half of 2011 to $99 million, revenue by 19 percent to $377 million and earnings before interest, taxation, depreciation and amortisation by 31 percent to $180 million.

Raspadskaya shares, which have been falling faster than the market, rose by around 12.82 percent to 82.00 roubles after the announcement. Russia's benchmark MICEX stock index opened on Thursday up 1.50 percent at 1.284. (Reporting by Aleksandras Budrys, Editing by Douglas Busvine and Helen Massy-Beresford)

Polyus updates on Nezhdaninskoye, Bamskoye and smaller deposits

http://www.bne.eu/dispatch_text16774

VTB CapitalOctober 6, 2011

News: According to Interfax, Polyus intends to launch Nezhdaninskoye in 2016, with capex estimated at USD 580mn, and to construct a BIOX plant. Annual gold output is estimated at 200koz. Also, Bamskoye will be launched in 2016, with 100koz of production and capex of USD 232mn. The Poputninskoye and Panimba deposits are set

to yield 40kozpa after 2016-17, with a BIOX plant possibly being commissioned in 2018 and gold output of 220koz after 2019 (with total capex of USD 462mn). Pilot HL operations might be launched at Chyortovo Koryto, with possible subsequent plant construction and capex of USD 426mn.

Polyus COO James Nieuwenhuys was quoted as saying that the company would be able to continue developing the Kazakh assets on its own, were the deal with the Assaubayev family not to succeed. Commenting on the privatisation of the Sukhoi Log deposit, Nieuwenhuys said that the company was only ready to look at large-scale projects after 2016.

Our View: The announced project development pipeline is largely in line with our expectations. We see the plans as rather ambitious and prone to considerable execution risks, given that Polyus faces the construction of several BIOX operations (i.e. at Nezhdaninskoye), which will need special attention, given the complexity of the technology. At the moment, we conservatively assume the company's production reaching 2.5mnoz in 2020, and do not include the further expansion of Natalka.

The deal with the Assaubayev family has repeatedly been extended this year; the deadline is now set for 12 October 2011, with financing being the main stumbling block. The company is therefore likely to be left with the Kazakh assets; however, we note that notwithstanding its initial operating conditions, these assets possess an extensive resource base, in which Polyus has already invested.

We also welcome the company's intention to concentrate on developing its vast existing reserve base, and regard the news as positive for the company.

Alexander Pukhaev

NLMK obtains exposure to India's transformer steel market

http://www.bne.eu/dispatch_text16774

Renaissance CapitalOctober 6, 2011

Event: Yesterday (5 October), NLMK announced the acquisition of National Laminations Group, an electrical steel service centre in India, for $8mn. It has 16,000 tpa of processing capacity and 15,000 tonnes of warehousing capacity located 200 km from Mumbai, as well as 40,000 tonnes of warehousing capacity located 20 km from Mumbai.

Action: Despite the relatively small size of the acquisition, we think the deal is important

and positive for NLMK.

Rationale: NLMK is the only producer of transformer steel in Russia. While production volumes have been rising, the utilisation rate and prices in this niche segment are still far from 2007-2008 peak levels. In 1H08, NLMK derived approximately 20% of consolidated EBITDA from transformer steel sales. After adding around 1mn tpa of transformer steel capacity, China has imposed import barriers to protect local steel mills; NLMK has shifted its focus towards other export markets, including the EU and India. All of the BRIC countries have recently announced ambitious energy sector development plans; India in particular has great potential in terms of utilities sector development. Thus, building a footprint in the Indian transformer steel market is strategically a very shrewd move for NLMK, in our view. NLMK may launch a new 70k tpa capacity reversing cold-rolling mill in 4Q11, designed to produce grain-oriented high-permeability steel (Hi-B grade under Posco's classification), which will strengthen NLMK's financial position in the global transformer steel market. Only a few steel mills across the globe - including Posco, JFE, Nippon Steel and ThyssenKrupp - have Hi-B-grade transformer steel technology.

Boris Krasnojenov

Activity in the Oil and Gas sector (including regulatory)

Transneft to bear entire capex of Zapolyarie-Purpe pipeline; NEUTRAL http://www.bne.eu/dispatch_text16774

Alfa BankOctober 6, 2011

According to Kommersant, Transneft will bear the entire capex needed for the construction of the Zapolyarie-Purpe pipeline. Earlier it was assumed that oil majors including TNK BP, Gazprom Neft and LUKoil would co-finance the project with Transneft via participation in JSC Zapolyarie, the project operator, making contributions into the latter's equity. In 2016 Transneft was expected to buy out the stakes of the oil companies based on their fractions of capex for the project.

This oil pipeline is needed for companies that develop and operate the oil fields in Yamal region. We take this as rather NEUTRAL for our valuation of Transneft because we have already included the extra capex for Zapolyarie-Purpe in our model. In general, the implication of this capex for the company does not look straightforward and has both pros and cons. The extra capex implies an additional risk to the company's value should it

face problems with pipeline fill going forward or inadequate tariff limits that would not be enough to recoup these investments. On the other hand, given that the company was obliged to buy out the stakes of the oil companies in the project later on, we believe that financing this project on its own from the beginning looks more transparent for shareholders.

The aggregate capex of the project is estimated at RUB120bn, of which Transneft's contribution will be RUB90bn. The planned throughput capacity of the pipeline will be 45mtpa with a pipeline length of 488 km, and it is expected that the pipeline will be fully commissioned by the end of 2015.

Lukoil May Invest $300 Mln in Romanian Project: Ziarul Financiarhttp://www.bloomberg.com/news/2011-10-06/lukoil-may-invest-300-mln-in-romanian-project-ziarul-financiar.html

By Irina Savu - Oct 6, 2011 8:48 AM GMT+0200

OAO Lukoil, Russia’s second-biggest oil producer, may invest as much as $300 million in exploration blocks off Romania’s Black Sea coast, Ziarul Financiar reported today, citing Constantin Tampiza, the local spokesman for Lukoil’s Chief Executive Officer Vagit Alekperov.

The Russian company won licenses together with Vanco International to explore for oil and gas in the Black Sea waters, the Bucharest-based newspaper said today, citing Tampiza. The company needs an approval from the Romanian Justice Ministry and a final government decision before it can start its exploration in the Black Sea, according to Tampiza.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

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

LUKOIL intends to increase its share of international businesses - to 20% of total EBITDAhttp://www.bne.eu/dispatch_text16774

VTB CapitalOctober 6, 2011

News: Kommersant has published a big interview of Andrey Kuzyaev, President of

LUKOIL Overseas. In it, Kuzyaev reiterates the company's strategy to develop its international upstream business. The key target is to increase the share of international business in LUKOIL's total EBITDA to 20%, from 11% at present, in the next five-seven years. LUKOIL Overseas is now actively operating in 13 countries, with Iraq being considered as key region for further expansion.

Our View: We believe it would be difficult for Russian companies to compete with international majors worldwide at the moment due to their lack of expertise and technology. While we do not attribute a negative valuation to LUKOIL's international expansion, it is obviously one of the main concerns associated with the company. We think that this risk needs to be mitigated by the company's discussing its plans with the investment community more frequent and establishing a successful track record.

00:20 06/10/2011ALL NEWS

LUKOIL cuts down oil production forecast to 92 million tonnes

http://www.itar-tass.com/en/c154/240842.html

MOSCOW, October 6 (Itar-Tass) —— Russia’s oil major LUKOIL has cut down its oil production forecast to 92 million tonnes.

The announcement was made by LUKOIL Vice President Leonid Fedun at the expert 400 conference in Moscow on Wednesday, October 5.

Earlier LUKOIL CEO Vagit Alekperov projected the company’s oil production at 95 million tonnes.

Fedun attributed the decrease to a decline in oil production at the Yuzhnoye Khylchuyu oilfield.

LUKOIL expects oil production to stabilise in 2012 and then start growing.

UPDATE 1-Exillon finds more oil in Siberiahttp://www.lse.co.uk/FinanceNews.asp?ArticleCode=d419io8ex0ce5ki&ArticleHeadline=UPDATE_1Exillon_finds_more_oil_in_Siberia

Thu, 6th Oct 2011 08:26Adds details)

* Finds 15.5 metres of net oil pay at EWS I-43 well

* Says wil connect well to production facilities

Oct 6 (Reuters) - Oil producer Exillon Energy Plc said it found oil at a Russian well, and would connect it to the existing production facilities following testing.

The London-listed company said it found 15.5 meters of net oil pay -- referring to the zone of a reservoir that contains economically producible oil -- at its EWS I-43 well in the south-eastern part of the East EWS I field in West Siberia.

'The well flowed water-free oil naturally to the surface with a flow rate of 595 barrels per day,' the company with assets in two oil-rich regions of northern Russia, Timan-Pechora and West Siberia, said in a statement.

Last month, the company found 7.3 meters of effective net oil pay at its EWS I-44 well in the same region.

Exillon shares, which have lost more than half their value over the last three months, closed at 191 pence on Wednesday on the London Stock Exchange, valuing the firm at about 310 million pounds.

(Reporting by Tresa Sherin Morera in Bangalore; Editing by Don Sebastian) Keywords: EXILLION/

(tresa.sherin@thomsonreuters.com; within UK +44 207 542 1810; outside UK +91 80 4135 5353; Reuters Messaging: tresa.sherin.thomsonreuters.com@reuters.net)

Russia's Tatneft H1 earnings more than doublehttp://www.reuters.com/article/2011/10/06/russia-tatneft-idUSL5E7L60EX20111006

3:08am EDT

MOSCOW, Oct 6 (Reuters) - Russia's mid-size oil producer Tatneft said on Thursday its net income more than doubled in the first half of 2011 compared to the same period in 2010 on the back of rising oil prices.

Tatneft's net income attributable to shareholders rose to 39.47 billion roubles ($1.2 billion) from 15.87 billion roubles in the same period last year, the company said.

"Our net income grew mostly due to higher crude oil market prices, however it was affected by increased costs, mainly taxes other than income tax," it said.

Revenues increased to 293.9 billion roubles from 214.61 billion roubles in the first six months of 2010.

Tatneft also said that as a result of a recent turmoil in Libya, it had to entirely suspend its operations in March in the country and evacuate all personnel.

"The Group is not certain if and when it will be able to resume its operations in Libya," Tatneft said, adding that as of June 30 the company had approximately 5.44 billion roubles of assets associated with its Libyan operations, of which 5.15 billion roubles is related to capitalised exploration costs.

($1 = 32.567 Russian Roubles) (Reporting by Vladimir Soldatkin; Editing by Lidia Kelly)

10/05/2011 | 09:35 pm

Tatneft' imeni V.D. Shashina OAO : Figures Demonstrating Results of Our Operations in September and for Nine Months of 2011http://www.4-traders.com/TATNEFT-IMENI-V-D-SHASH-4006474/news/TATNEFT-IMENI-V-D-SHASHINA-OAO-Figures-Demonstrating-Results-of-Our-Operations-in-September-and-for--13828077/

05.10.2011

Crude Oil Production

The amount of 2,680,026 tons of crude oil was produced in the Republic of Tatarstan in September, which accounted for 100 percent (+1.6 thousand tons) versus September of 2010. The production volume for nine months of the year amounted to 24,339,518 tons (100.2 percent) versus the same period of the last year (+52,968 tons).

OAO TATNEFT produced 2,133,124 tons of crude oil in September, accounting for 100.1 percent versus September of 2010 (+2,081 tons), while the production volume from the beginning of the year has amounted to 19,392,938 tons, accounting for 46,092 tons increase versus 2010 (100.2 percent) with the above-the-plan production volume amounting to 394,950 tons (102.1percent). 18,839,387 tons of oil were delivered with the above-the-plan delivery amounting to 245,867 tons, while 120 thousand tons were sent to storage.

19,586,316 tons of crude oil were produced from the fields of TATNEFT Group of companies with the above-the-plan production amounting to 399,894 tons (102.1 percent).

Drilling

Traditional Drilling

The penetration of new drilling for nine months of 2011 amounted to 465.6 thousand meters (488.4 thousand meters in 2010), including 371 thousand meters (400.8 thousand meters in 2010) drilled for OAO TATNEFT. Of this number the production drilling amounted to 365.9 thousand meters and exploratory drilling amounted to 5.1 thousand meters. The penetration for subsidiaries of OAO TATNEFT amounted to 36 thousand meters (18.9 thousand meters in 2010), including 32.6 thousand meters of production drilling and 3.4 thousand meters of exploratory drilling.

Totally 310 wells (327 wells in 2010) were constructed and delivered to the customers, including 238 wells (241 wells in 2010) for OAO TATNEFT with 237 being production wells and 1 exploratory well. 26 wells (10 wells in 2010), including 24 production wells and 2 exploratory wells were constructed and delivered to the subsidiaries of OAO TATNEFT.

Active Well Stock Drilling

The total penetration of sidetracking and horizontal wellbores drilling for nine months of 2011 amounted to 32.8 thousand meters (25.5 thousand meters in 2010), including 16.7 thousand meters (15.6 thousand meters in 2010) drilled for OAO TATNEFT.

75 wells (67 wells in 2010) were delivered to the customers with 49 wells (47 wells in 2010) delivered to OAO TATNEFT.

36 drilling crews performed traditional well drilling operations in 2011. 10 drilling crews were engaged in drilling lateral wellbores and lateral horizontal wellbores. The penetration per one crew in 2011 amounted to 13,199 meters, while in 2010 the penetration per crew amounted to 12,987 meters.

50.4 thousand meters were drilled outside the Republic of Tatarstan. 54.6 thousand meters were penetrated in horizontal wellbores and bottomhole splitters.

Wells Repair

727 well remedial operations were performed in September of 2011 with the number of the well remedial operations performed during nine months amounting to 6,153, i.e. 640 wells less than in 2010 (6,793 wells during 9 months of 2010). The number of remedial operations performed at the production wells reduced by 9.6 percent (from 5,644 down to 5,104) and the number of injection wells repairs reduced by 2.9 percent (from 771 down to 749 wells).

43 wells have been repaired outside the Republic of Tatarstan since the beginning of the year with 34 wells for OOO Tatneft-Samara and 3 wells for OOO Tatneft-Severny, 1 well for OAO Ilekneft and 5 wells for ZAO KalmTatneft (38 wells were repaired at OOO Tatneft-Samara during 9 months of 2010).

The workover operations were performed in 2,009 wells during 9 months of 2011 (285 wells in September), including: production string sealing performed in 296 wells; shutting-off individual layers and recompletion in other intervals in 218 wells; transfer of wells into different categories and wells completion for injection in 106 wells; failure liquidation and cleaning of the production string and bottom hole zone in 191 wells and physical liquidation and re-liquidation in 27 wells.

635 wells were worked over with application of coil tubing (94 wells in September), including 113 wells worked over through the annulus.

Formation hydrofracking operations were performed in 241 wells (27 wells in September) which is 29 percent more than for the similar period of 2010 (187 wells during 9 months).

33 small diameter holes were drilled and completed for OAO TATNEFT during nine months of 2011. At present drilling of one slim hole is in progress for NGDU Prikamneft and one slim hole for NGDU Nurlatneft.

Works on oil recovery enhancement (EOR) were performed in 1,813 wells (209 wells in September) with chemical treatment methods applied in 1,017 wells (97 wells in September). The incremental oil production volume resulting from the application of the enhanced oil recovery methods amounted to 4 million 011 thousand tons of crude oil with the chemical methods accounting for the production of 1 million 884 thousand tons.

Bottomhole area treatment operations with application of OAO TATNEFT's technologies were performed in 2.472 wells during nine months of 2011.

Gazprom

Gazprom to list additional ADSs on LSE

http://www.rbcnews.com/free/20111006105958.shtml

      RBC, 06.10.2011, Moscow 10:59:58.Gazprom has applied to have its additional 2.24bn level 1 American Depositary Shares (ADSs) listed on the London Stock Exchange (LSE) and 8.41bn ADSs delisted.

      One ADS represents two ordinary shares of Gazprom. The listing is expected to be approved on Thursday.

October 06, 2011 11:39

Gazprom not proceeding with ECP placement – organizerhttp://www.interfax.com/newsinf.asp?id=278248

MOSCOW. Oct 6 (Interfax) - Gazprom (RTS: GAZP) has decided not to proceed with a proposed european commercial paper (ECP) placement due to the market situation, placement organizer UBS said in a note for investors.

Gazprom will continue to monitor the market and hopes to place the papers by the end of the year, the note says.

Pr

(Our editorial staff can be reached at eng.editors@interfax.ru)

Gazprombank to be controlled by the state againhttp://www.bne.eu/dispatch_text16774

VTB CapitalOctober 6, 2011

News: According to Kommersant, Gazprombank (GPB) announced yesterday that it plans to convert its RUB 130bn of subordinated debt to VEB, Gazprom and its pension fund Gazfond via new shares. As a result, the share of the non-state shareholder (Gazfond) would fall to below a controlling stake, whereas VEB and Gazprom would together have more than 50% in the bank's equity.

Our View: As the plans for transferring a significant stake in GPB to VEB were discussed in the press earlier, a formal step in this direction comes as little surprise. However, we do not think that it would change the market attitude towards GPB's credit. First of all, GPB has been consistently treated by the bond market as a state-related issuer, despite its ownership structure and its bonds trading close to the yield curves of VTB. Also, we do not expect that the addition of VEB as a significant shareholder would significantly impact GPB's business-model or the degree of potential state support available to the bank. To recap, despite the huge trading losses in 2008-09, the bank did not receive any equity injections and support was limited to subordinated debt (RUB 90bn from VEB, and additional funds from Gazfond and Gazprom). A close business association with Gazprom, in our view, remains the key credit factor for the bank, and we do not see it changing on the back of the upcoming shifts in the shareholder structure.

October 06, 2011 12:28

Gazprombank consolidates 100% of Vasilyevsky Minehttp://www.interfax.com/newsinf.asp?id=278282

MOSCOW. Oct 6 (Interfax) - Gazprombank, which previously controlled CSJC Vasilyevsky Mine, has become the gold miner's sole shareholder and, according to unofficial reports, is considering acquiring other gold mining assets.

Angara Mining plc, which previously held a stake in the mine, as well as the associated Brownypool Trading plc and LLC Angara Management are no longer affiliated with Gazprombank, according to the list of the lender's affiliated entities as of the end of the third quarter. However, Vasilyevsky Mine itself is still listed as an affiliate of the bank.

Sources familiar with the situation told Interfax that the mine's former owner, Angara Mining is no longer a shareholder of Vasilyevsky Mine.

Interfax sources in the mining industry confirmed that the bank was preparing a deal to consolidate 100% of the miner. One source said the Gazprombank group is interested in further developing Vasilyevsky Mine. Another source said Gazprombank is also considering acquiring other gold assets throughout the country and has recruited a geology expert.

Vasilyevsky Mine and Angara Mining, which was previously the mine's sole shareholder, became affiliated entities of Gazprombank on September 14, 2010. The bank acquired shares in Vasilyevsky Mine as a result of the restructuring of the mining company's debt, and as of October 2010 owned 62.5% of shares. However, Gazprombank was not a shareholder of Angara Mining, which was listed as an affiliated entity because Vasilyevsky Mine's general director at the time was also general director of LLC Angara Management, a wholly owned subsidiary of Angara Mining. According to the SPARK database, Angara Management's current general director Alexei Dydychkin headed Vasilyevsky Mine until August 5, 2011, when he was replaced by Vladimir Bukin.

Vasilyevsky Mine was founded in 1992 to develop the Vasilyevskoye and Nikolayevskoye deposits in the Motygin district of Krasnoyarsk Territory. In 2005, the company acquired the licenses to the Ilyinsky, Nizhne-Talovsky and Gerfed properties, and in early 2011 it won tenders for the rights to develop several other properties in this region. At the end of 2010, the regional authorities announced that Vasilyevsky Mine would invest 2.95 billion rubles in 2010-2014 in the development of Gerfed, which would enable it to increase gold production to 4.5 tonnes from 1 tonne in 2009. The regional industry minister said that about 1 billion rubles had already been invested by the end of 2010.

Vp

(Our editorial staff can be reached at eng.editors@interfax.ru)