Russia 110826

Basic Political Developments Russian deputy foreign minister meets with new ambassador of Syria Diplomats: Russia, China Boycott UN Syria Sanctions Talks - Russia, which has

Security Council veto power, has expressed opposition to any UN sanctions targeting the Syrian regime.

News Analysis: Russia Damages Image in Arab Spring - By Howard Amos Russia, Belarus to hold joint military exercises far from NATO states - Russian

generalo Russia-Belarus exercises "The Shield-2011" will be far from the borders of

NATO - will be held from 16 to 22 September at the Russian test sites "Gorokhovets" and "Ashuluk."

No official response from Belarus to Sberbank proposal on $2 bln credit - BPS Bank chief

CIS summit in Dushanbe to discuss 11 draft documents - The CIS summit will be held in the Tajik capital on Sept. 3.

“Hraparak”: Is Putin coming Armenia? - “According to our sources Russian book festival will be organized in some towns of Armenia on the second part of September. It will last nearly for ten days and library-house “Russian book” will be founded in Yerevan. It is not excluded that Russian Prime Minister Vladimir Putin will also participate in the opening of the library. So, other officials will come with him as well”, the newspaper adds.

o Press at a glance: Will Putin visit Armenia? Ambassador: Russian-Kyrgyz enterprise to supply fuel to U.S. air base in Manas -

"A contract will be signed in September to supply jet fuel by the "Kirghiz-Russian joint venture to the Manas Transit Center", Chinaliyev said, recalling that "the U.S. base consumes a significant amount of jet fuel each year".

Kyrgyzstan considers joining Customs Union – envoy: If admitted, Kyrgyzstan will be the only member state of the Customs Union which is also a member of the WTO. The country also fears that membership in the union may hinder its trade relations with China.

Germany's Merkel Cancels Russia Trip Russia ready to help Venezuela with weaponry purchases -"Russia is ready to

loan money to Venezuela," the source said. "Considering the current election campaign in the country, this loan would mean the opportunity to support our key ally in the region."

o Taking the hat off to Venezuela - Hugo Chavez needs Russia in order to protect his country and himself

Russia to coordinate anti-drug efforts with Albania, Macedoniao MIA: Macedonia, Russia to join forces in fight against illegal drug trade o Afghan heroin destabilize the political situation in the Balkans - Head of

Federal Drug Control Service Viktor Ivanov interview to Itar-Tass

Dacic to attend completion of humanitarian demining in Paracin - The demining is done by the Department for Emergency Situations of the Ministry of the Interior, the Centre for the Demining and the Russian Ministry for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters (EMERCOM).

I recognize only my own people’s trial: Mladic in long-suppressed interview - In 1995, just one month after the Srebrenica massacre and three weeks after The Hague Tribunal pressed charges against Mladic, a Western TV crew managed to meet with the general for an interview. But despite the obviously high level of importance and the exclusivity, the interview was never aired. The tapes remained in Bosnia and Herzegovina in private archives and only now is the conversation being released to the public after RT managed to gain access to the materials.

(Yonhap Interview) Kim-Medvedev summit 'very important step' for N. Korea nuclear talks

Trans-Siberia gas pipeline - NK must stop confiscation of Mt. Geumgang assets Russian icebreaker to help U.S. scientists in Antarctic Turkey asks Gazprom to cut gas price - Gazprom raised the price 39% during the

last 29 months, Turkey's Energy Minister Taner Yildiz said. He did not rule out asking for preferences for his country.

o Turkey to decide future of Russian gas contract next week - The Turkish government will next week take a decision on renewing the country's first gas import contract with Gazprom, which ended this year, a spokesman for the energy ministry told Platts Wednesday.

Decision on Belene nuclear project unlikely before autumn - Econ Mino Bulgaria, Russia go to court over Belene nuclear project

Monument to Soviet Army desecrated in Bulgarian capital Indonesia receives six MI 17 helicopters from Russia - Indonesia had already

operated six of this kind of helicopter that came in last year. Besides MI 17, Indonesia also operates five MI 35 anti-insurgent attack helicopters.

Trade value between Vietnam and Russia in the first half of 2011 rose 40 percent from the same period last year to roughly $1.3 billion, Russian customs said. (Reporting by Hanoi Newsroom)

Georgia has reduced the import of grain from RussiaGeorgian lawmakers declare Abkhaz presidential elections illegitimate before they are held

o Rebel Abkhazia elects its third leadero Abkhazia set to elect new president o Abkhazia to hold early presidential electiono Abkhazia residents in Russia may vote in Moscow, Cherkessk

South Ossetia's administrative border with Georgia closed for 24 hours - "The Mosabruni , Artsevi, and Sinagur border checkpoints along South Ossetia’s administrative border with Georgia were closed for 24 hours in connection with celebrations, to ensure safety during the third anniversary of Russia 's

recognition of South Ossetia’s independence, as well as to avoid aggravating the border situation", the Committee reported.

Russia postpones upcoming Soyuz rocket launch - “The launch has been postponed until the first half of September,” Lieutenant General Oleg Ostapenko was quoted as saying by Russian news agencies. “The decision has been taken to remove the rocket from the launch pad.”

Progress freighter loss will cost ISS partners some $100 Mln Siberian illnesses ‘not linked’ to spacecraft crash Boeing with 186 passengers makes emergency landing in Novosibirsk Court to decide on arrest of organiser of Politkovskaya's murder Explosion in NW of Moscow – hooliganism, no victims - police Moscow police try to steal bag containing apartment sale cash Chechen Interior Ministry gave out weapons to officials and businessmen Chechnya saw the first mass baptism in its history Moscow mayor signs plan for Muslims feasts of 2011 Seven forest fires on 126 ha reported in Far East Putin accuses opposition of selling MP seats - The accusations come in response

to opposition parties' criticisms of a proposed law designed to boost political competition by making so-called primaries mandatory for all parties before forming lists for the Duma lower house of parliament election.

Reuter PRESS DIGEST - Russia - Aug 26 RIA Russian Press at a Glance, Friday, August 26, 2011 RON PAUL REPORTEDLY CUTS TIES TO RUSSIAN CHANNEL - Meantime, on his

August 22 show on Russia Today, Kokesh aired a “Happy Birthday Ron Paul” segment that included “an update from Congressman Ron Paul’s campaign” about his fundraising success. The next day, however, he announced he was being terminated by Moscow management and that Paul’s campaign was no longer cooperating with the broadcast.

Sakhalin: Russia's East Asia trump card – AlJazeera Ukraine Seeks to Parry Russian Energy Pressures - The Ukraine is trying to steer a

middle course between Russia and the EU with the ultimate goal being EU membership. by Amiel Ungar

Symposium: Russia After Elena Bonner - In this special edition of Frontpage Symposium, we have gathered a distinguished panel to discuss the recent passing of Elena Bonner, her legacy and the future of human rights in Russia. Posted by Jamie Glazov

National Economic Trends Russia May Have Record High Sunflower Harvest, Vedomosti Says CBR's reserves data suggests zero FX interventions last week - EUR and GBP

appreciation explains much of increase Central Bank buys currency on forex market Russia attracts record foreign investment in January-June

Speculative Benefits - Economists Urge Caution as the Russian Economy Appears to Be Getting a Boost from Surging Capital Inflows

Business, Energy or Environmental regulations or discussions Russian Stocks Heading for Fifth Weekly Decline as Oil Retreats Russian markets -- Factors to Watch on Aug 26 Sberbank roadshow crunches to a halt in Asia Two RUSAL partners seek to sell out-paper - Viktor Vekselberg and Len Blavatnik,

who merged their aluminium assets with RUSAL about five years ago, have offered the stake to Usmanov, the daily reported, citing three sources.

o Russian tycoon Usmanov may buy 15.8 pct stake in RusAl UPDATE 1-Russia's Severstal Q2 net misses forecast Severstal unit builds up stake in High River Gold MMK posts Q2 EBITDA of $380 mln, net profits of $13 mln Acron IFRS net profits skyrocket 290% in Q2 Aegis Ready to Pay 100 Mln Euros for Master Ad, Kommersant Says Russia’s VTB, RenCap Add Bankers as Global Competitors Retreat

Activity in the Oil and Gas sector (including regulatory) Russia to raise oil export duty 1.3% from September Russia to raise Transneft tariffs – paper

o Transneft: Pipeline tariffs may be raised 8% in September-November 2011

Gas tariffs look set to rise 15%; We still see netback parity BASF : Nord Stream Pipeline Connected to OPAL

o Gas pipeline link to Czech border completed Kick-Off For Norwegian-Russian Double-Degree In Oil Technology Russia seems to be getting more interested in the TAPI project - Pakistan

Ambassador to China Masood KHAN - Interview of Ambassador Masood Khan of Pakistan to ITAR-TASS on Trans-Afghan Pipeline

LUKOIL could face a USD 230mn lawsuit TNK-BP to replace the Head of Upstream TNK-BP brings Kulaginskoe field in Orenburg region on stream

Gazprom Gazprom is asked for a discount by Turkey - According to RBC-Daily, Turkey is

demanding a decrease in gas prices on the grounds that Gazprom gave a discount to Italian Edison Company.

Gazprom Clients Must Admit `Mistake,' Komlev Says o Gazprom Defends Oil-Price Link, Says Gas German Customers Made

‘Mistakes’ Wintershall Creates New "Russia" Board Department

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Full Text Articles

Basic Political Developments

08/26 11:38   Russian deputy foreign minister meets with new ambassador of Syriahttp://www.interfax.com/news.asp

Diplomats: Russia, China Boycott UN Syria Sanctions Talks http://www.rferl.org/content/syria_un_sanctions_russia_china_boycott/24308474.html

August 26, 2011 Diplomats at the United Nations say envoys from Russia and China have boycotted UN Security Council talks on a Western-backed proposal to impose sanctions on the Syrian regime of President Bashar al-Assad.

Diplomats said seats reserved for Russian and Chinese envoys were empty at a closed-door meeting on August 25 that had been scheduled to discuss a possible draft resolution.

Russia, which has Security Council veto power, has expressed opposition to any UN sanctions targeting the Syrian regime.

The United States and its European allies have called on Assad to resign and are backing Security Council sanctions against the regime.

Human rights groups say Syrian security forces have killed more than 2,000 people in a crackdown against the antiregime protests that erupted in mid-March.

compiled from agency reports

News Analysis: Russia Damages Image in Arab Spring 26 August 2011By Howard Amos

As the regime of Moammar Gadhafi writhes in its death throes, the rebel leaders set to become the new powerbrokers in Tripoli have promised that contracts signed under Gadhafi will not be reneged on, but Russia's broader reputation as a partner could be harder to maintain.

The Kremlin's acquiescence in the regime change engineered by NATO and imposition of an arms embargo on Libya has discredited Russia in the eyes of other Arab states as a trusted supplier.

"It's irreparable. … We can forget about the reputation of Russia as a reliable arms supplier. The damage has been done not just in the Middle East but all over the world," said Ruslan Pukhov, director of the Center for Analysis of Strategies and Technologies.

Traditional foreign clients of the Russian defense industry are likely to turn away from the country in favor of China, added Pukhov, whose leadership was more reticent about its support for the NATO action.

As in Libya, Russia also has extensive business interests in other Arab countries, and the Kremlin's reaction to any snowballing of the Arab Spring will be closely watched. This is particularly true of Syria, where an estimated 2,000 people have already died in a revolt cruelly suppressed by President Bashar al-Assad.

U.S. sanctions are already in place against Syria, and the European union is likely to impose an embargo on imports of Syrian oil next week. The Syrian government derives about one-third of its revenue from oil exports to Europe.

While Tunisia and Egypt — whose governments were overthrown in the first stages of the Arab Spring — were of little economic significance to Russia, Syria is highly important.

According to data compiled by the Moscow Defense Brief, Russia has well over $4 billion in active arms contracts with Damascus, with the price tag of at least five major contracts impossible to verify.

The Russian-Syrian Business Council, chaired by Dmitry Pumpyansky, head of steel pipe manufacturer TMK, refused to comment when contacted by The Moscow Times. Other firms with large business interests in Syria represented in the council include oil company Tatneft, gas producer ITERA and national carrier Aeroflot.

Asked about the possibility of an international arms embargo on Syria, the head of Rosoboronexport said last week that Russia was "obliged" to fulfill all its arms contracts with the country. But if the momentum of the Arab Spring overtakes Syria, all business agreements could be off.

Although there have been no popular disturbances in Algeria, Libya's western neighbor is also crucial for the Russian arms trade, sitting alongside Syria as one the top five global importers of Moscow's military hardware.

Russian business interests in Libya were extensive under Gadhafi and damaged by the civil war.

The Russia's participation in the United Nations arms embargo imposed at the start of the uprising cost $4 billion in contract cancellations, the country's state-run arms exporter Rosoboronexport said at the time.

Russian Railways was building a railway in Libya under a $3.1 billion contract, while oil and gas companies have invested millions in exploration. Gazpromneft, gas monopoly Gazprom's oil arm, was due to acquire a $170 million stake in Libya's Elephant oil field in conjunction with Italy's Eni just before the violence erupted. The final documents were never signed.

Having supported the rebels, Russian businessmen should be hopeful that their prospects in Libya are more positive, and the Transitional National Council, or TNC, has said repeatedly that contracts signed under Gadhafi will be respected.

"All lawful contracts will be honored," Ahmed Jehani, head of the TNC's reconstruction effort, told Reuters on Tuesday. "There's no question of revoking any contracts."

Russian companies have even made statements about returning to work in the country once the fighting is over.

Eurasia Drilling, one of Russia's largest oil field service providers, said Thursday that it intends to resume its search for acquisitions in Libya after stability returns, Bloomberg reported.

But the nature of the Kremlin's support for the rebels — half-hearted, tentative and tardy — has not won them many friends among the TNC. Many executives and analysts suggest that this reluctance means that Russia will lose out to Western countries in the competition for business in post-Gadhafi Libya.

Abdeljalil Mayouf, information manager at Libyan rebel oil firm AGOCO, said earlier this week that "we don't have a problem with Western countries like the Italians, French and British companies. But we may have some political issues with Russia, China and Brazil," Reuters reported.

And the former Russian ambassador to Libya, who was fired in March, said at the time that Russia's interests in Libya had been "betrayed."

Given the threats to Russia's economic ties with the new Libya and the undermining of trust in its other relationships with Arab states, some analysts point to a general decline of Russia's prestige in the region.

"We are losing the Middle East," said Viktor Mizin, deputy director of the Institute for Strategic Assessment.

The UN Security Council should use dialogue to persuade Syria to end its violent crackdown on protesters, Russia's envoy said Wednesday, hinting that he may veto a

draft resolution being circulated to impose an arms embargo and other measures on President Bashar al-Assad's regime, The Associated Press reported.

Ambassador Vitaly Churkin said he had registered his country's opposition on Wednesday to the sanctions proposed by Britain and supported by France, Germany, Portugal and the United States. The proposal is expected to come up for a vote as early as this week, and Russia is among five permanent council members empowered to veto it.

Read more: http://www.themoscowtimes.com/business/article/news-analysis-russia-damages-image-in-arab-spring/442712.html#ixzz1W7Z9TGUU The Moscow Times

08/26 11:18   Russia, Belarus to hold joint military exercises far from NATO states - Russian generalhttp://www.interfax.com/

GOOGLE TRANSLATIONhttp://afn.by/news/i/156620

Russia-Belarus exercises "The Shield-2011" will be far from the borders of NATO26.08.2011 10:14 | RIA "Novosti"The general staffs of Russia and Belarus signed a joint decision to conduct military exercises "Union Shield 2011" away from the borders of member states of NATO, told reporters on Friday the First Deputy Defence Minister - Chief of General Staff of Armed Forces (AF) Russian Gen. Nikolai Makarov.Teachings of "The Shield-2011" will be held from 16 to 22 September at the Russian test sites "Gorokhovets" and "Ashuluk.""It must be emphasized that to demonstrate transparency, peace-loving policy of the Union State and in support of the defensive character of the regional grouping of troops we have decided to conduct military exercises" Union Shield 2011 "in Russia, far from the border with the states - members of NATO" - said Makarov.The head of the Russian General Staff believes that this move clearly demonstrates our commitment to the leadership of Russia and Belarus to take concrete measures to strengthen European security and unilaterally to limit military activities on the borders of NATO and the Union State."The idea of exercise was developed jointly by the staffs of the armed forces of the Republic of Belarus and the Russian Federation together with the staff of the Western Military District, and is purely defensive", - said the general. He added that given the importance piloted issues, preparing for the exercises began early, after the completion of studies "West 2009".According to the Russian General Staff, in the teachings of "The Shield-2011" will involve about 12,000 soldiers (from the Russian Armed Forces - about 7000, from the

sun in Belarus - about 5000), about 50 planes and helicopters, 200 combat vehicles, including including about 100 tanks. Exercises will guide the Chief of Staff - First Deputy Minister of Defense of Belarus major-general Peter Tikhon and the commander of the Western Military District of the Russian Armed Forces, Colonel-General Arkady Bahini.Makarov said that the joint regional grouping of Russia and Belarus has been in existence for over 10 years and "at the moment is a catalyst for the development of the military component of the CSTO Collective Security."Makarov also said that for the first time in Russian-Belarusian military exercise will take Ukraine."With great pleasure to announce that the first time in post-Soviet era in co-teaching to attend the Army unit (airmobile company) Armed Forces (AF) of Ukraine", - said Makarov.Chief of Staff also said that Russia and Ukraine annually hold naval exercises "Fairway world." "I think it's time to go to a new level of cooperation", - said Makarov.

August 26, 2011 11:18

No official response from Belarus to Sberbank proposal on $2 bln credit - BPS Bank chiefhttp://www.interfax.com/newsinf.asp?id=268571

MINSK. Aug 26 (Interfax) - Sberbank of Russia (RTS: SBER) has yet to receive from the Belarusian authorities to its proposal to issue via the borrowing company, fertilizer-maker OJSC Belaruskali, a credit of $2 billion, the chief of BPS Bank (a Sberbank subsidiary in Belarus) Vasily Matyushevsky told reporters in Minsk on Thursday.

"No official answer from Belarus has yet been received," Matyushevsky said. "For the market, this is a meaningful, serious international proposal," he said.

"The proposal as to the cost of these resources is more beneficial for Belarus compared to the cost of placing Eurobonds [around 9% per annum]. This [cost of resources] is considerably better than the cost of placing Belarusian Eurobonds," the banker said.

Sberbank chief German Gref said during a meeting with Russian Prime Minister Vladimir Putin early this month that Sberbank and Deutsche Bank were going to offer Belaruskali a $2 billion credit to be secured with export contracts and 35% of the company's stock.

"Actually, the $2 billion Sberbank of Russia and Deutsche Bank credit is attractive to the government. Belaruskali assets will be collateral for the credit, considering Belarus's previously lowered sovereign rating," a source in financial circles said then.

International experts say Belaruskali has to raise outside resources fast - in the form of credits or proceeds from privatization - to refinance earlier-received credits and amid the country's ongoing currency crisis.

Moody's evaluates Belarus's need for emergency external financing at from $3 billion to $6 billion before this year ends. Minsk will also need that much money next year, the rating agency thinks.

BPS Bank ended 2010 in 59th place by assets among banks around the Commonwealth of Independent States and 3rd among 31 Belarusian banks on the Interfax-1000: CIS Banks.

Cf

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

CIS summit in Dushanbe to discuss 11 draft documentshttp://en.trend.az/regions/world/russia/1923079.html

[25.08.2011 23:06]

11 draft documents will be presented for the consideration at the CIS summit in Dushanbe in early September, the CIS Executive Committee reported.

"The session will address several issues relating to further development of cooperation in the humanitarian and security spheres," CA-News reported.

It is expected to sign an agreement to perpetuate the memory of the courage and heroism of the CIS peoples in the World War II, a program of cooperation in combating illegal migration for 2012-2014, an agreement on organizing activities on the air defense of the CIS countries with receiving information about the seizure (theft) of aircraft.

"The state heads are also planning to discuss the process of implementation of the Plan of basic measures to implement the Concept on further development of the Commonwealth of Independent States," the CIS Executive Committee said.

The CIS summit will be held in the Tajik capital on Sept. 3.

“Hraparak”: Is Putin coming Armenia? http://times.am/2011/08/26/%E2%80%9Chraparak%E2%80%9D-is-putin-coming-armenia/

By Times.am at 26 August, 2011, 10:54 am

“Andranik Nikogosyan, head of the Armenian international youth center is not only a media magnate, but also an organizer of various events” Armenian “Hraparak” (“The Square”) daily writes.

“According to our sources Russian book festival will be organized in some towns of Armenia on the second part of September. It will last nearly for ten days and library-house “Russian book” will be founded in Yerevan. It is not excluded that Russian Prime Minister Vladimir Putin will also participate in the opening of the library. So, other officials will come with him as well”, the newspaper adds.

/Times.am/

12:50 26/08/2011 » Society

Press at a glance: Will Putin visit Armenia?http://www.panorama.am/en/society/2011/08/26/hraparak/

Hraparak Daily reports that Director of the Armenian International Youth Center, Andranik Nikoghosyan is initiating Russian book festival in several cities of Armenia in mid-September.

“The festival will last around 10 days. A Russian Book Museum-Library will be founded in Yerevan. It is not ruled out that Russian Prime Minister Vladimir Putin will also attend the opening ceremony of the library,” the paper says.

Ambassador: Russian-Kyrgyz enterprise to supply fuel to U.S. air base in Manashttp://en.trend.az/regions/world/russia/1923261.html

[26.08.2011 11:39]

Russian-Kyrgyz enterprise will supply fuel to the U.S. "Manas" base, Kyrgyz Ambassador to Russia Ulukbek Chinaliyev said today in an exclusive interview with ITAR-TASS.

"A contract will be signed in September to supply jet fuel by the "Kirghiz-Russian joint venture to the Manas Transit Center", Chinaliyev said, recalling that "the U.S. base consumes a significant amount of jet fuel each year".

"According to Prime Minister Almazbek Atambayev, the typical situation of kerosene being supplied to the base through a chain of murky middlemen is a thing of the past", Chinaliyev said.

He said "the contract was coordinated between the Russian and U.S. sides in all parameters; in terms of supply as well as volume".

"Within three months, the joint venture should be able to cope with its assumed responsibilities", Chinaliyev said. "Then its supplies share can be increased to 90 percent of all jet fuel required by the base in the short-term perspective".

RT News line, August 26

Kyrgyzstan considers joining Customs Union – envoy

http://rt.com/politics/news-line/2011-08-26/#id1701312:03

All the economic parameters of Kyrgyzstan’s possible accession to the Customs Union of Russia, Belarus and Kazakhstan will be determined by the end of 2011. “The political decision had been made in principle,” Kyrgyzstan’s ambassador to Russia Ulukbek Chinaliev told Itar-Tass on Friday. The talks on accession are in a preliminary stage, and all the pluses and minuses are being discussed, both domestically and on an international level. If admitted, Kyrgyzstan will be the only member state of the Customs Union which is also a member of the WTO. The country also fears that membership in the union may hinder its trade relations with China.

AUGUST 25, 2011, 11:50 A.M. ET

Germany's Merkel Cancels Russia Trip http://online.wsj.com/article/SB10001424053111904875404576530411618467234.html?mod=googlenews_wsj

By BERND RADOWITZ

BERLIN—German Chancellor Angela Merkel has canceled a trip to Russia in early September to shepherd through passage of a change to the euro zone's bailout fund.

"The date collides with the introduction of the EFSF treaty into the Bundestag," a government official said Thursday, adding that the chancellor wants to stay in Berlin due to the importance of the issue.

When Ms. Merkel's now canceled trip to Russia on Sept. 7 and 8 had been planned, it wasn't known yet that Germany's parliament in the same week would start discussing the changes to the European Financial Stability Facility, or EFSF, the euro zone's current rescue fund.

Ms. Merkel, during a meeting Tuesday with lawmakers from her Christian Democratic Union party, or CDU, tried to bring dissenting members of parliament into line. Several CDU lawmakers said they will vote against the changes.

Euro-zone government leaders agreed July 21 to allow the EFSF to buy sovereign bonds directly in the secondary market, and earlier had decided to boost the fund's effective lending capacity to €440 billion ($634.26 billion) from about €250 billion previously.

Write to Bernd Radowitz at bernd.radowitz@dowjones.com

Russia ready to help Venezuela with weaponry purchaseshttp://en.rian.ru/mlitary_news/20110826/166188794.html

07:43 26/08/2011

MOSCOW, August 26 (RIA Novosti)

Moscow is ready to loan Venezuela $4 billion on purchases of military equipment, Russia's Kommersant newspaper said on Friday citing a diplomatic source.

"Russia is ready to loan money to Venezuela," the source said. "Considering the current election campaign in the country, this loan would mean the opportunity to support our key ally in the region."

Venezuelan Minister of Finance and Planning Jorge Giordani is expected to visit Russia in the near future to discuss the conditions of the loan with Russian officials.

Earlier reports indicated that Caracas may ask Russia for an additional $6.5 billion on the development of infrastructure in the oil-rich Latin American country.

Between 2005 and 2007 Venezuela reached deals to buy $4-billion worth of arms from Russia, including Sukhoi fighter jets, combat helicopters, and guns. Chavez' government also secured a $2.2-billion loan in 2010 to purchase Russian T-72 tanks and S-300 air defense systems.

Taking the hat off to Venezuelahttp://rt.com/politics/press/kommersant/venezuela-bank-russia-billion/en/

Published: 26 August, 2011, 06:50Edited: 26 August, 2011, 06:50

Hugo Chavez needs Russia in order to protect his country and himself

Russia continues its expansion into Latin America. Yesterday, after the end of his tour, the foreign minister, Sergey Lavrov, announced Moscow’s readiness to develop relations with the region’s countries in order to jointly confront the crisis and fight for a multi-polar world. Kommersant’s correspondent Aleksandr Gabuyev learned that the main project in this direction will be the strengthening of the Russian-Venezuelan bank, which Moscow and Caracas want to turn into an analogue of a mini-IMF. The bank’s first task may be the issue of a new $4 billion loan to Venezuela to purchase Russian weapons.

“We are considering the project of a joint bank with Russia. Its branch has already been opened in Moscow, another branch will soon be opened in Caracas and one more in Beijing,” Venezuelan President Hugo Chavez said before the talks with Sergey Lavrov, while answering Kommersant’s question.

The agreement to create a joint bank with $4 billion in charter capital on the basis of the Russian Evrofinance Mosnarbank for funding of bilateral projects was signed last year (read Kommersant’s February 16 issue). However, Kommersant has been told by two sources in the Russian delegation that in the last six months Caracas has had a number of ideas on how to turn this bank into a much more powerful instrument. “Today, we are considering the possibilities of turning the bank into an international financial organization similar to the World Bank – on a much more modest scale, of course,” a source explained to Kommersant’s interlocutor. According to another source in the Russian delegation, Hugo Chavez plans to transfer a portion of revenues from the state-owned oil company PDVSA to the Russian-Venezuelan bank. Agreements have already been made to raise the charter capital volume, which could result in redistribution of shares (Russia – 51%, Venezuela – 49%).

For now, the reference point is the Eurasian Bank of Development created by Russia and Kazakhstan, which is the primary sponsor of integration projects in the former Soviet Union. However, Mr. Chavez’s plans are a lot more ambitious. The establishment of an office in Beijing could indicate China’s possible involvement in the project. This will be the foundation for the creation of a financial institution as an alternative to Chavez’s much-despised IMF. 

The extensive plans of the leader were revealed to Russian officials for the first time. At least, according to several officials in the Russian government in charge of Latin American affairs, this is the first time they were hearing about a possible branch opening in Beijing.  

For now, however, the joint bank will deal with more modest tasks, though no less burdensome for the Russian budget. Hugo Chavez told Kommersant that in the near future Caracas intends to turn to Russia with a request for a new loan to the amount of $4 billion. According to the foreign minister, Nicolas Maduro, these funds will be used to purchase new arms from the RF (the existing portfolio of Venezuela’s weapons orders is being estimated at $6-7 billion by the deputy director general of the Center for the Analysis of Strategies and Technologies, Konstantin Makienko).

As was explained to Kommersant by Mr. Chavez, the $4 billion loan will be used to create a comprehensive defense system. “We are ready to purchase from our Russian friends the means to create an anti-ballistic defense system to protect the land and naval frontiers,” he told Kommersant. According to him, Venezuela needs the new weapons so as to avoid repeating the fate of the Muammar Gaddafi regime. 

“We have turned with this request to our Russian friends. In the coming weeks, my finance minister will head to Moscow to agree on the details,” the Venezuelan president told Kommersant. “And by the end of the year, I am hoping to travel to Russia. Just ask my friends Dmitry and Vladimir to buy me a fur hat that you wear there, because I don’t have any hair now so I’ll be cold.”

Just recently it seemed that Russia’s diplomatic offensive in Latin America, which began after the 2008 war in the Caucasus, was slowly losing ground. However, Sergey Lavrov’s three-day tour of El Salvador, Peru and Venezuela, which ended yesterday, showed Moscow’s readiness to participate in new mega-projects on the other side of the world.   

Just as before, the main driving force behind these projects continues to be Venezuelan President Hugo Chavez. And though he is currently fighting cancer and after chemotherapy has lost his famous hairstyle, the scale of the president’s thought clearly remains the same. Soon after Venezuela recognized Abkhazia and South Ossetia in 2009, Caracas managed to involve Moscow in a number of large projects. The total amount of loans which Hugo Chavez has received from Russia to purchase weapons has come close to $4 billion. Five Russian oil companies (Rosneft, Gazprom Neft, Lukoil, Surgutneftegaz, and TNK-BP) have united under the Khunin-6 project to develop the extra heavy crude oil deposits in the Orinoco basin and are ready spend $20 billion on the

project over 40 years. Meanwhile, the Russian government has signed up to build social housing in Caracas.     

Hugo Chavez does not plan to stop there. This was clearly demonstrated by his talks with Sergey Lavrov. 

Moscow, in turn, seems to have already made the decision to again loosen its purse strings for the sake of its main Latin American ally. “Russia is ready to provide an arms credit. We don’t see any problems here, because Venezuela has no outstanding debt to Russia,” a source in the Finance Ministry told Kommersant. “We understand that Chavez needs to purchase arms on credit, as he spends the petro-dollars on social programs. Considering the pre-election situation in Venezuela, for us this credit is an opportunity to really support a key ally in the region.”

RT News line, August 26

Russia to coordinate anti-drug efforts with Albania, Macedoniahttp://rt.com/politics/news-line/2011-08-26/#id17009

11:31

The head of Russia’s Federal Drug Control Service Viktor Ivanov is in Albania on Friday to discuss joint efforts in preventing drug trafficking to Europe via the Balkan route. The two sides will sign an agreement to coordinate their efforts in combating the illicit drug trade. According to some estimates, Albania’s mafia controls 75 per cent of the heroin supplies coming into Western Europe and about 50 per cent of supplies coming to the USA, Itar-Tass reports. Ivanov, who also visited Belgrade and Skopje, said that a Balkan Quintet could be organized by the end of this year to help fight drug trafficking.

MIA: Macedonia, Russia to join forces in fight against illegal drug trade http://www.focus-fen.net/index.php?id=n257882

26 August 2011 | 10:07 | FOCUS News AgencyHome / Southeast Europe and BalkansSkopje. Minister of the Interior Gordana Jankuloska and director of the Federal Drug Control Service of the Russian Federation (FSKN), Viktor Ivanov inked Thursday in Skopje an agreement for cooperation in the fight against illegal drug trade, Macedonian MIA news agency informs."Under the agreement, cooperation is to be established by sharing information and undertaking adequate law enforcement activities and measures in a bid crimes to be discovered and prevented on time. Moreover, it represents a framework for launching joint probes into crimes of suspected illegal trafficking of narcotics. The joint objective is

to intensify cooperation and to coordinate activities by sharing information in an attempt to be more efficient in combating drug trafficking," minister Jankuloska said.The document envisages exchange of experience through working meetings, conferences, workshops and trainings as well as establishment of joint teams, exchange of experts and information involving investigations.

GOOGLE TRANSLATION

http://www.itar-tass.com/c49/212209.html

11:10 26/08/2011 Interview

Afghan heroin destabilize the political situation in the Balkans - Head of Federal Drug Control Service Viktor IvanovThe head of the Federal Service for Drug Control Viktor Ivanov visited the Balkans. During his visit, decided to create a so-called "Balkan Quintet" for a more effective fight against drug trafficking, which, according to Ivanov, takes a truly fantastic proportions. Located on the border between Macedonia and Albania, the main narcotics police of the Russian Federation said in a telephone interview with ITAR-TASS on the outcome of the visit to Serbia and Macedonia, as well as scheduled meetings in Albania.

Dacic to attend completion of humanitarian demining in Paracinhttp://www.emg.rs/en/news/serbia/162695.html

26. August 2011. | 10:08

Source: Emg.rs

First Deputy Prime Minister and Minister of the Interior Ivica Dacic will attend the completion of humanitarian demining in Paracin on 26 August, at 14.00.

First Deputy Prime Minister and Minister of the Interior Ivica Dacic will attend the completion of humanitarian demining in Paracin on 26 August, at 14.00.

The demining is done by the Department for Emergency Situations of the Ministry of the Interior, the Centre for the Demining and the Russian Ministry for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters (EMERCOM).

I recognize only my own people’s trial: Mladic in long-suppressed interviewhttp://rt.com/news/mladic-interview-srebrenica-massacre-155/

Published: 25 August, 2011, 22:25Edited: 26 August, 2011, 11:57

Ratko Mladic, now at The Hague facing charges of genocide, has largely been silent since his recent arrest. Back in 1995, however, he gave a candid interview explaining his side of the Srebrenica story, which RT can now reveal.

After more than 10 years in hiding, today Mladic looks more like an ill old man than the person who was allegedly responsible for the largest mass murder in Europe since WWII.

In 1995, just one month after the Srebrenica massacre and three weeks after The Hague Tribunal pressed charges against Mladic, a Western TV crew managed to meet with the general for an interview. But despite the obviously high level of importance and the exclusivity, the interview was never aired.

The tapes remained in Bosnia and Herzegovina in private archives and only now is the conversation being released to the public after RT managed to gain access to the materials.

According to the Tribunal, the Srebrenica massacre refers to the killing of more than 8,000 Bosnian Muslims, mainly men and boys, in and around the town of Srebrenica in Bosnia and Herzegovina in 1995.

The killing was allegedly conducted by units of the Army of Republika Srpska under the command of General Mladic. In April 1993, the United Nations declared Srebrenica was a “safe area” under its protection. However the 400-strong contingent of Dutch peacekeepers failed to prevent the alleged massacre from happening.

In the interview, Ratko Mladic gave a different picture of those events: “I can tell you that in April-May 1993 an agreement on Srebrenica was signed. It clearly defined it as a safe demilitarized area where no armed military could be present except for the UN soldiers. But instead of disarming the Muslim formations, as they had committed themselves to doing under the agreement on Srebrenica singed by me and General Morillon, the United Nations forces turned those safe areas into terrorist and fundamentalist bases from where our villages and towns were attacked. Muslims from Srebrenica and Zepa burnt down more than 200 Serbian villages around those two places and killed en masse and massacred all the Serb civilian population in many other villages.”

The General also described in detail how sometimes the Bosnian Muslims were armed with the help of Iran under the supervision of the UN peacekeeping contingent.

“Sometimes, they even used helicopters to airlift weapons from Iran and other combat hardware. We knocked down one such helicopter on the outskirts of Zepa two or three months ago,” he said.

Mladic claimed that, despite knowing about the shipments of arms to the Bosnian Muslims and their alleged attacks on the civil Serb population, he held his forces back: “The Muslims attacked the enclave of Sarajevo, also a safe area, though it was not defined as such by any kind of agreements of the two parties. They massacred everybody whom they captured alive and killed several of our soldiers in the villages of Visnjica and Banja Lucica. The Muslim attack was carried out exactly from the exclusion zone on Mounts Igman and Bjelasnica, from which Republika Srpska had pulled out its forces in 1993, and which had been in confidence handed over to peacekeeping forces.”

According to the general, by that time the bubble of patience had been forced to grow for two years and at one point it finally burst.

“We retaliated with a counteroffensive in that area. We took maximum precautions to avoid casualties among civilians and representatives of the UNPROFOR, given the fact that NATO aviation was pounding air strikes on us, including civilian targets in the outskirts of Srebrenica and Zepa. We successfully finished that operation near Srebrenica and Zepa. With the help of the soldiers of the Dutch battalion, the representatives of the world community who were present in Srebrenica, and representatives of the UNPROFOR forces who were present in Zepa.”

Mladic also outlined that those who surrendered were handed over or, at the time of the interview, some were still planned to be handed over to the International Red Cross. And those who died had been buried according to Muslim traditions.

The interview moved to one of the most important aspects – the mass graves. Later, several sites with thousands of dead bodies were found in and around the Srebrenica area. These were the bodies of Bosnian Muslims who are thought to have been selectively picked and executed by Mladic’s forces from scores of refugees. In the interview, the general fiercely denies any accusation of executions having taken place.

“Only those who died in battle were buried. For hygienic reasons their bodies had to be collected and buried in appropriate places until the warring parties agreed to exchange the remains of the dead with each other,” he asserted.

Remains of 3,000 still unidentified Bosnian Muslims from Srebrenica lay in a refrigerator in Center for missing persons in Tuzla, northern Bosnia, 01 April 2003 (AFP Photo)

Given that Mladic’s story was totally different from that put forward by The Hague Tribunal and most Western media, the correspondent asked how the general felt after being branded as a war criminal.

Mladic remained calm and said he had been partially following The Hague’s case against him, but claimed he did not feel like he needed to defend himself.

“I don’t recognize any trial except the trial by my own people. I don’t need to defend myself, because these idiotic accusations have come from those centers which have been churning out lies through PR and similar organizations, creating such a chaos in these territories that the world community doesn’t know, doesn’t see or simply doesn’t want to see a way out of all this,” he insisted.

“My people have never been occupiers,” was one of the main ideas put forward and reiterated by Ratko Mladic throughout the entire conversation. The general claimed he had been strictly protecting his nation, while the West and even Iran had sent weapons and “high-quality experts” to arm his enemies.

“Unfortunately, the bad image of the Serbs and the Serbian people in general created by some media outlets has led to unequal and biased approach to the sides in conflict by part of the world community who took the side of the Croats and Muslims, who actually started this bloody war in the territory of the former Yugoslavia,” Mladic said.

Currently, prosecutors at The Hague Tribunal are thinking about dividing the process against Ratko Mladic into two parts – Srebrenica in one separate trial and other war crimes the former general is accused of in another. However it is unclear exactly what the condition Mladic’s health is. Any information on that is made public only with his prior consent. According to his relatives, he is suffering from the effects of a stroke and had several heart attacks. Recently Mladic had hernia surgery and even refers to himself as “a very sick person”. The Tribunal’s chief prosecutor, Serge Brammertz, openly stated that the defendant’s health could deteriorate, which may affect the Tribunal’s ability to complete the trial.

The full transcript of the interview with Ratko Mladic

(Yonhap Interview) Kim-Medvedev summit 'very important step' for N. Korea nuclear talks http://english.yonhapnews.co.kr/n_interview/2011/08/26/50/4801000000AEN20110826005000315F.HTML

By Kim Deok-hyun and Lee Haye-ahSEOUL, Aug. 26 (Yonhap) -- This week's rare summit between North Korean leader

Kim Jong-il and Russian President Dmitry Medvedev was a "very important step" toward resuming the long-stalled nuclear disarmament talks with the North, Moscow's top diplomat to Seoul said Friday.

   However, Ambassador Konstantin Vnukov, in an interview with Yonhap News Agency, admitted that there is a long road ahead for any resumption of the six-party talks, as North Korea must first demonstrate through action its commitment to denuclearize.

   "This summit in Ulan-Ude was a very important step in a very right direction, first of all to stabilize the situation on the (Korean) peninsula and to start calculation," Vnukov said.

   "We'll be ready to continue our job for the earliest resumption of six-party talks with all five partners and of course with North Korea," the ambassador said. "Under these circumstances, after (the) Russian-North Korean summit, there will be a lot of changing views among our (six-party) delegations."

Making his first visit to Russia this week in nearly a decade, the North's reclusive leader held the summit with Medvedev on Wednesday in the Siberian city of Ulan-Ude and reportedly expressed his willingness to rejoin the six-party talks.

   After the summit, the Kremlin said Kim agreed to consider imposing a moratorium on nuclear tests and ballistic missile launches if the multilateral talks resume.

   South Korea and the U.S. gave a cool response to Kim's reported pledge because they have demanded the North halt all of its nuclear activities and allow U.N. inspectors to verify the suspension before, not after, the six-party talks reopen.

   Vnukov said Russia agreed with the assessment by Seoul and Washington, but urged the negotiating partners to be "optimistic."

   "Some people said these achievements of the Russian side were not enough," the envoy said. "Of course, we don't have contradiction with our South Korean, American and Chinese friends within the six-party talks."

   "But we cannot agree with those people who have the principle 'all or nothing,'" he emphasized.

   "Diplomacy is a very complicated art of possibilities," Vnukov said. "We can use all possibilities to achieve the final goal, which is the denuclearization of the Korean Peninsula."

   The six-party talks on ending the North's nuclear weapons programs in return for economic and other aid have been stalled since late 2008 when Pyongyang abruptly left the discussion table.

   The North's revelation of its uranium enrichment facility, which could provide the communist regime with a new method to make atomic weapons, in addition to its known plutonium-based weapons program, has added urgency to efforts to resume the six-party talks.

   One reason why South Korea and the U.S. reacted coolly to the Kim-Medvedev summit was that there was no mention of the North's uranium enrichment program (UEP).

   Vnukov declined to confirm whether Kim and Medvedev had discussed the UEP, but added, "We also think it's a very important problem and it should be discussed."

   After his summit with Kim, Medvedev also said the two sides made progress on a years-long Russian proposal to ship large amounts of Siberian natural gas to South Korea via a pipeline to be built across North Korea.

   If realized, the project would carry huge geo-political implications on the Korean Peninsula. But prospects for the pipeline project appear dim, as many analysts worry it could be used by North Korea as leverage over the South, rather than as business for rapprochement.

   Vnukov noted that, "We should have the guarantees on the government-to-government levels between three governments -- very concrete and very certain obligations and conditions."

   Without such guarantees, he said, "It's impossible to go further because money should be protected."

   kdh@yna.co.krhague@yna.co.kr (END)

[ed] Trans-Siberia gas pipelinehttp://www.koreatimes.co.kr/www/news/opinon/2011/08/137_93558.html

NK must stop confiscation of Mt. Geumgang assets  08-26-2011 16:41

The proposal for building a trans-Siberia gas pipeline linking the two Koreas is nothing new. South Korea and Russia signed the agreement in 2008. This week, North Korea also inked the same accord. The project is economically attractive but politically infeasible.

Russian President Dmitry Medvedev and North Korean leader Kim Jong-il endorsed the project during their summit Tuesday. The accord comes three years after President Lee Myung-bak signed the deal with the Russia leader. It is meaningful that the North is proactive in the deal.

The project has been up in the air since the Kim Dae-jung administration in 1998.

The otherwise attractive economic project would go nowhere without confidence-building between the two Koreas.

The South can save transportation costs by 30 percent. The North can earn more than $100 million yearly in toll fees on the gas transit. Russia can expand sales of its gas not only to Korea but also to other countries, including Japan.

The Seoul government has linked the project to inter-Korean confidence-building. It made it clear that the project will take place only after the North's denuclearization and apologizes for military provocations, including the sinking of the Navy frigate Cheonan and the shelling of the border island of Yeonpyeong.

Seoul can leverage the project as a way of breaking the deadlock in the inter-Korean impasse. Through negotiations over the project, Koreas can improve the current frosty relations.

The time has come for the South to separate politics from the economy. The South and Russia should prod the North into guaranteeing international investment rules. The North should immediately withdraw its threat to seize the South Korean properties and tourism facilities at Mt. Geumgang.

It is absurd for any outsider to invest in the country where guarantee of investment is in question. Even under the rule of separating politics from business, this basic code should be respected. No South Korean company would participate in the project without investment guarantees.

Moscow should wait until the North stops threatening to confiscate the South’s assets at Mt. Geumgang. Another concern is the perception that the pipeline project is risky because the North could cut it suddenly. This could make the South’s gas supply unstable.

Even if the North should block the transit, the South can still import it under the current

method. Russia should secure leverage in case the North blocks exports.

Russia must seek ways of guaranteeing the unimpeded flow of its gas through the divided Koreas. It may take years before construction begins. Now is the time to start the talks, at least on the feasibility study.

The three nations can also resume talks to connect railways. China and Japan can also join in the railroad networking. The linked railroad would fuel the East Asian economy.

Russian icebreaker to help U.S. scientists in Antarctichttp://en.rian.ru/russia/20110826/166186541.html

05:16 26/08/2011

MOSCOW, August 26 (RIA Novosti)

A Russian icebreaker will assist U.S. polar explorers in escorting convoys of cargo ships with supplies for U.S. research stations in Antarctica, the U.S. National Science Foundation said.

A one-year contract on the use of the Vladimir Ignatyuk diesel icebreaker stipulates that the vessel will maintain an open water canal in the ice floe covering the McMurdo Bay to ensure timely deliveries of cargoes, especially fuel, to the McMurdo Station and the Amundsen-Scott South Pole Station.

The United States asked Russia for assistance after Sweden had announced that its Oden icebreaker could no longer render services for U.S. scientists.

The U.S. Antarctic Program, which coordinates research and the operational support for research in the Antarctic, operates three permanent polar stations in the region - McMurdo Station, Amundsen-Scott South Pole Station, and Palmer Station.

The former two rely heavily on timely supplies of about 19,000 metric tons of oil per year in order to keep the pace of their research programs.

U.S. authorities have expressed hope that they could employ the Russian icebreaker until 2014 when the U.S. Polar Star icebreaker returns to service after a long overhaul.

Icebreaker Vladimir Ignatyuk (formerly Arctic Kalvik) was built in 1982 at the Victoria Yard in Canada.

The vessel was sold to Russia's Murmansk Shipping Co. in 2003 and has experience working in the Antarctic in support of the Indian polar research program.

Turkey asks Gazprom to cut gas price

http://www.rbcnews.com/free/20110826114613.shtml

      RBC, 26.08.2011, Moscow 11:46:13.Turkey is requesting Russian natural gas giant Gazprom to lower the price of gas, RBC Daily reported today.

      Gazprom raised the price 39% during the last 29 months, Turkey's Energy Minister Taner Yildiz said. He did not rule out asking for preferences for his country.

      Meanwhile, European energy companies ENI and E.On went to court to demand a reduction of Russian gas price. Gazprom lowered gas price for Italian company Edison, according to earlier reports.

Turkey to decide future of Russian gas contract next week http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8269712

Istanbul (Platts)--24Aug2011/801 am EDT/1201 GMT

The Turkish government will next week take a decision on renewing the country's first gas import contract with Gazprom, which ended this year, a spokesman for the energy ministry told Platts Wednesday.

The contract, which was signed in February 1986 and ran for 25 years, allowed for the importation of up to 6 billion cubic meters/year of Russian gas via the purpose built Transbalkan gas pipeline which connects the main export line running south through Ukraine and Moldova to Romania, with Turkey via Bulgaria.

Imports through the line began in 1987.

The spokesman confirmed that two options were being discussed. The first would involve state-owned gas importer and pipeline operator Botas holding a tender for transferring the right to import gas through the line to the private sector and the second seeing a tender held directly by the state through another state body.

"Most likely the first option will be adopted," the spokesman said.

The terms of the existing contract allow for gas to continue to be supplied on the existing terms for a further five years unless either side calls for the contract to be ended.

Previous volume transfer tenders held by Botas have involved offering private-sector companies the right to bid competitively for blocks of 250 million cu m/year of existing contracts. However, to date only 4 Bcm/year of volume from Botas' import portfolio of 51.8 Bcm/year have been successfully transferred. That 4 Bcm/year forms part of Turkey's second import contract with Gazprom for 8 Bcm/year signed in February 1998 and supplied through a second Transbalkan pipeline constructed parallel to the first line, with the transfers concluded following successful negotiations between the four winning bidders and Gazprom.

Two subsequent tenders held by Botas offering further volumes from this and its other import contracts attracted no bids.

Gazprom is reported to have indicated that does not oppose the 6 Bcm/year contract being renewed by one or more private-sector companies.

However, the company last month announced that it did oppose a volume transfer tender opened by Botas in May offering 24 blocks of 250 million cu m/year each from Turkey's third gas import contract with Russia for 16 Bcm/year via the Blue Stream pipeline, under a contract signed in 1997, and through which supply began in 2005.

Turkish officials have confirmed that Gazprom's objections to the sale stem from the fact that the gas supply contract was signed on the basis of an international agreement between Russia, Turkey and Italy for the construction of the Blue Stream pipeline and that the terms of the supply contract cannot be altered without the international agreement being amended first to allow such changes.

--David O'Byrne, newsdesk@platts.com

Decision on Belene nuclear project unlikely before autumn - Econ Minhttp://www.sofiaecho.com/2011/08/25/1145054_decision-on-belene-nuclear-project-unlikely-before-autumn-econ-min

Thu, Aug 25 2011 21:29 CET

by Dnevnik.bg Discussions about Bulgaria's Belene nuclear power station are proceeding at a good pace but no decision would be made before the October 23 elections, Economy and Energy Minister Traicho Traikov told Bulgarian National Television (BNT) on August 25.

The statement came after a series of meetings between Bulgaria's national electric utility NEK and Russian Atomstroyexport, a unit of state-run Rosatom, which is the main contractor on the Belene nuke project.

"The final decision cannot come before the elections for a number of reasons, one being the fact that nuclear facilities safety criteria will be released in late 2011 at the earliest," Traikov said.

He said that Bulgaria had been invited to sign a 14th annex in a row to the contract with Atomstroyexport, but it was not essential since both sides would naturally extend the deal's term after its expiry if they deemed it beneficial.

The legal dispute between NEK and Atomstroyexport does not necessarily mean dumping the project but could hike its price and implementation risk, he said.

"When negotiations cannot solve disagreements between parties involved, they bring the issue to court and use legal mechanisms set in the contracts. This is happening just now. It does not mean the project is lost but that costs and risks would be definitely higher as both investors, contractors and assignors now add a risk premium, " Traikov said.

It emerged in late July that Atomstroyexport would lodge a 58-million euro claim against Bulgaria in a Paris arbitration court. The Russian company is suing Bulgaria for work it has done but has not been paid for. NEK said it would file a counter-claim for 61 million euro in an arbitration court in Geneva for contracted but unpaid old equipment on the Belene site.

NEK is currently working on its defence in the Paris court and putting final touches to its Geneva claim, Traikov said.

Bulgaria, Russia go to court over Belene nuclear projecthttp://www.bne.eu/dispatch_text16427

bneAugust 26, 2011

A tug of war between Sofia and Moscow over Russia's controversial Belene nuclear power plant project in Bulgaria intensified in August with both sides bracing for a protracted legal battle.

Two months ahead of the October 23 presidential and local elections in Bulgaria, in which Belene is likely to become again a hot topic in the wider context of the country's energy dependence on Russia, there are no simple answers to the two bottom-line questions asked ever since the Soviet-era project was resurrected five years ago: does Bulgaria really need the plant and, if it does, what price can the poorest member of the EU afford to pay for it?

The project for the construction of a 2,000-megawatt (MW) nuclear power station in Belene, on the Danube River, hit yet another snag on August 16 when Russia's Atomstroyexport, which Bulgaria has hired to build the plant, failed to meet the deadline for dropping its €58m claim against the Balkan country's state-run National Electricitry Company (NEC) it filed earlier, thus opening the way for NEC to lodge its own claim of some €61m against Atomstroyexport.

In its claim filed with the International Court of Arbitration of the International Chamber of Commerce in Paris, the Russian company said the Bulgarian side owes it the money for the preparation works it has completed at the construction site since signing the Belene deal with NEC in 2006. State-run NEC in turn said it will go to an arbitration court in Geneva in September to seek compensation for Atomstroyexport's failure to buy back some of the old equipment stored in Belene since 1991 that cannot be incorporated in the project. The purchase of the unnecessary equipment is specified in the framework agreement the two companies concluded in 2007 as part of their deal. "We are ready to propose and discuss various options regarding this equipment only in the context of realisation of the main contract," Atomstroyexport's first vice-president, Vladimir Savushkin said in a press release posted on the company's website on August 10.

Prodding Bulgaria to move faster on the project, he added that Atomstroyexport had no reason to buy back old equipment from Belene any more because the framework agreement had expired, while no final engineering, procurement and construction (EPC) contract has been signed yet.

NEC disagreed by saying in a statement on its website on August 18 that the purchase of the old equipment is one of the reasons why Atomstroyexport, a unit of Russia's Rosatom, had been chosen to build the power plant, and vowed to safeguard Bulgaria's interests in court. NEC added that Atomstroyexport's claim could not only harm the relationship betwen the two sides but the Belene project as a whole as well and in this context the withdrawal of Atomstroyexport's claim would have proved that the Russian partner was interested in the implementation of the project.

On-off project

Launched in the 1980s, the project for the construction of Bulgaria's second nuclear power plant was frozen in the 1990s due to a lack of funding. Bulgaria and Russia agreed in 2006 to restart it, but price disputes, the lack of strategic investors, the global economic crisis of the last few years and uncertainty surrounding the future plant's seismic safety

have delayed the start of construction works. With the initial project cost estimated at €3.9bn, Russia has recently put a price tag of €6.3bn, while Bulgaria, which has hired UK-based banking groupHSBC to advise it on the financial structure of the project and the setting up of a project company, has said it would not accept a price in excess of €5bn.

The project's supporters say the planned two reactors of 1,000 MW each in Belene will help Bulgaria restore its dominant position on the electricityexports market in the Balkans, which it lost with the closure of four Soviet-made reactors of 440 MW each at its sole Kozloduy nuclear power plant prior to its accession to the EU in 2007. The closure, meant to dispel EU's nuclear safety fears, left Kozloduy with two operating Soviet-made reactors of 1,000 MW each. Their original lifespan will expire in 2017 and 2019, respectively.

Opponents of the Belene project say there is no firm evidence that demand for Bulgarian-generated electricity in Southeast Europe will rise in the foreseeable future and it is unclear what the price of the electricity from Belene will be. They also say that Belene will deepen Bulgaria's energy dependence on Russia even further and voice concerns about the safety of Russian-made nuclear reactors. Calls from Bulgarian lobby groups and environmentalists to scrap the project have increased since the March accident at Japan's Fukushime nuclear power plant, but Belene supporters say Bulgaria would have to pay around €1bn in compensation to Russia if it walks out of the project.

NEC's head Mihail Andonov struck a conciliatory note in the dispute with Atomstroyexport on August 19, telling Bulgarian National Radio (BNR): "The negotiation process can continue; even though the Russian side has filed a claim and the Bulgarian side also will file a claim, I think this cannot harm the project at the current stage. This, however, will lead to more cautious and more precise actions from both sides and uncertainty of the information they will exchange."

According to Andonov, Atomstroyexport still has an option to drop its claim against NEC by October 15 - the deadline by which Bulgaria should state its objections to the claim before the arbitration court in Paris. If the project is to progress to the actual construction phase, it should be transparent with regard to the cost of financing and the financial results it aims to achieve, added Andonov.

Former Bulgarian ambassador in Russia Ilian Vasilev sounded more pessimistic when he said it is only a matter of time before Bulgaria and Russia decide to cancel the Belene project which he sees as economically unviable, especially after the Fukushima nuclear accident. He told BNR on August 12 that additional nuclear safety requirements called for by the accident in Japan will inevitably make global standards for building and operating nuclear power plants tougher which in turn will increase the project cost.

10:45 26/08/2011ALL NEWS

Monument to Soviet Army desecrated in Bulgarian capital

http://www.itar-tass.com/en/c154/212198.html

SOFIA, August 26 (Itar-Tass) — The monument to the Soviet Army in central Sofia has been once again desecrated, sources from the Russian Embassy to Bulgaria told Tass on Friday.

This time, vandals have painted out the inscription “To the Soviet Army Liberator from Bulgarian People,” the sources said.

The Russian Embassy sent a note to the Bulgarian authorities, stressing that the agreement on friendly relations and cooperation between the Russian Federation and Bulgaria and other bilateral documents oblige the Bulgarian side to take necessary measures to protect and take care of monuments.

The Embassy has asked the Bulgarian authorities to take all necessary measures to find and punish those who have desecrated the monument, rub the paint off and install a system of video control over the territory where the monument is situated.

This is not the first time that the monument has been desecrated. On the eve of Victory Day, representatives of Bulgarian public organisations, school students and Russian diplomats removed all insulting inscriptions and Nazi symbols from the monument.

However, in June graffiti was sprayed on one of the bas-reliefs, and sculptures of liberators were turned into American movie heroes – Superman, Santa Claus, clown Ronald – mascot of the McDonald fast-food restaurant chain and other characters.

The monument was cleared of graffiti, but vandals were not found.

Indonesia receives six MI 17 helicopters from Russiahttp://news.xinhuanet.com/english2010/world/2011-08/26/c_131077099.htm

2011-08-26 15:29:33

JAKARTA, Aug. 26 (Xinhua) -- The Indonesian military has received six more Russian made helicopters MI 17, expecting another six more. This would make it operate a total of 18 of the multipurpose helicopters, a minister said here on Friday.

Indonesia had already operated six of this kind of helicopter that came in last year. Besides MI 17, Indonesia also operates five MI 35 anti-insurgent attack helicopters.

The new MI 17 helicopters were handed over by the Russian helicopter broker agency Rosoboronexport to the Indonesian government, witnessed by Defense Minister Purnomo Yusgiantoro.

The procurement of the MI 17 helicopter was based on the dire need of the Indonesian army on helicopters that are capable to transport troops and logistics to battle locations. Due to its characteristics, the MI 17 fulfills the Indonesian army's expectation.

"With thousands of islands in its territory and not much airstrip, helicopter is the most suitable solution to respond to both traditional and non-traditional threats faced by the government," Purnomo said here, referring to separatists and disaster threats that frequently occur in several parts of the country.

The procurement on the 18 MI 17 helicopters was the first deal that has been conducted after Indonesia ceased armament procurement since 1997. It was done under a soft loan scheme provided by the Russian government.

Purnomo said that Indonesia is now allocated with 56 million U.S. dollars to procure military equipment.

PRESS DIGEST - Vietnam newspapers - Aug 26

http://in.reuters.com/article/2011/08/26/vietnam-press-idINL4E7JQ0GR20110826

THOI BAO KINH TE VIETNAM

-- Trade value between Vietnam and Russia in the first half of 2011 rose 40 percent from the same period last year to roughly $1.3 billion, Russian customs said. (Reporting by Hanoi Newsroom)

GOOGLE TRANSLATION

http://bsanna-news.ukrinform.ua/newsitem.php?id=16931&lang=en

2011-08-26 GHN

Georgia has reduced the import of grain from RussiaTBILISI, August 26. (GHN). During January-July, Georgia has exported products to Russia for a total cost of 22,615,200 GEL, while imports from Russia amounted to

177.5887 million dollars, the «GHN».According to "Sakstata" a large share of exports to Russia account for electricity - in 2011 this figure amounted to 11,661,800 dollars, although this is less than the previous year, when electricity was exported to the amount of 17,761,300 dollars.The second line in the exports take cars - 3111400 dollars in the first seven months of 2011.The list of export products as well hit, fruit porridge, clay materials, the concentrate of magnesium, medications, tanks, tanks, heaters and other products.As regards imports from Russia, a large proportion of accounts for gas, the total amount of 37,418,800 dollars, oil - 19,882,900, 10,479,200 and electricity.A large proportion of falls on the grain, although this figure dropped significantly compared with the figure for last year's period, and amounted to 14.9206 million, while last year the figure for the same period amounted to 48,860,800 dollars.From Russia to Georgia as imported fish, dairy products, tea and flavors, and many other products, including the same glands and other organs for organo-therapeutic, the blood of humans and animals.

August 25, 2011 21:56

Georgian lawmakers declare Abkhaz presidential elections illegitimate before they are heldhttp://www.interfax.com/newsinf.asp?id=268533

TBILISI. Aug 25 (Interfax) - The Abkhaz early presidential elections set for August 26 must not be recognized as legitimate, Georgian lawmakers said.

"It is absolutely not important who will win in separatist Abkhazia. The so-called elections are illegitimate," Chairman of the Georgian Parliamentary Committee for Defense and Security Givi Targamadze told the media on Thursday.

Sergei Shamba will win, he said, as he is being actively supported by Russia.

Parliamentary Vice Speaker Paata Davitaya agrees that the Abkhaz elections cannot be deemed legitimate, as Abkhazia's independence has been de-facto recognized only by Russia.

"The rest of the world community sees Abkhazia as a region of Georgia, occupied by Russia," Davitaya told reporters on Thursday.

Chairman of the parliamentary commission for the restoration of Georgia's territorial integrity Shota Malashkhia told journalists that the Abkhaz presidential elections are a "farce, played by Russia."

"Whoever becomes so-called president of Abkhazia, nothing will change in reality, as he will remain a puppet in Russia's hands," he said.

Early presidential elections will be held Abkhazia after the death of its president Sergei Bagapsh. The registered presidential candidates are acting President Alexander Ankvab, Prime Minister Sergei Shamba and leader of the opposition People's Unity Forum Raul Khadzhimba.

sd eb

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

Rebel Abkhazia elects its third leaderhttp://www.google.com/hostednews/afp/article/ALeqM5j4PN9izeUV2XmkjzeGuDqwMXldnA?docId=CNG.beb28d59410269b2326ae5ba2e5f2575.11

By Indira Bartsits (AFP) – 5 hours ago

SUKHUMI, Georgia — Voters in rebel Abkhazia went to the polls Friday to elect a third leader in the tumultuous period since it broke from Georgia in the 1990s in a move recognised only by Moscow and a handful of states.

The snap elections follow the death of its veteran president Sergei Bagapsh after lung surgery earlier this year and will be viewed as illegitimate by most of the world.

Three contenders are competing for the top post in the rebel region which besides Moscow was only recognized by Venezuela, Nicaragua and the tiny Pacific island state of Nauru, much to the Kremlin's chagrin.

Polls opened at around 0400 GMT with a small but steady stream of voters heading to the ballot box in early morning voting and no immediate signs of disturbances, an AFP correspondent reported.

Symbolically, the vote coincides with the third anniversary of Moscow's recognition of Abkhazia and South Ossetia as independent states, which followed Russia's five-day war with Georgia in 2008.

Moscow has stationed thousands of troops in the rebel region -- a lush sun-drenched coastal strip of land wedged between the Black Sea and the Caucasus Mountains -- in a move Georgia describes as occupation.

After Abkhazia's previous president, the 62-year-old Bagapsh, died in a Moscow hospital in May following lung surgery, his prime minister Sergei Shamba is seeking to take over his job.

Two challengers -- vice-president Alexander Ankvab and opposition leader Raul Khajimba -- are taking him on in the polls that are unlikely to signal a major shift in policies or put an end to Abkhazia's isolation.

Despite their differences, all three candidates are Kremlin-friendly and strongly opposed to reunification with Georgia.

None is considered an outright front-runner for the job of Abkhazia's third president.

Bagapsh's predecessor and Abkhazia's first leader Vladislav Ardzinba, who led the region into civil war with Tbilisi and then de-facto independence, ruled over the region between 1994 and 2005. He died in Moscow last year.

Abkhazia last voted in presidential polls when it re-elected the late Bagapsh in December 2009.

"Unlike the previous election, which saw various personalities representing different forces clash, today we speak of the country's internal evolution," said Andrei Ryabov, an analyst with the Carnegie Moscow Center.

"No matter what the result is, Russia will not lose," he said.

Abkhaz separatists waged a civil war with Georgia in the 1990s after the break-up of the Soviet Union that killed several thousand people and left 250,000, mostly ethnic Georgians, as refugees.

Since Moscow's declaration of its independence, Abkhazia has been boosted by significant Russian aid and visits by large numbers of Russian tourists. But its economy remains stricken by the lack of international recognition.

The Pacific Ocean archipelago of Vanuatu became caught up in a diplomatic dispute earlier this year when it moved to recognize Abkhazia, only to quickly deny it had ever happened.

Copyright © 2011 AFP. All rights reserved. More »

Abkhazia set to elect new presidenthttp://en.rian.ru/world/20110826/166182059.html

00:55 26/08/2011

SUKHUMI, August 26 (RIA Novosti)

The former Georgian republic of Abkhazia will go to the polls to elect a new president on Friday, following the death of President Sergei Bagapsh in May.

Over 140,000 voters will choose between three candidates - acting president Alexander Ankvab, Prime Minister Sergei Shamba and chairman of a prominent oppositional political party, The Forum of the National Unity of Abkhazia, Raul Khajimba.

Experts believe that Ankvab and Shamba have equal chances to either win the presidential race in the first round or go to the second round if they do not receive over 50 percent of the votes necessary to win in the first.

The preliminary results of the Friday vote could be announces as early as on August 28. The second round, if necessary, will be held in two weeks.

Over 100 observers from 18 countries and the Unrepresented Nations and Peoples Organization will attend the elections despite the fact that the breakaway republic has been recognized only by Russia, Nicaragua, Venezuela and the tiny Pacific island nations of Nauru and Vanuatu.

Abkhazia and another Georgian breakaway republic, South Ossetia, were recognized by Russia as independent states in 2008 following a five-day war, which started when Georgia attacked South Ossetia in an attempt to bring it back under central control.

Georgia, which still considers the two regions part of its sovereign territory, has repeatedly stated that any elections in Abkhazia or South Ossetia would be illegitimate and would never be recognized by the international community.

01:00 26/08/2011Top News

Abkhazia to hold early presidential election

http://www.itar-tass.com/en/c32/211991.html

SUKHUM, August 25 (Itar-Tass) —— Abkhazia’s early presidential election will take place on Friday. Each of the three candidates, Alexander Ankvab, Raul Khadzhinba and Sergei Shamba, is sure he will be the winner.

All the candidates are not newcomers in politics, they have been high-ranking officials.

The United Abkhazia Party, the Amtsakhara social organisation uniting veterans of World War II, and the Foundation for Abkhazia’s development support the candidature of Alexander Ankvab.

Opposing Forum of the National Unity of Abkhazia, the Akhyatsa social organisation, the organisation of veterans of the Georgia-Abkhazia war, the Kosaks Union support Raul Khadzhimba.

The Communist Party, the Party of the Economic Development and the Association of Youth Organisations of Abkhazia support the candidature of Sergei Shamba.

Candidates for premiership are Head of the Gulripshi Region Mikhail Logua, Political scientist Svetlana Szhergeniya, widow of Abkhazia’s first President Vladislav Ardzinba, Deputy Head of the State Committee on Youth and Sports Shamil Adzynba.

According to the country’s legislation, a president should have Abkhazia’s citizenship, know the state language, should be between 35 and 65, having a right to vote, living in the country at least for five years before the election. The presidential term is five years. The president is elected if receives over 50 percent of votes.

Abkhazia’s Central Elections Commission may consider election invalid if less than half of all registered electors participate in it.

The republic’s 35 districts have organised 172 election stations, including two outside the country – in Moscow and Cherkessk. All stations will open at 08:00 Moscow time and will be open till 20:00 Moscow time.

Every voter should have a national passport, and a special stamp will be put in a passport to avoid double voting.

Observers from over 100 countries have come to view the election in Abkhazia. They include representatives of Russia, Venezuela, Nauru, the Dominican Republic, Armenia, Latvia, Germany, Austria, France, Belgium.

The presidential election coincides with an important day in Abkhazia’s history – the third anniversary of the Russian Federation’s recognition of the republic’s independence. Abkhazia’s Acting Head Nugzar Ashuba said that “Russia, having undertaken the correct and brave step, was the first to recognise Abkhazia’s independence. We are very proud and happy that this decision was followed by other countries – Nicaragua, Venezuela, Nauru and Vanuatu, despite the colossal pressure they experienced from the USA and European countries.”

“Representatives of Venezuela and Nauru have crossed thousands kilometres to observe the election in Abkhazia,” he stressed.

Over 80 journalists from 35 leading international media have come to Abkhazia to report the presidential election.

01:49 26/08/2011ALL NEWS

Abkhazia residents in Russia may vote in Moscow, Cherkessk

http://www.itar-tass.com/en/c154/212008.html

MOSCOW, August 26 (Itar-Tass) —— Abkhazian residents in Russia may vote in Moscow and Cherkessk at the upcoming presidential election.

Two polling stations will be set up in the Russian territory: No.4 in Moscow and No.5 in Cherkessk, Abkhazian Ambassador to Russia Igor Akhba said at a news conference here on Tuesday.

“The early presidential election will be held on August 26. This is a festive day for us, since this date is connected with the recognition of our independence by Russia,” the ambassador said. According to Akhba, in compliance with Abkhazian legislation, the diplomatic mission is charged with holding elections outside the country’s territory.

“The commission will consist of 15 people in Moscow, mostly the embassy’s staff members and in Cherkessk – 12 people,” Akhba informed. “We have taken all measures for the commission’s normal work so that citizens could express their political will.”

The ambassador emphasised at the same time that one can vote only by showing the Abkhazian domestic passport (green colour). Then, a citizen receives a stamp in a document and will be put on the list. As for security, the ambassador said that 20 officers of the Abkhazian Interior Ministry would be present in Moscow, while Russian law enforcers will stand around the polling station.

Meanwhile, Akhba hopes for a higher turnout in Moscow as against the previous presidential elections.

In turn, chairman of polling station No. 4 Oleg Bartsits noted that citizens might vote from 08.00 in the morning till 20.00 in the evening. At the same time, he noted in connection with novelties in legislation that three observers from each candidate would be present at each polling station. “The main principle of the Central Election Commission’s work is openness and transparency,” Bartsits emphasised. “We are interested that nobody would have doubts in objectivity of holding the elections.”

According to the latest data, 168,000 Abkhazian residents received the domestic republican passports. Incidentally, 90 percent of them have also Russian citizenship. Some 1,400 people voted in Moscow at the past elections of the Abkhazian president.

The early presidential election was caused by unexpected death on May 29 of Abkhazia’s Head Sergei Bagapsh. Three candidates, Alexander Ankvab, Raul Khadzhinba and Sergei Shamba aspire presidency.

Moscow hopes that the election “will be in a quiet democratic atmosphere,” spokesman of Russia's Foreign Ministry Alexander Lukashevich said on Thursday.

Russia's representatives of the Central Elections Commission and of the Federal Council will observe the election, he said.

“Whatever choice Abkhazia’s people make, it will be for the benefit of further development of friendly relations with Russia,” Lukasevich said. “We have a solid base of the Agreement on friendship, cooperation and mutual assistance between Russia and Abkhazia, and the long history of bilateral relations,” he said.

South Ossetia's administrative border with Georgia closed for 24 hourshttp://en.trend.az/regions/scaucasus/georgia/1923229.html

[26.08.2011 10:49]

Georgia , Tbilisi, Aug. 26 / Trend N. Kirtzkhalia /

The administrative border of South Ossetia and Georgia was closed on the night of Aug. 26, based on a decision by the State Security Committee of the Separatist Republic .

"The Mosabruni , Artsevi, and Sinagur border checkpoints along South Ossetia’s administrative border with Georgia were closed for 24 hours in connection with celebrations, to ensure safety during the third anniversary of Russia 's recognition of South Ossetia’s independence, as well as to avoid aggravating the border situation", the Committee reported.

The Committee noted that corresponding instructions were also transferred to the Russian FSB Border Protection in the breakaway republic of South Ossetia.

Military actions were launched in the, at the time, unrecognized Republic of South Ossetia in August 2008. Georgian troops entered Tskhinvali, the capital of South Ossetia. Russian troops later occupied the city and drove Georgia’s military back to Georgia. Russia recognized the independence of Abkhazia and South Ossetia on Aug. 26 and established diplomatic relations with both republics on Sept. 9, 2008.

Do you have any feedback? Contact our journalist at trend@trend.az

 

Russia postpones upcoming Soyuz rocket launchhttp://www.thepeninsulaqatar.com/international/162690-russia-postpones-upcoming-soyuz-rocket-launch.html

Friday, 26 August 2011 02:40

MOSCOW: Russia has postponed the next blast-off of its Soyuz rocket until September after a freighter carried by the flagship launch vehicle crashed into Earth, the space forces commander said yesterday.

A Soyuz-2 rocket was to have launched a Russian GLONASS navigation satellite this week from the Plesetsk cosmodrome to help create a system Russia hopes will rival the US GPS.

“The launch has been postponed until the first half of September,” Lieutenant General Oleg Ostapenko was quoted as saying by Russian news agencies. “The decision has been taken to remove the rocket from the launch pad.”

He said that the rocket will be subjected to a thorough test of all its component parts once it is removed and that the September launch date was not final.

His remarks are in line with a review by the Russian space agency Roskosmos of all its rockets and also confirm comments by an unnamed space official earlier to Russian media that the Soyuz rockets have been grounded pending the probe.

Ostapenko insisted that the delay would not hurt the GLONASS system, already hurt by the loss of three satellites after a launch failure in December.

“We decided not to hurry and not to put pressure. If we launch it one month later, it’s no big deal,” he said.

AFP

August 26, 2011 09:57

Progress freighter loss will cost ISS partners some $100 Mlnhttp://www.interfax.com/newsinf.asp?id=268544

MOSCOW. Aug 26 (Interfax-AVN) - The participants in the International Space Station (ISS) program stand to lose more than $100 million following the failed launch of the Progress M-12M cargo carrier, with Russia bearing the brunt of the damage, a Russian space exploration industry source told Interfax-AVN.

"The Russian side has been providing launch vehicles and spacecraft to deliver crews and cargo to the ISS. This is Russia's contribution to the ISS program. Since the launch of the Soyuz-U rocket carrying the Progress M-12M cargo ship achieved no result this time, the budget will lose around $100 million," he said.

This sum includes the cost of the launch vehicle, the Progress freighter and launch services, as well as the cost of rocket fuel and other components, he said.

The Progress M-12M was supposed to deliver more than 2.5 tonnes of different supplies to the orbiting outpost, including equipment, fuel, oxygen, drinking water, food and hygiene items, the source said.

"In particular, the Progress M-12M freighter was carrying 367 kilograms of cargo intended for the American segment of the ISS. NASA paid for it approximately $5,000 per kilogram delivered to the orbit," he said.

However, the cost of using Russian Soyuz launch vehicles and Progress freighters to resupply the station is far lower than the cost of U.S. space shuttle flights, he said, adding that prior to the retirement of the U.S. space shuttle, its two-week mission had cost some $500 million.

The ISS program involves Russia, the U.S., the European Space Agency, Canada and Japan.

tm

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

Siberian illnesses ‘not linked’ to spacecraft crashhttp://en.rian.ru/russia/20110826/166191068.html

09:38 26/08/2011

GORNO-ALTAISK, August 26 (RIA Novosti)

The headaches reported by residents of a south Siberian village are not linked to the fragments of a space freighter that may have crashed in the area, a spokesman for the Roscosmos space agency said on Friday.

Ten people have complained of headaches, increased blood pressure and sore throats since the Progress M-12M space freighter fell to earth in the region after failing to separate from the Soyuz-U carrier rocket on Wednesday, a doctor at a hospital in the Karakosh village told RIA Novosti.

The fragments have yet to be found. The freighter was also carrying toxic heptyl fuel, although experts say it would have burnt up in the atmosphere. Russian medical officials have also said no trace of the fuel has been discovered.

‘If people really had been poisoned with some toxic matter, then a lot more people would have requested medical help, and their symptoms would have been a lot more serious,” the Roscosmos spokesman said.

He also suggested that “hypertension” was to blame for the reports of people feeling unwell, saying that “it’s a medically established fact that overly impressionable people with rich imaginations can feel physically unwell when influenced by their emotions.”

Fragments from Russian rockets launched from the Baikonur space centre in nearby Kazakhstan have been falling on the Altai Republic for decades. Experts estimate that some 2.5 tons of space waste have fallen on the republic in total.

In February 2008, shortly after the launch of a Proton-M rocket, a 3.5m-long rocket fragment landed a few meters from a hut belonging to an Altai shepherd. He subsequently appealed to the Russian authorities for compensation. His claim was dismissed, however, by Roscosmos, the Russian space agency that rents Baikonur.

Many locals have said that they have experienced health problems after rocket fragments have fallen near their homes. Shepherds have also claimed that their animals have become sick. Roscosmos has repeatedly stated that no toxic traces have been found in areas where rocket fragments have fallen.

After the retirement of the U.S. shuttle fleet earlier this summer, Russian Soyuz craft became the only way for astronauts to reach the ISS until at least the middle of the decade. NASA is paying its Russian counterpart Roscosmos more than $1 billion for crew transport services over the next four years.

The Soyuz-U carrier rocket blasted off from the Baikonur Space Center in Kazakhstan and was scheduled to separate at 5:09 p.m. Moscow time [13:09 GMT]. The source said the engine failure made it impossible for the spacecraft to achieve the required orbital velocity.

10:49 26/08/2011ALL NEWS

Boeing with 186 passengers makes emergency landing in Novosibirsk

http://www.itar-tass.com/en/c154/212232.html

KRASNOYARSK, August 26 (Itar-Tass) —— A Boeing-757 with 186 passengers and eight crew aboard has made an emergency landing in Novosibirsk, a source at the West Siberian Transport Prosecutor's Office told Itar-Tass on Friday.

At about 07:00 local time (04:00 Moscow time), after the takeoff of the North Wind airline Boeing-757, which was on a flight from Tolmachyovo to Sharm el Sheikh, the flaps of the airliner were not retracted symmetrically. After flying to run out of its fuel, the Boeing landed safely at Tolmachyovo airport.

Nobody was hurt in the incident. The airliner was not damaged.

The Novosibirsk Transport Prosecutor's Office has launched an inquiry into the incident.

 

05:36 26/08/2011ALL NEWS

Court to decide on arrest of organiser of Politkovskaya's murder

http://www.itar-tass.com/en/c154/212056.html

MOSCOW, August 26 (Itar-Tass) —— Moscow’s Basmanny Court on Thursday will consider arrest of the alleged organiser of the murder of Novaya Gazeta reporter Anna Politkovskaya - a retired police Lieutenant-Colonel Dmitry Pavlyuchenkov, who is suspected of organising the assassination of observer of the Novaya Gazeta newspaper Anna Politkovskaya.

At the previous hearing, Judge Artur Karpov extended his custody by 72 hours so that the defence could collect necessary proofs. The judge stated that the “detention was legal” and complied with all requirements of the procedures.

A defense lawyer of Dmitry Pavlyuchenkov, Tamara Kuchma, told reporters that he has information on the crime instigator.

However, according to Kuchma, some interested people make him conceal this information.

“I cannot speak about an instigator, but he (Pavlyuchenkov) was warned that he should keep mum, since he had served 14 years at the Russian Interior Ministry,” the defense lawyer said, noting that threats were received “from some interested people”.

According to Kuchma, Pavlyuchenkov was attacked twice. “He was attacked, suffering grievous bodily injuries. That was the first warning, while the second – a constant pressure on him,” the lawyer explained, noting that following this, Pavlyuchenkov had become an invalid, second group. Following this, he retired from the Interior Ministry.

“We believe that those were instigators and relatives of other defendants,” Kuchma continued.

She also noted that the investigation plans to call to responsibility on this case some other persons. However, the lawyer did not specify whom she means.

Earlier in the day, the lawyer said that her client flatly denied his complicity in the crime. According to Kuchma, he is still in the status of a suspect: “no accusations were slapped on him”.

Moscow’s Basmanny Court examines the question on Thursday on Pavlyuchenkov’s arrest. His defense requested to shift on hearings by 72 hours to collect necessary evidence. The court now went to the deliberation room for decision-making.

The former ranking police officer of the Moscow Police Department was detained on August 23 during an interrogation. Spokesman of the Russian Investigative Committee Vladimir Markin said earlier that “the investigation established that Pavlyuchenkov received a contract for cash remuneration to engineer Politkovskaya’s assassination and formed a criminal group, including three Makhmudov brothers and other people”.

Then, Pavlyuchenkov, the head of a section of the Moscow Police Department, responsible for outside surveillance, instructed his subordinates to shadow the woman journalist so as to find out routes and time of her daily trips around the city.

“Later, Pavlyuchenkov obtained weapons, worked out a plan and determined a role for each subordinate in preparing and committing the murder,” the spokesman said. “Information, received by Pavlyuchenkov, and a gun for the murder were handed over directly to executor Rustam Makhmudov and his associates who followed movements by Anna Politkovskaya several days before the crime.”

Markin said “the investigation has also information of a supposed crime instigator”. “However, the investigation believes it premature to divulge this information,” he emphasized. At the same time, deputy editor-in-chief of the Novaya Gazeta newspaper

Sergei Sokolov told Tass that “this is only a version” and added that Novaya Gazeta “has its own versions”.

Novaya Gazeta observer was killed on October 7, 2006 at the house elevator in the Lesnaya Street when she was coming to her flat. Five shots were made at the reporter. The investigation regards Politkovskaya’a professional activities as the main version of the crime.

Former police officer Sergei Khadzhikurbanov and brothers Dhzabrail and Ibragim Makhmudovs were charged with complicity in the assassination. The case against Rustam Makhmudov, accused of the direct execution of the murder is tried separately. He was on the Wanted List since 1997. He was nabbed in Chechnya at the house of his relatives last May 31. To track down the whereabouts of the accused was possible thanks to cooperation with law enforcement bodies of Belgium where he had escaped and then returned to Chechnya.

The case on Politkovskaya’s murder was already heard in court. On February 20, 2009, the Moscow district military court acquitted the three defendants on the basis of a jury verdict. On June 25 the Russian Supreme Court repealed this sentence and sent the case for new examination.

However, the case was returned for additional investigation at the request of the state prosecution and representatives of the aggrieved party to combine it with the main one – with regard to the executor and a supposed instigator. The time of investigation on the case was again extended last February.

The Investigative Committee reported last October that “other people, who can be implicated in committing the murder, have been established”. For instance international requests were sent to some European countries to render legal aid.

 

02:32 26/08/2011ALL NEWS

Explosion in NW of Moscow – hooliganism, no victims - police

http://www.itar-tass.com/en/c154/212024.html

MOSCOW, August 26 (Itar-Tass) —— Among the versions about the explosion, which went off near the Investigative Department of the North-West District’s police, the main one is that it is hooliganism, a source at law enforcement authorities told Itar-Tass on Friday.

“The police study all the circumstances of the incident, and the main version is hooliganism,” the source said. “As yet, there is no information regarding victims.”

The explosion went off near 6/1 Marshal Konev Street, not far from the Investigative Department of the police of the North-Western Administrative District.

“The explosion has broken out some windows,” the source said.

The police are working at the site.

“According to preliminary information, an explosive device went off near the Investigative Department,” the source said.

Over the past month and a half it is the second explosion in north-western Moscow. On July 11, somebody threw a sell-less explosive divice into the office of Deputy Head of the Investigative Department of the North-West Administrative District in Zhivopisnaya Street. The explosion damaged walls, the ceiling of the office and broke out window glass.

“It is too early yet to say that these two accidents are connected,” the source said.

Moscow police try to steal bag containing apartment sale cashhttp://en.rian.ru/russia/20110826/166194362.html

11:05 26/08/2011

MOSCOW, August 26 (RIA Novosti)

Two police officers have been arrested in Moscow after attempting to steal a bag containing the proceeds of an apartment sale from a passerby, police said on Friday.

The attempted robbery occurred on Thursday evening after the off-duty officers encountered a 36-year-old man who had just sold his apartment. The man had the 1.7 million ($58,500) from the sale of his apartment in a bag and was drinking in the street with a friend.

The officers accepted an invitation to have a drink with the man and his friend, after which they attacked both men with baseball bats and tried to grab the bag. The police spokesman did not say where the baseball bats had come from.

An overall reform aimed at improving the public image of the police force is currently underway in Russia. Russian police officers have been accused or convicted of a number of horrific crimes in recent years, from murder to rape.

Interior Minister Rashid Nurgaliyev used his annual Police Day address in late 2009 to remind police chiefs that officers should point their weapons at criminals, and not aim them at law-abiding citizens. Shortly after this, he advised ordinary citizens to "give as good as they get" if they are attacked for no reason by officers.

GOOGLE TRANSLATION

http://top.rbc.ru/society/26/08/2011/612390.shtml

Chechen Interior Ministry gave out weapons to officials and businessmenActing Prosecutor of Chechnya, Abdul-Sharpuddi Kadyrov made a presentation and nine objections to the Interior Minister of Chechnya for issuing illegal orders of the weapons a number of individuals reported to the prosecutor's office.The audit found that, contrary to the requirements of the law fixed the Interior Ministry combat weapon for a number of leaders of executive bodies, local government, state-owned unitary enterprises, departments of the Federal Treasury and the Federal Migration Service of Chechnya.In addition, military firearms were issued in some cases managers of commercial organizations which do not belong to the category to be goszaschite.Meanwhile, evidence of the reality of threats to the safety of these persons were not available, underlined in the department.Currently, the Interior Ministry leadership removed the unlawful orders, issued permits to carry firearms to such persons canceled.Comments concerning the Chechen Interior Ministry imposed the submission has been received.August 26, 2011 g

26 August 2011, 11:50

Chechnya saw the first mass baptism in its historyhttp://www.interfax-religion.com/?act=news&div=8678

Grozny, August 26, Interfax - Archbishop Zosima of Vladikavkaz and Makhachkala performed the first mass baptism ceremony in Chechen history in the river Terek of Naursky dirstrict.

35 five citizens of Naursky and Shelkovsky districts were converted to Orthodoxy, press service of Chechen leader reports Friday.

"Keep your Orthodox faith, live in peace with each other, avoid evil, make your families and grow your children," Father Zosima wished to the young Christians.

Archpriest Amvrosiy (Marchenko) of Naursky okrug thanked Archbishop on behalf of all parishioners for the ceremony. He expressed hope that such mass baptism in Terek water would become a tradition.

Moscow mayor signs plan for Muslims feasts of 2011http://vestnikkavkaza.net/news/society/17240.html

Moscow Mayor Sergey Sobyanin has approved the plan for Muslim feasts for 2011, RIA Novosti reports.

Moscow will have Uraza-Bayram on August 30, Kurban-Bayram on November 6. They will be held at the Shukhada Memorial on Poklonnaya Hill, the Historic Mosque of Bolshaya tatarskaya Street, the Moscow Cathedral Mosque and Yardam.

Earlier reports said the celebrations would be held at the pavilion N2 in Sokolniki. The Mufti of Moscow and the Central Region of Russia Albir Krganov and head of the department for religious links, Yuri Artyukh, reached an agreement.

Pavilion N2 covers about 5,000 square meters. It can hold 8,000 people.

Last year had Internet photos of blocked traffic and sacrifices on the street at the Kurban-Bayram. This year Moscow Mayor Sergey Sobyanin was asked to start the prayers for Muslims.

Uraza-Bayram is one of the main Islamic feasts, which concludes the fasting of Ramadan.

Kurban-Bayram is a sacrificial day. It lasts several days. Muslims are to make a sacrifice of a sheep, horse or cattle. Kurban-Bayram is a time when Muslims can make pilgrimage to the Mecca.

10:25 26/08/2011ALL NEWS

Seven forest fires on 126 ha reported in Far East

http://www.itar-tass.com/en/c154/212168.html

KHABAROVSK, August 26 (Itar-Tass) —— There are seven forest fires on a total area of 126 ha in the Far East this Friday, the Forestry Department in the Far East Federal District reports.

Three fires are continuing burning in Yakutia, one in the Amur Region, one in the Magadan Region, one in Kamchatka and one in Chukotka, a department source said.

All the outbreaks in Yakutia and the Amur Region are localized.

Since the beginning of the season, there have been 1,743 wildfires in the region. Almost 919,000 ha, including 720,200 ha of forests, burned up.

The Russian Emergencies Ministry's regional centre recommends to bar access to forests for the population. A meeting of the commission on emergencies in the Amur Region on Thursday noted that the region's forest flammability risk was rated at the fourth of the five degrees. The situation is complicated by the dry and hot weather that will last until the end of this month.

Preparations continue in residential sites in the Far East for the autumn wildfire risk season -- mineralized protection lines are restored, and new machines are provided for forest fire-fighting services.

Putin accuses opposition of selling MP seatshttp://www.reuters.com/article/2011/08/25/us-russia-putin-parties-idUSTRE77O71520110825

Thu, Aug 25 2011

By Gleb Bryanski

SMOLENSK, Russia - Russian Prime Minister Vladimir Putin on Thursday accused opposition parties of selling seats in parliament, in the strongest attack yet on political opponents ahead of a December parliamentary election.

The accusations come in response to opposition parties' criticisms of a proposed law designed to boost political competition by making so-called primaries mandatory for all parties before forming lists for the Duma lower house of parliament election.

The law will force other parties to hold a vote similar to one that United Russia carried out on orders from Putin who seeks to revitalize his party, dominated by bureaucrats, and bring in fresh faces.

"Only those parties who sell their seats are against holding a primary vote," Putin told the winners of an internal United Russia's primary vote in Smolensk, 380 km west of Moscow, in an uncharacteristic attack on political opponents.

United Russia holds 315 out of 450 Duma seats, allowing it to change the Constitution.

Officials at three other political parties represented in the Duma - the Communists, ultra-nationalist LDPR and socialist Just Russia - criticized the proposal, saying it was an interference in party affairs.

LDPR said it will complain to President Dmitry Medvedev over Putin's initiative while liberal Right Cause mocked the name "primaries" borrowed from the U.S. political life and said the December election was to the Duma and not the U.S. Congress.

Political parties said United Russia's primaries were carefully orchestrated but the party leadership responded saying that many prominent United Russia members lost the primary vote and will not be included in the party list.

"(The opposition does) not want to develop democracy in our country, but that is their business. United Russia will not enforce the primary vote. But if they do not want it, it will lead to stagnation in the society."

"Only those organizations which are not afraid of open competition, only they will survive, they will have all the chances for development, for (gaining) support from the country's population," Putin said.

The parliamentary poll will precede the presidential election in March 2012 in which both Putin and Medvedev have hinted they may take part.

Putin is seeking to strengthen popular support for his party through a creation of the so-called All-Russia People's Front, which should help renew United Russia. The Front members will receive 1/4 of places on the United Russia party list.

Natalya Sementsova, a physics teacher from Smolensk who won the primary vote, told Putin that political parties in the Duma have become detached from real life. "People do not understand what is happening there and do not care."

"You got to the point," Putin said.

PRESS DIGEST - Russia - Aug 26http://af.reuters.com/article/metalsNews/idAFL5E7JQ0CE20110826

Fri Aug 26, 2011 8:15am GMT

Moscow Aug 26 (Reuters) - The following are some of the leading stories in Russia's newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Russian President Dmitry Medvedev will hold a meeting with leaders of Russia's political parties next Monday to discuss the upcoming parliamentary elections, the paper reports.

- Russian police dispersed a rally on Thursday organised by nationalists in Moscow and St Petersburg in memory of a Russian student, who was deadly beaten up by an athlete from the restive North Caucasus region, the daily says.

- The paper runs an interview with the chief executive of state-controlled regional grid company MRSK Nikolai Shvets, who says the company eyes buying assets in Europe.

VEDOMOSTI

www.vedomosti.ru

- Thirty percent of Russians said they will vote for any other candidate rather than President Dmitry Medvedev, if he decides to run in the upcoming presidential election, the paper cites a recent poll by Levada.

- SovEcon analysts forecast Russia's 2011 sunflower production to hit a high of 8.35 million tonnes, the daily writes.

- Two partners in the world's top aluminium producer, UC RUSAL , want to sell their stakes to Russian tycoon Alisher Usmanov, owner of an iron ore miner and shareholder in Norilsk Nickel , the paper reports.

NEZAVISIMAYA GAZETA

www.ng.ru

- Russian Prime Minister Vladimir Putin on Thursday held a meeting on the modernisation of healthcare system, as analysts say the reform will require a lot of effort from both federal and regional authorities to succeed, the paper writes.

TRUD

www.trud.ru

- Moscow mayor Sergei Sobyanin said on Wednesday that the city will spend 7 billion roubles ($241,8 million) to refurbish all Moscow's theatres, the daily says. ($1 = 28.945 Russian Roubles) (Writing by Ludmila Danilova)

Russian Press at a Glance, Friday, August 26, 2011http://en.rian.ru/papers/20110826/166189809.html

08:47 26/08/2011

WORLD

 

A Russian-backed candidate is unlikely to win as the former Georgian republic of Abkhazia goes to the polls to elect a new president on Friday. (Moscow News)

 

A major international scandal could be brewing following the admission by NATO commanders that the allies deployed special forces units to help rebels fight Muammar Gaddafi’s regime in Libya despite limitations set by a UN mandate. (Kommersant, Izvestia)

 

Fans of Apple around the world are uncertain about the future of the company as legendary and charismatic Steve Jobs resigns as chief executive. (Kommersant,Vedomosti, Izvestia)

 

ECONOMY & BUSINESS

 

Prime Minister Vladimir Putin ordered an overhaul of safety checks on Russia's spacecraft in the wake of a carrier rocket accident that led to the loss of a Progress space freighter. (Kommersant)

 

British telecommunications holding Aegis has announced plans to pay a record 100 mln euros for Russia’s Master Ad outdoor media agency. (Kommersant)

 

Russian banks have recently shown growing interest in issuing loans for construction, real estate development and transportation projects. (Kommersant)

 

Russian tycoon Alisher Usmanov may soon become a major shareholder of UC Rusal aluminum holding if he agrees to by the share of Sual Partners in the company. (Vedomosti)

 

Half of the Russian population will be able to improve their housing conditions through mortgage lending by 2020, Russia's state-owned Mortgage Agency (AIZhK) claims. (Rossiiskaya Gazeta)

 

SOCIETY

 

Starting next year, illegal taxi drivers in Moscow will have to pay a fine of 10,000 rubles ($330) if caught by traffic police. (Moscow News)

 

Environmental activists have called on Moscow residents to stop using plastic bags for shopping and use bags made of woven cloth instead. (Moscow News)

 

DEFENSE

 

The Russian military has tested an S-400 air defense system in the vicinity of the Sheremetyevo airport near Moscow to prove its ability to distinguish between military and civilian aircraft. (Izvestia)

 

SCIENCE

 

Dutch scientists are developing “bullet-proof skin” or “bio-armor” by implanting an organic web extracted from goat milk into human skin. Interview with the author of the project. (Rossiiskaya Gazeta)

 

CRIME

 

A retired police investigator arrested this week on suspicion of organizing the 2006 murder of journalist Anna Politkovskaya has denied wrongdoing. (Moscow Times, Vedomosti, Rossiiskaya Gazeta)

RON PAUL REPORTEDLY CUTS TIES TO RUSSIAN CHANNEL http://www.newswithviews.com/Kincaid/cliff543.htm

 

By Cliff KincaidAugust 26, 2011NewsWithViews.com

The Russia Today propaganda channel, which has just cancelled the “Adam Vs. The Man” show featuring American Adam Kokesh, has come to the assistance of the brutal Assad regime in Syria. “A media delegation from the Russian channel ‘Russia Today’ visited the Military Hospital of Tishreen in Damascus and listened [to] the truth about Syria’s events from the injured soldiers and law-enforcement personnel,” reports the official Syrian news agency.

According to this bizarre account, the human rights demonstrators in the streets being shot and killed by the regime are “armed terrorist groups” that use “machineguns, snipers and grenades with the aim of killing.”

Meantime, on his August 22 show on Russia Today, Kokesh aired a “Happy Birthday Ron Paul” segment that included “an update from Congressman Ron Paul’s campaign” about his fundraising success. The next day, however, he announced he was being terminated by Moscow management and that Paul’s campaign was no longer cooperating with the broadcast.

Politico’s Keach Hagey is now reporting that Kokesh’s on-air fundraising for Republican presidential candidate Paul, an apparent violation of U.S. law against foreign contributions to U.S. political campaigns, may have been a factor.

Russia Today, or “RT” as it likes to call itself in order to camouflage the Russian sponsorship and funding, is not only brazenly defending the Syrian regime, a long-time client state of the old Soviet Union, but is attacking NATO over its military campaign against the Gaddafi regime in Libya. NATO was a long-time target of the old Soviet Union because of its original role as an anti-Soviet alliance.

The channel has been described as a front for Russian intelligence activities.

Yvonne Di Vito of a group called “Libyan friends” told RT that the Gaddafi regime, a notorious dictatorship, had a good record on human rights. She insisted, “Differently from other countries that went through a revolution—Libya is considered to be the Switzerland of the African continent and is very rich and schools are free for the people. Hospitals are free for the people. And the conditions for women are much better than in other Arab countries.”

But with Gaddafi apparently on the run, RT has been concentrating on Syria. RT quotes a researcher as saying that the U.S and Israel are behind the unrest there.

One RT story carried the headline, “Western media lie about Syria—eyewitness reports.”

Another RT story featured the views of James Corbett, who describes his “Corbett Report” as providing “breaking news and important issues from 9/11 Truth and false flag terror to the Big Brother police state, eugenics, geopolitics, the central banking fraud and more.” Corbett suggested Russia could intervene in Syria to prevent a collapse of the regime.

RT also featured “the journalist Simon Assaf” condemning the U.S. for trying to weaken the Syrian regime. Assaf is a contributor to international Marxist publications such as Socialist Review.

As strange as all of this may seem, the Moscow-funded propaganda channel had developed a significant viewership of Ron Paul supporters in the U.S. who regarded the Adam Kokesh show as a vehicle for airing their theories nationwide. Reacting to accounts of Paul collaborating with the channel and having foreign policy views that benefit Russia and its allies, a John Birch Society writer went to Paul’s defense, saying that he had been an anti-Communist Congressman from 1979 to 1985 (Paul is still a member of Congress but has announced he will concentrate on running for president and will not seek re-election to the House).

Suddenly, however, Kokesh announced on Tuesday that his own show had been cancelled.

While some of Ron Paul’s supporters are attempting to blame this columnist, for filing a Federal Election Commission (FEC) complaint over Kokesh’s on-air fundraising for Paul’s presidential campaign, others are citing Paul’s refusal to recently appear on the network and the influence of his campaign manager, Jesse Benton, who reportedly said, “Ron Paul does not do interviews with Russia Today...You’ve got Adam Kokesh on the air beating his chest every night...and no one watches you guys anyway.”

It is illegal for a foreign corporation such as RT to interfere in U.S. elections by providing campaign support for any candidate. The FEC complaint is being investigated and has not yet been resolved by the agency.

Politico quoted Benton as saying, “Our campaign accepts only legal contributions, but we are declining interviews with Russia Today until they resolve this situation.”

Paul had appeared on the Kokesh show on May 4 and in 2009 was on the channel calling for an end to NATO and attacking former President Bush’s anti-terrorism policies. During another 2009 appearance on RT, Paul called sanctions against Iran over its nuclear weapons program an “act of war.” In 2008, Paul gave Russia Today another interview, saying, “It’s great that the Cold War has ended. And I would want to continue the process of [a] peaceful relationship but not threaten Russia in any way because I don’t think it’s necessary.”

Paul supported Kokesh’s 2010 run for Congress, saying, “Adam Kokesh has dedicated his life to fighting for Liberty. He has set himself apart as one of the bold young leaders our Country sorely needs as we strive to restore our Freedoms and what has made America the greatest nation in history. I am very happy that Adam has decided to run for Congress and wholeheartedly endorse him.” Paul’s political organization gave Kokesh $3,000, his biggest financial contribution.

But in the wake of Benton’s comments, Kokesh had gone on the air on RT on August 23, his final show, noting that he had repeatedly been trying to get Ron Paul back on the air and that the disparaging remarks from Benton had been the only official response.

At the Daily Paul, a website that supports the candidate, one blogger cited the FEC complaint and said Kokesh had made a mistake “by linking his efforts on RT to the official campaign, thereby placing the PEC (official campaign) in potential legal jeopardy. Regardless of whether or not you like RT or like and agree with Kokesh as I do, I'm sure the campaign did not appreciate having to deal with this potential legal headache and potential media nightmare.”

The blogger faulted Kokesh, a former congressional candidate, for his “complete lack of political sense and understanding of even basic concepts of law and regulations regarding campaigns.”

However, Kokesh reportedly says the FEC complaint had nothing to do with the termination of his show and that he will have more to say about the controversy when his relationship with the channel is worked out. He said on the air on RT that he could return in a different “format.”

Kokesh, who freely admitted being a “paid Russian agent” while on the air, had claimed total freedom and editorial control over his RT program.

© 2011 Cliff Kincaid - All Rights Reserved

Cliff Kincaid, a veteran journalist and media critic, Cliff concentrated in journalism and communications at the University of Toledo, where he graduated with a Bachelor of Arts degree.

Cliff has written or co-authored nine books on media and cultural affairs and foreign policy issues. One of Cliff's books, "Global Bondage: The UN Plan to Rule the World" is still awailable.

Cliff has appeared on Hannity & Colmes, The O’Reilly Factor, Crossfire and has been published in the Washington Post, Washington Times, Chronicles, Human Events and Insight.

Web Site: www.AIM.org

E-Mail: cliff.kincaid@aim.org

Sakhalin: Russia's East Asia trump card http://english.aljazeera.net/indepth/opinion/2011/08/201182111112465596.html

The energy-rich Sakhalin Island is seen as a new gateway for the ever growing demand for natural resources.

The northeast Asian equation, with its complex matrix of rising economic power in South Korea, an erratic and unpredictable North Korea, a Japan beset by uncertainty and lingering calamity - and the undisputed titan, China - remains incomplete without understanding the one card in the deck that is all too often overlooked: Russia.

With its growing global role as a major energy exporter, Sakhalin Island, in Russia's Far East region, has become one of its most valuable but least recognised geographic assets - and a prime example of why Russia is an increasingly dominant player in Far East Asian politics and resource exploitation.          

Sixty-six years after the end of World War II, having never signed a formal peace agreement, Russia and Japan remain technically in a state of war. During the closing days of that conflict, Russia settled an old score when it reclaimed control of the 948 km Sakhalin Island just above Japan's northernmost island, Hokkaido.

This fish-shaped island, Russia's largest, occupies more land than Ireland or Sri Lanka and is richly endowed with timber, fish, coal, oil and gas. Just 43 kms from Japan, Sakhalin has been a point of contention between the two Asian powers since they first began competing for control in the early 19th century.

After the Russo-Japanese war (1904-05), Japan gained control of the southern half of Sakhalin (which it called Karafuto) below the 50°N parallel, as demarcated under the terms of the Treaty of Portsmouth. Japan occupied southern Sakhalin until 1945.

Sakhalin Oblast (district) includes the northern and southern Kuril Islands, an archipelago of 56 volcanic islands which arc northeasterly across the Sea of Okhotsk, from Hokkaido towards Russia's Kamchatka Peninsula.

For more than six decades, relations between Moscow and Tokyo have been dogged by the dispute over four of the southern Kurils - Kunashiri, Shikotan and Etorofu and the Habomai islets - which Japan calls the Northern Territories.

Political tensions ramped up after President Dmitry Medvedev became the first Russian leader to visit the Kurils in 2010. Medvedev called for Russia to "consolidate its presence" in the islands and for an increased military presence with advanced weapons. This came in advance of a recent announcement by Russia's defence minister that two brigades would be sent to "defend the nation's interests" (read: energy resources) in the Arctic region.

Tokyo responded to the Kuril announcement with vocal protests which prompted a sharp rebuke from Moscow. Nothing indicates Japan - or its ally the United States, which supports Japan in the Kuril dispute - would consider an armed conflict over the islands, yet Japan remains adamant that the small, remote, but resource-rich (though grindingly poor) islands are rightfully Japanese territory.

A rising East Asian power

Skirting one of the world's most rapidly developing regions, home to the world's second and third largest economies (China and Japan), Sakhalin Oblast is poised to partner and compete with its Pacific Rim neighbours. Sakhalin Island, where the region's wealth and development are concentrated, represents Russia's potential - both in terms of its growing affluence and, more broadly, trade, energy production and forest and ocean resources.

In an age of soaring energy needs and the rise of economic giants led by China, India and Brazil, the world is hungry not only for Sakhalin's fish and seafood, but for its oil and gas.

Sakhalin has an estimated 45 billion barrels of oil equivalent (BOE), making it one of Russia's most important oil and gas producing regions and a prime target for foreign investment.

Much of Sakhalin's oil and gas is exported to South Korea, Japan, Australia, New Zealand, Southeast Asia and the United States. These vast resources drive Sakhalin's largest energy extraction projects: Sakhalin-1 and Sakhalin-2, both overseen by international consortiums.

Sakhalin-1 is operated by Exxon Neftegas Ltd - along with Russia's Rosneft, Japan's SODECO and Indian state-owned ONGC Videsh Ltd. 

Sakhalin-2 is operated by a consortium of Russia's Sakhalin Energy Investment Company, Gazprom, Royal Dutch Shell, Mitsui and Mitsubishi. The project includes Russia's first liquefied natural gas (LNG) plant which operates out of the south of the island exporting much of its product to South Korea and Japan.

In the first six months of 2011, Sakhalin produced nearly 8 million tonnes of crude oil, a five per cent increase over a year earlier, the bulk of which was produced by Sakhalin-1 and -2. During the same period, 13 billion cubic metres of natural gas were extracted as reported by Itar-TASS.

Sakhalin's value as an oil and gas exporting region were highlighted in a 2009 Center for Strategic & International Studies Energy and National Security Program report which noted Russian oil exports offer "reliability, security and diversity of supply" geographically and politically distant from the uncertainties and instability of places such as Nigeria, Venezuela or Iraq.

With these still relatively untapped energy and marine resources, strategic location and an increasingly vibrant economy, Sakhalin's importance to the Asia-Pacific region is reflected in the attention it and the Kuril Islands are receiving from Moscow, seven time zones away.

Political tensions and territorial disputes notwithstanding, Sakhalin's relationship with its East Asian neighbours is maturing. In 2009, then-Japanese Prime Minister Taro Aso said the Sakhalin-2 LNG plant suggested Russia was "building a window to Asia". Yet this often overlooked corner of northeast Asia has a history and modern role as complicated as the island's weather, which can turn from rain and fog to snow, sun and wind in a single day.

Closer to Hawaii than Moscow

Clinging to the far edge of the Russian Republic, Sakhalin is physically closer to Hawaii than Moscow. But this distance from Russia's traditional power centre does not indicate isolation, so much as an orientation toward its East Asian neighbours.

Sakhalin today remains something of anomaly: barely noticed by its western Russian compatriots, Sakhalin is often regarded as a provincial outpost, yet many of its people are among Russia's most widely traveled. Clinging to the edge of East Asia, the majority of

its residents are ethnic Europeans. Though technically at war with Japan, Sakhalin enjoys close, often chummy personal and business relations with its southern neighbour.

Sakhalin's complex social fabric is a mix of ethnic Russians and others from former Soviet Republics - but roughly ten per cent of the population are ethnic Koreans who were effectively deported to Sakhalin by imperial Japan to work as conscripted labourers, mostly in mines and factories during World War II.

When the Japanese were forced to return to Japan after the war, many Koreans stayed behind, some by choice, others not, but most were left in diplomatic limbo for decades. By the demise of the Soviet Union most ethnic Koreans had Russian citizenship.

A sign of Sakhalin's new found prosperity is the number of foreigners from former Soviet republics who come to Sakhalin for work. Kyrgyz, Uzbeks and other Central Asians travel to Sakhalin in search of jobs which pay better than in their home countries. 

One of Sakhalin's best known visitors was Russian playwright Anton Chekhov who made the long, arduous journey across Russia in 1890 to visit Sakhalin - then a penal colony, chosen for its extreme isolation and brutal conditions. Chekhov spent three months on Sakhalin conducting a detailed census of the prisoners which he documented in the book Sakhalin Island wherein he wrote that he had seen "the extreme limits of man's degradation, lower than which he cannot go". Today Chekhov's visit and subsequent book are held in such high regard on Sakhalin that statues, a downtown street, a theatre and a museum all commemorate the writer and his book.

Of the island's infrastructure Chekhov observed: "All new construction on Sakhalin gives the impression of having been destroyed by an enemy or else of being long since abandoned. Only the fresh, bright colours of the hut frames and the shavings give evidence that something quite opposite to destruction is taking place."

More than a century later, on the surface, it would appear little has changed. Sakhalin's regional capital Yuzhno-Sakhalinsk (called Yuzhno, literally "Southern", for short) is a dusty, provincial town of 175,000 people (roughly one-third the island's population) - a city of low-rise Soviet-era housing blocks, rusted out shipping containers, pot-hole plagued roads and a central Lenin Square with a hulking statue of Russia's greatest revolutionary stepping with determination to the east.

Colourful Soviet-era tile mosaics still adorn the sides of public buildings and walls and doors are scrawled with hand-written warnings of "falling snow and ice" or "vicious dog" in this town which fluctuates between various states of snow, mud or dust.

Many of Yuzhno's roads are in a permanent state of disrepair and its older buildings appear only a colourful snap-on facade tile away from crumbling in the next large earthquake (a 1995 tremblor devastated the north Sakhalin town of Neftegorsk). But Yuzhno's erstwhile "wild East" frontier backdrop is being reshaped by the spoils of oil

wealth. Luxury sedans and brightly polished imported SUVs share the road with dust-coated second-hand cars from Japan and boxy Russian-built Volgas and Moskvich. 

Today, youth fashion in Yuzhno calls for black leather jackets, ultra-tight jeans, high heels and designer brands. The ubiquity of iPhones along with sushi restaurants, trendy Italian cafes and Czech beer pubs all suggest money flows as fast as the river that cuts through sprawling Gagarin Park in central Yuzhno. The short drive to Sakhalin's decidedly unpolished airport passes the popular new five-story Citi Mall where the "haves" can shop for imported goods.

The emergence of Sakhalin as a rising East Asian power shatters old stereotypes of Soviet-era shortages and endemic long queues. The markets and grocery stores of Yuzhno are fully stocked with fresh produce and imported foods from Asia and beyond. Living expenses on Sakhalin are generally higher than most other parts of Russia, reflecting the island's remote location and an economy riding a swelling wave of oil and gas.

Who controls that oil and gas and where it is sold, along with other regional economic issues and thorny territorial ones, will undoubtedly come up when Russia and Japan, both member states of the Asia-Pacific Economic Cooperation (APEC), come face to face this November at the annual APEC meetings in Honolulu, Hawaii.

In 2012 APEC will again convene in host nation Russia's Far Eastern city of Vladivostok, a short flight from Sakhalin Island. With Japan still only months out from the triple earthquake-tsunami-nuclear disaster of March 11 and a cloud hanging over the future of Japan's own nuclear industry, the energy resources from nearby Sakhalin take on greater significance, suggesting Russia will continue to hold a strong hand in the region for the foreseeable future.

Jon Letman is an independent journalist in Hawaii where he covers wildlife conservation, politics and people of the Pacific region. Follow him on Twitter: @jonletman

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

Ukraine Seeks to Parry Russian Energy Pressureshttp://www.israelnationalnews.com/News/News.aspx/147216#.Tlc6IF1wb5w

The Ukraine is trying to steer a middle course between Russia and the EU with the ultimate goal being EU membership. by Amiel Ungar

Published: 26/08/11, 2:35 AM

After the leaders of the Ukraine's Orange Revolution failed to translate their victory into effective rule, they were succeeded by the man they ousted – Victor Yanukovych.

When Victor Yanukovych assumed office, his plans for balancing between Moscow and Brussels were treated with skepticism. Although such a policy was touted as an attempt to prevent the Ukraine from fracturing along the lines of an anti-Russian West and pro-Russian East, Yanukovych was considered firmly in Moscow's pocket.

This assessment may change now as the Ukrainian president is facing down an attempt by Russia to pressure Kiev into joining a customs union comprised of Russia, Belarus and Kazakhstan. The major inducement for joining this customs union would be a discount on gas prices which under the Ukrainian-Russian agreement of 2009 are pegged to oil prices and therefore have gone up considerably.

Russia would be willing to forgo this condition providing the Ukraine followed Belarus and permitted a Russian takeover of the state energy company Naftogaz that moves the bulk of Russian gas sold to Europe.

The Ukraine proposed a compromise under which it would sign a trade back, that is the so-called 3+1 deal, instead of joining the customs union. This is necessary to preserve the Ukrainian option of eventually joining the European Union. Russian president Dimitry Medvedev rejected the proposal this month.

To show the Russians that the Ukraine is serious about preserving its independence, the Ukrainian government announced plans to sharply reduce its gas purchases from Russia by introducing energy efficiency and by replacing gas with coal. It will also announce tenders for producing gas from shale deposits.

In an article published in the Wall Street Journal, Yanukovych, while prizing his country's "historical connection" to Russia, announced that his goal was to make his country "a proud member of the European Union." EU membership represents "the key to prosperity," he added.

The Ukrainian president also emphasized his desire to  free his country of energy dependence " Our current exploration of shale and offshore reserves will diversify energy supplies and help avert future crises.."

While his government has put on trial an Orange leader and former Prime Minister Yulia Tymoshenko, Yanukovych claimed that his country was aligned with the democratic values of the EU: " Ukraine's partnership with the West extends beyond economic and strategic interests. It also includes a shared culture of values and a commitment to democracy, human rights and international peace."

He promised to fight corruption which remains a major impediment to EU membership. "Replacing the remnants of Soviet corruption with transparency across all areas—including government administration, business and the judiciary—remains a challenge. No person should be immune from the consequences of his actions regardless of political standing or social stature. Without accountability, Ukraine's transformation will be unattainable. Without the rule of law, Ukrainian citizens will have their daily lives complicated".

As a preliminary to the EU membership process, Ukraine will hold talks for an association agreements and the creation of a free trade zone.

Symposium: Russia After Elena Bonnerhttp://frontpagemag.com/2011/08/26/symposium-russia-after-elena-bonner/

Posted by Jamie Glazov Bio ↓ on Aug 26th, 2011

In this special edition of Frontpage Symposium, we have gathered a distinguished panel to discuss the recent passing of Elena Bonner, her legacy and the future of human rights in Russia. Our guests today are:

Yuri Yarim-Agaev, a former leading Russian dissident and a member of the Moscow Helsinki Group. Upon arriving in the United States after his forced exile from the Soviet Union, he headed the New York-based Center for Democracy in the USSR.

Konstantin Preobrazhensky, a former KGB agent who became one of the KGB’s harshest critics. A Senior Fellow at Gerard Group International, he is the author of seven books about the KGB and Japan. His new book is KGB/FSB’s New Trojan Horse: Americans of Russian Descent.

Igor Melcuk, Professor Emeritus of Linguistics at the University of Montreal and Member of the Royal Society of Canada. He left the Soviet Union in 1977 after being expelled from the Institute of Linguistics of the Academy of Sciences because he defended A. Sakharov in a letter published in The New York Times.

Olga Velikanova, an assistant professor at the University of North Texas, where she teaches Soviet history. Among the first scholars to work with declassified Communist Party and secret police archives, she is the author of “Making of an Idol: On Uses of Lenin,” “The Public Perception of the Cult of Lenin Based on the Archival Materials” and “The Myth of the Besieged Fortress. Soviet Mass Perception in the 1920s-1930s.” She is a recipient of many awards from different international research foundations.

and

Lt. General Ion Mihai Pacepa, the highest official ever to have defected from the former Soviet bloc. His first book, Red Horizons, was republished in 27 languages. A commemorative edition was recently issued in Romania to mark 20 years since Ceausescu was executed at the end of a trial where most of the accusations came out of this book. In April 2010, Pacepa’s latest book, Programmed to Kill: Lee Harvey Oswald, the Soviet KGB, and the Kennedy Assassination, was prominently displayed at the annual meeting of the Organization of American Historians held in Washington D.C., as a “superb new paradigmatic work” and a “must read” for “everyone interested in the assassination of President Kennedy.”’

FP: Lt. General Ion Mihai Pacepa, Igor Melcuk, Konstantin Preobrazhenky, Olga Velikanova and Yuri Yarim-Agaev, welcome to Frontpage Symposium.

Yuri Yarim-Agaev, let’s begin with you.

What were some of your thoughts on Elena Bonner’s passing? Share them with us in relation to how you view the state of human rights in contemporary Russia — and the future you envision in what appears to be an inevitable Putin-led Russia.

Yarim-Agaev: The death of Elena Bonner was first and foremost the loss of an old friend.  Regretfully, very few people are left in this world with whom I have such deep mutual understanding, a similarity in assessment of major events both in Russia and the rest of the world, as I did with her.  There was a good reason for that: together we were in the struggle with the main evil of our time, Soviet Communism, the struggle, which gave us profound insight not only into Russia and Communism in general, but also into the very nature of human society. That education provided Elena Bonner with the compass which would show her the right direction, and help her take the right position not only on events in Russia, but also in America, Israel and other countries.  Not surprisingly, her position would very often coincide with my own, – our common experience showed.

I strongly believe that the experience, which we acquired in our struggle with Soviet Communism, can be effectively applied to many other regions and situations.  Some intellectuals argue that the dissident struggle, which made us stronger and more decisive, made us narrow minded at the same time.   I believe that the opposite is true.  When you actively interact with an extreme form of society, as was Soviet Communism, you get better insight into the general nature of human society, which is often concealed under normal circumstances.  When, for your own survival, you are forced to think much more intensively, you get much broader and deeper understanding of your own country and the whole world.  Elena Bonner’s life proved that very clearly.  Her numerous statements and articles on various events in the US, Russia, Israel and the rest of the world have been profound and very precise.

Some considered Elena Bonner as merely the wife of Andrei Sakharov, a quite respectable position by itself. Yet, she was much more. She was not only a leading Soviet dissident in her own, but also a globally renowned human rights champion.  Her impact

on world politics of the 20th century was significant, and despite her old age and poor health, she managed to carry over her influence into the 21st century as well.

Preobrazhensky: Unfortunately, I did not have a chance to meet Elena Bonner, though I now live in Boston. Only this spring I tried to interview her for our documentary, “KGB Does Not Exist Any More?” which we are shooting together with American documentary producer Michael Colbert. It focuses on growing Russian influence in the United States. Our documentary shows that Elena Bonner’s struggle is not outdated. But her daughter, Tatiana, told me on the phone that Elena Bonner does not give interviews any more. Nonetheless, we are fortunate that  God gave her a long live in spite of all of her sufferings.

The KGB always hated Elena Bonner. On the eve of the 90th birthday anniversary of Academician Sakharov, the government 1st channel of Russian TV showed the film, ”My Father, Academician Sakharov.” It portrayed him as a talented but naive physicist who was under the influence of the evil-doing anti-Soviet activist, Elena Bonner.

It is, of course, the KGB version. It was taught to us at the KGB school in Minsk, where I studied in 1976-77. In 1985, when I was a Tokyo Correspondent of the Soviet TASS new agency, I was shown a secret wire from Moscow. It ordered KGB foreign correspondents all over the world to spread a rumor that Elena Bonner had beaten a policeman. It means that she has never tried to find any compromise, tolerance or “understanding” with the KGB.

How do I see the future of the Russian human rights movement? I see it as FSB-controlled. This is because the FSB is the only one actual political body in Russia. The FSB will never yield state power to anybody. And, ironically, there is nobody to take it. The Russian opposition is weak and disorganized. The FSB is playing with it as a cat with a mouse. In the Soviet period, KGB 5th Directorate managed to infiltrate the human rights movements with its collaborators. In today’s Russia, it is impossible to create any political organization independent from the FSB.  As soon as you create it, the FSB will fill it with their informants. It was the same in Soviet times regarding the Communist Party. The FSB is its organizational substitution.

In the interview devoted to Elena Bonner, the head of “Memorial” human rights center, Oleg Orlov, spoke about permitted and not permitted compromises with authorities.  This kind of logic could be applicable, maybe, to Imperial Russia of the early 20th century. But now the total authority belongs to the FSB. It is not up to the individual to determine the extent of compromise with a secret service. They will do it instead of you. While you will be thinking about such compromises, the wheel of your car may fly away when you are driving, or a group of unknown hooligans will meet you in the street.

By the way, I have never heard from Russian human rights activists a clear statement saying that state power belongs to the FSB. The only exception was “Glasnost” Foundation under Sergey Grigoryantz. It was dissolved very soon after Putin’s coming to

power. Its international conferences, “KGB: Yesterday, Today, Tomorrow,” where I have spoken a lot, are not held any more.

KGB/FSB feels genetic hatred against human rights activists. In recent years, Putin’s propaganda has done its best to present them as national traitors living for American grants. They are painted as “jackals in the foreign embassies” — as Putin called them. The very word “human rights activist” became a sort of curse.

That is why many Russians dislike human rights activists. And the West is tired of them. They are an obstacle in developing “real politics” with Russia, which is nothing but victimizing human rights for the sake of oil. It is a historical success of Russian foreign policy.

When I tell Americans that human rights are violated in Russia as in the Soviet times, many of them don’t believe me. It is the result of the sophisticated Russian propaganda and influence here.

After Putin’s return to the presidency, Russian petro-state will continue its penetration of the Western world with its ingenuous program: “oil for democracy”. It is aimed at dissolving Western democracy. It has already begun.

Pacepa: I want to congratulate Jamie for honoring Elena Bonner and what she stood for. We all could profit from a better knowledge of her heroic life. I did not have the privilege of meeting Elena, as Yarim-Agaev did, or of learning firsthand about the KGB war against Elena, as Mr. Preobrazensky did. But I had the honor of meeting Andrei Sakharov, and I cannot imagine a better life companion for that legendary fighter for freedom than Elena Bonner.

For people of my generation, Elena is a saintly hero. She suffered years of brutal governmental exile and persecution because she dedicated her life to helping Russia get rid of its historical totalitarian autocracy. Some 150 years ago another famous Russian, sociologist Petr Chaadayev, had the guts to describe Russia the way it really was:

“A unique world, submissive to the will, caprice, fantasy of a single man, whether his name be Peter or Ivan. … Contrary to all the laws of the human community, Russia moves only in the direction of her enslavement and the enslavement of all the neighboring peoples.”

Tsar Nicholas declared Chaadayev insane, and locked him into an asylum–where he died. By the beginning of the 1980s, the whole Russian government looked like an insane asylum, and Elena Bonner was not afraid to say that out loud. The Soviet tsar exiled her to the boondocks.

In 1991 the Communists lost power, but not for long. On December 31, 2000, the first anniversary of his appointment as Russia’s president, Vladimir Putin ordered Stalin’s national anthem resurrected, with new lyrics by Stalin’s lyricist, Sergey Mikhalkov. Old

Communism was back in style. Elena called the act a “profanation of history.” Putin disagreed: “We have overcome the differences between the past and the present.” [1]Have we? During the old Cold War, the KGB was a state within a state. By 2010, Putin’s KGB, rechristened FSB, became the state. Over 6,000 of his former colleagues in the KGB–an organization that had in the past killed over seven million, after framing them as Western spies—were running Russia’s federal and local governments. The Soviet Union had one KGB officer for every 428 citizens. Putin’s Russia has one FSB officer for every 297 citizens. [2] It is like democratizing Germany by putting the old, supposedly defeated Gestapo in charge.

Elena Bonner called that KGB dictatorship a malignant tumor on Russia’s body, and she warned that that cancerous tumor might kill the country’s hopes of breaking with its tyrannical past. I have not only political but also personal reasons to fully agree with Elena. I was 25, when the doctors advised my mother to have a just discovered malignant tumor removed as soon as possible. “What’s the rush, if it doesn’t hurt?” my dear mother kept asking me every time I tried to take her to the hospital. Two years later I was kneeling at her grave. That was the last, and probably most important, lesson I learned from my dear mother. This is also the last lesson Elena Bonner tried to teach her fellow countrymen: If you have a cancer, get rid of it.

Velikanova: Jamie, thank you for inviting me here to share my personal thoughts about an outstanding personality — Elena Bonner. In opposition to the members of our round table who have their personal perspectives to share, I suggest here the brief reflection of a historian about Elena Georgievna – a free individuality who lived in a totalitarian state. She was a courageous person who was able to speak loudly about what she believed when all others around her kept silence.

How was it possible that such a free person could be raised in the USSR?  Andrei Sakharov – another example of an absolutely free personality – was the son of a professor. He received a home education and did not attend Soviet school until the 7th grade. A genius with an immediate affiliation with science, he did not belong to the Soviet mundane. But Elena Bonner was a Soviet girl, close to earth, and the daughter of a party official. While her father was a Comintern worker and her mother, Ruth, a devoted-hardliner Communist, the girl was influenced very much by her grandmother Tatiana who still lived by old values.  In Bonner’s writings she acknowledged the role of “babushka” Tanya and the good books in her childhood. A 14-year girl experienced the arrest and execution of her father in 1937 and the exile of her mother. During the war she served as a nurse on the front and was wounded, and later became engaged in medical education and practice as well as literary and political activity.   The experience of an orphan of 1937 as well as her talent gave Elena Georgievna the ability to see through all things “Soviet,” but surely she belonged to an insightful  but tiny minority.

Another question to ponder was her fate:  why was so much dirt poured upon her in the Soviet press and public opinion? Of course that was an intentional strategy of the KGB, discribed by Mr. Preobrazhensky above, to discredit human rights activists. I remember another version of the aforementioned rumor in the 1980s that Sakharov was a hen-

pecked husband and his wife regularly beat him (with N. N. Yakovlev among the gossipmongers). But the KGB is not a sole explanation to all Russian troubles.  It seems that the KGB’s ignoble strategy had its soil in Russian old traditional suspicion to talented individuals, especially of her gender and of half Jewish origin. These low, plebian instincts were exploited by the KGB. Bonner’s active and independent role near the great scientist Sakharov was unusual for a traditional Russian family. An example of such patriarchal and misogynic attitude is the fate of Raisa Maksimovna Gorbacheva, a beautiful and strong woman, who was hated by all the Soviet Union.

Moreover, the dissident movement, of which Bonner was a member, was not comprehensive for a vast majority of Soviet people. They hardly understood the concept of human rights and why it worth going into exile or even prison for it. The general population had almost no information about the movement for human rights until 1975 when the Helsinki Declaration with its seventh clause — an agreement to uphold human rights — was signed published in the USSR. But even after that public opinion was molded mostly by propaganda and the KGB which represented dissidents as an evil foreign force. A handful of intelligentsia who understood the situation had too little influence on public opinion inside the USSR. In this context, in the eyes of philistines she looked as an outcast — how could this woman, a Jew, dare to criticize Soviet politics?

Elena Bonner had courage, talent, and strength to struggle for the goals that seemed unrealistic in the suffocating atmosphere of the late Soviet Union. Despite all censorship and suppression of the critical voices, the efforts of these dissidents contributed to emancipation impulse in the end of the 1980s.

Melcuk: I did not know Elena Bonner personally—this makes it more difficult for me to say things about her heroic life. I must insist, however, on the fact that she was a hero of our times, one of the very few human beings who fully and openly opposed the three-headed monster of the KGB, the Communist Party and the Soviet State.

I did have the honor of meeting her husband, Andrei Sakharov, face to face and to speak with him. As a result, I was completely under the impact of his personality: the razor-sharp logic, deeply human philosophy, extreme openness and friendliness, the readiness to go as far as necessary to protect his convictions that, linked to unbelievable purity of his thoughts and intentions, seemed to me then to be out of this world. To a great degree, it was thanks to Elena Bonner that this great man had seen the truth and abandoned his wrongly based idealism of a naïve wunderkind.

Elena Bonner was much more than just the wife of Sakharov of course: she was herself a great champion of human rights, so great that in 1985, the KGB felt it necessary to instruct its agents abroad, as Mr. Preobrazhensky tells us, to smear her name by spreading the most fantastic slandering rumors. I think it is important to remember that even in 21st century Russian authorities hate Mrs. Bonner and will hate her memory: she was, and her memory is, and will always be, a powerful thorn in the eye of the modern gangster dictators ruling Russia.

It is important, therefore, to spread in Western societies the knowledge and understanding of Mrs. Bonner’s struggle—in order to open eyes to more well-intentioned, but self-blinded idealists who live in their imaginary rosy world and refuse to face the gore reality.

I agree with Mrs. Velikanova that it is a miracle to see Elena Bonner to have developed into this eternally free and courageous figure that she was—out of an all-Soviet girl, with no family to lean on and completely ‘educated’ by the Soviet school and the Soviet army. This makes me feel even more respect and admiration for this extraordinary woman and personality. Her life and her moral standing should be an example not only for the Russian people, but for all people of good will around the world.

Yarim-Agaev: There is some irony in what I heard from the other panelists.  This symposium is devoted to the memory of Elena Bonner, yet more was said about the alleged power of the KGB and even the FSB than of Bonner’s real power.  It may be appropriate to mention how strong her archenemy was, but it would be awkward not to say how much stronger Elena was, who emerged victorious from that battle.

It is no mystery how a Soviet girl developed into a champion of freedom and human rights. Bonner’s outstanding intelligence and courage fully explain it. As a young girl whose father was shot and mother imprisoned she had enough facts to draw the right conclusions about the political system she lived in. There were millions of other people, however, who were in similar situations and many of them were smart enough to connect the dots–but they did not have the courage. And courage it takes, since if you don’t deny the facts, if you follow the logic, you come to conclusions which put you in a very dangerous if not lethal position.

Elena Bonner was never broken by the Soviet authorities and never obeyed them.  They, rather, obeyed her: She forced Gorbachev stand up for a moment of silence in memory of the Armenians killed in Nagorno-Karabakh under his watch.

Elena Bonner was never afraid of the KGB, whereas the KGB was very much afraid of her.  Why?  Because she had the courage to say openly and loudly that the emperor had no clothes.  The more the emperor real condition was exposed by her (and us, her fellow dissidents), the weaker he became, until finally he collapsed.  By 1991 the KGB was completely defeated and Elena Bonner stood victorious upon its rubble.

The KGB could not fully recover and never will, since its life support was provided by the Soviet communist system, which cannot be resuscitated, at least in any foreseeable future.  Although the direct descendent of the KGB, the FSB has very limited and very temporary authority.  If the KGB was a tragedy for Russia, the FSB is a farce—a Russian farce, though, with blood and jails.  Yet all the killing and the stealing was never a sign of power, but rather of weakness. The FSB came to power not because it was strong, but because everybody else was even weaker.

This refers to the post-soviet human rights community as well.  It differs radically from the dissident human-rights movement of the Soviet era, and can by no means be considered its continuation.  No single dissident organization remained after 1991 and very few former dissidents joined the new community of human-rights organizations. Elena Bonner was always skeptical about new democrats and human rights activists, and later distanced herself completely from them.  The problem with the current Russian opposition is that there is a paucity of people in its ranks who have the courage and commitment to follow Bonner’s footsteps.

The best way to end this symposium is to recall once again the heroic life of Elena Bonner and the lesson which she taught us with such clarity and power.   This lesson is that even a single person, who strongly believes in the basic principles of freedom and human dignity, and who is ready to die for these principles, can overwhelm the strongest totalitarian system—not to mention Russia’s current rulers.

Continue reading page: 1 2

About Jamie GlazovJamie Glazov is Frontpage Magazine's editor. He holds a Ph.D. in History with a specialty in Russian, U.S. and Canadian foreign policy. He is the author of the critically acclaimed and best-selling, United in Hate: The Left’s Romance with Tyranny and Terror. His new book is Showdown With Evil. He can be reached at jamieglazov11@gmail.com.

National Economic Trends

Russia May Have Record High Sunflower Harvest, Vedomosti Sayshttp://www.bloomberg.com/news/2011-08-26/russia-may-have-record-high-sunflower-harvest-vedomosti-says.html

QBy Marina Sysoyeva - Aug 26, 2011 7:55 AM GMT+0200

Russia’s sunflower-seed harvest may reach a record 8.2 million metric tons this year, Vedomosti reported, citing Vadim Vikulov, general director of the food products company OJSC Aston .

Solnechnye Produkty, a producer of food oils and fats, forecast a crop of 8.3 million tons and Moscow-based researcher SovEcon predicted 8.35 million tons, the newspaper said.

Russia has a capacity to refine 10 million tons of sunflower seeds, Vedomosti added, citing Solnechnye Produkty.

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

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

CBR's reserves data suggests zero FX interventions last week - EUR and GBP appreciation explains much of increasehttp://www.bne.eu/dispatch_text16429

VTB CapitalAugust 26, 2011

News: The CBR's international reserves increased USD 3.8bn in the week ending 19 August to USD 544bn (up USD 64.6bn YTD).

Our View: We estimate that the currency, gold and bond portfolio revaluation (approximately USD3.8bn) explains the increase in the CBR's reserves. Of this, EUR and GBP strengthening against USD contributed the most (USD 3.1bn).

The CBR's recent reserves data implies that it abstained from intervening on the FX market last week. This supports our view that the CBR does not intervene when the rouble against the basket is within the 34.25-35.25 range.

Central Bank buys currency on forex markethttp://www.bne.eu/dispatch_text16429

Troika DialogAugust 26, 2011

Russia's gross international reserves grew by $10.1 bln over August 1-19 to $544 bln. Remarkably, despite fluctuations, the euro/dollar rate stayed roughly the same during the period. The reserves growth was caused mainly by the Central Bank's forex market intervention. This reflects the fact that Russia did not face increased capital flight despite the worldwide turmoil on global financial markets, in stark contrast with 2H08.

All in all, increased forex market intervention will inject liquidity into the local money market. Besides, the budget balance will move into deficit in 2H11 and 2012, and liquidity will not need to be sterilized as was the case during times of budget surplus. These two factors will accelerate m-o-m money supply growth in August-December, while the y-o-y figure will continue to fluctuate at around 20%. Thus, inflation may remain at 6.0-6.5% in 2012.

Evgeny Gavrilenkov

Russia attracts record foreign investment in January-Junehttp://www.bne.eu/dispatch_text16429

RIA Novosti - VedomostiAugust 25, 2011

Russia's statistics service, Rosstat, registered a record foreign capital inflow for the first six months of the year: $87.7 billion. Half of that came into Russia as Swiss loans, only to be returned within this six month period.

Foreign investment in Russia shot up in the first half of this year, exceeding even the 2007 peak of $60.4 billion. Russian companies invested $67.2 billion abroad.

However, these statistics do not give a true picture of investment activity because half of the total inflow, $44.4 billion, was invested in the financial sector, while Russian financial companies invested $44.5 billion abroad. The financial sector involves companies providing financial services but Rosstat's investment analysis does not include banks.

These funds mainly came from Switzerland ($42.9 billion), as short term loans rather than as direct or portfolio investment. Russia's financial services sector has never been a leader in foreign investment, accounting for just $1.3 billion in the first half of 2010, or 4% of all investments, and less than 4% of accumulated investment.

Rosstat head Alexander Surinov declined to comment on these unusual statistics, which also seemed to baffle the financiers Vedomosti asked for an explanation.

One financial director at a large bank said neither Swiss units of Russian groups nor their Swiss counterparts have shown any unusual activity, and no bank turnover peaks were recorded over this period. These statistics could show growing investor interest in the Swiss franc, another banking source said.

This figure accounts for 13% of Russian companies' total foreign debt as of July 1 and is too large for a single transaction, said Oleg Solntsev from the Center for Macroeconomic

Analysis and Short-Term Forecasting. This could indicate intensive market speculation, but this behavior is more characteristic of banks than financial companies, said Sergei Aleksashenko from the Higher School of Economics. "When money comes and goes, it looks like some scheme is underway. It looks like someone has used Russia's economy as a laundromat - injecting illegal capital into its financial system to launder it. Could it be drug dealers?" he said.

It looks like one or more transactions by a large company, possibly in the oil sector, as they have all the money, said Troika Dialog economist Yevgeny Gavrilenkov. Rosneft and BP did plan to buy the AAR consortium out of TNK-BP for $32 billion, but the deal never came through.

The statistics picture looks similar for the first quarter. It is possible that they simply transferred funds between different legal entities to clean up their balances. "It looks like there was no real cash flow here. Possibly, someone just needed to close down one offshore company and boost another one," Solntsev said. Many Russian companies are registered in offshore zones, so this kind of statistics effect is completely unrelated to investment.

Speculative Benefitshttp://russiaprofile.org/business/43917.html

Economists Urge Caution as the Russian Economy Appears to Be Getting a Boost from Surging Capital Inflows

By Tai Adelaja Russia Profile 08/25/2011

Russia says it has recorded an unprecedented increase in capital inflows in the first half of this year, in the latest sign that the Kremlin's efforts to stimulate economic growth and improve the country's investment climate may have started to bear fruit. Between January and June of this year, investors pumped a total of $87.7 billion into the Russian economy, according to the Federal State Statistics Service (Rosstat). Analysts say the inflows are unprecedented, even when compared with the pre-crisis year of 2007, when foreign investors literally tripped over each other to invest in Russia.

However, the figures should not lead to a conclusion "about the real investors' activity" in Russia, as half of the sum, or $44.4 billion, was invested in the financial services sector, which in turn reinvested $44.5 billion overseas, the Vedomosti business daily reported on Thursday. A similar pattern was reported in the first quarter when investors injected $24 billion into the economy through the financial services sector, and Russian companies invested just about the same amount overseas. Most of the inflows consist of short term, highly liquid investments in the range of six months, and they are neither portfolio nor

direct investments, the paper said. About $42.9 billion of the funds came from Switzerland, but Russian companies invested $24.6 billion in that country over the same period, figures from Rosstat show.

Russian companies’ investment overseas also hit a record $67.2 billion in the first half-year, amid efforts by the Kremlin to allow more domestic enterprises to float shares abroad. The Russian Federal Financial Markets Service (FFMS) drafted a new regulation in July to allow Russian companies to place 100 percent of their shares abroad, a move experts described as “revolutionary,” as Russian companies are currently barred from placing more than 25 percent of their shares on foreign stock exchanges. The relaxed rules would, however, not apply to companies in the so-called strategically important sectors, where the 25 percent limit would be retained, while companies in the extractive industries would be subject to even more severe restrictions of five percent.

The move got a green light from President Dmitry Medvedev at the St. Petersburg International Economic Forum in June, where he directed that more indigenous companies must be encouraged to invest overseas. In the past, Russian companies have opted for stock exchanges in London, New York and Hong Kong for their share placement, so they could have more opportunity to attract a wide range of foreign investors and further boost the share price than in Moscow. 

Despite a corresponding capital outflow, the inflows of overseas short-term funds to the financial services sector in the first half year have been robust by Russian standards. Last year the sector recorded inflows of $1.3 billion between January and June, a mere four percent of the $30 billion capital inflow for the economy. Prime Minister Vladimir Putin said last month that foreign direct investment in Russia in the first half of 2011 increased by 39 percent (almost the level of the pre-crisis year 2007) and came to over $27 billion. The recovery of the Russian economy and the government's measures to improve the business climate in the country give grounds to hope that the FDI could hit $60 to $70 billion, Putin said.

Analysts on Thursday offered a mixed bag of reasons as to why Russia is experiencing a sudden surge in capital inflows. Sergei Aleksashenko, a former deputy finance minister and first deputy Central Bank chairman who is now director of macroeconomic research at the Higher School of Economics, suspects nefarious activities by market speculators. "It would seem at first like an intensive investment activity by speculators who trade in short-term financial instruments. However, speculative transaction has always been the prerogative of banks, and not big companies, as with this case,” Aleksashenko said. "However, if the funds flowed in and flowed out, I would put it down to some kind of scheme."

Natalia Orlova, the chief economist at Alfa Bank in Moscow, described as "worrying" the simultaneous spike in overseas investment by Russian companies. "The sudden upsurge in short-term capital inflows reported by Rosstat can be explained as intensive activity by Russian oil and gas companies," Orlova said. "However, the figures don't look so

impressive when it is remembered that Russian businesses have also been actively investing abroad despite the huge need for domestic investment."

Business, Energy or Environmental regulations or discussions

Russian Stocks Heading for Fifth Weekly Decline as Oil Retreatshttp://www.bloomberg.com/news/2011-08-26/russian-stocks-heading-for-fifth-weekly-decline-as-oil-retreats.html

QBy Denis Maternovsky - Aug 26, 2011 9:46 AM GMT+0200

Russian stocks slumped for a second day, heading for a fifth weekly drop, as oil fell and analysts forecast crude may retreat further next week after Libyan rebels consolidate their hold on the North African producer.

The Micex Index (INDEXCF) slipped 0.7 percent to 1,432.02 as of 11:30 a.m. in Moscow. A close at that level would bring the index’s weekly decline to 0.5 percent. OAO Lukoil, the country’s second- biggest oil producer, fell as much as 1.1 percent. OAO Surgutneftegaz, the fourth-biggest oil producer, and OAO Novatek, the second-biggest gas producer, both dropped more than 1.6 percent. The dollar-denominated RTS Index declined 0.4 percent to 1,577.04, trimming its first weekly gain in five weeks to 0.1 percent.

Crude for October delivery was 44 cents lower at $84.86 a barrel in electronic trading in New York. Oil may fall next week as Libyan rebels consolidate their hold on the country, with 17 of 34 analysts in a Bloomberg News survey forecasting the commodity’s price will decline through Sept. 2.

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

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

Russian markets -- Factors to Watch on Aug 26http://af.reuters.com/article/metalsNews/idAFLDE77P00E20110826

Fri Aug 26, 2011 5:56am GMTMOSCOW, Aug 26 (Reuters) - Here are events and news storiesthat could move Russian markets on Friday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to moscow.newsroom@reuters.com): Investcafe: Markets are set to open flat with eyes onU.S. GDP data, consumer confidence index, consumer spending dataand the Federal Reserve Chairman's speech later in the day. EVENTS [RU-DIA] (All times GMT): MOSCOW - Severstal (CHMF.MM) to report H1 results MOSCOW - Magnitogorsk Iron & Steel Works (MAGN.MM) to postQ2 financials MOSCOW - Akron (AKRN.MM) is expected to publish first-halfreport IN THE PAPERS [PRESS/RU]: Two partners in the world's top aluminium producer, UC RUSAL(0486.HK), want to sell their stake to a third tycoon, AlisherUsmanov, owner of an iron ore miner and shareholder in NorilskNickel (GMKN.MM), Vedomosti business daily reported. The Russian government has agreed to increase tariffs foroil shipments via the network of state-owned pipeline operatorTransneft (TRNF_p.MM) to fund the company's investments,Vedomosti said. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:Putin accuses opposition of selling MP seats [ID:nL5E7JP31K]Russian crash clouds Space Station operations [ID:nL5E7JP1L2]Russia: U.N. must play top role in postwar Libya [ID:nL5E7JP1V8] COMPANIES/MARKETS:Severstal increases stake in High River [ID:nWNAB2508]SUEK to boost India coal sales [ID:nLDE77O0UF]Rouble up on taxes, stocks fall on global outlook[ID:nL5E7JP2GM]Belarus pledges to stabilise rouble in 2 months [ID:nL5E7JP1ON]Petropavlovsk returns to profit, beats forecasts [ID:nLDE77O038]NLMK Q2 net profit at top end of forecasts [ID:nLDE77N0H1]X5 says Q2 profit $73 mln, below forecast [ID:nLDE77O02L] ECONOMY/POLITICS:Russian region must improve rights record-HRW [ID:nL5E7JP236]

Russia-led fund may postpone loan to Belarus [ID:nLDE77O0LO]Russian poll shows approval for Medvedev at low [ID:nL5E7JP1JS] ENERGY:Putin signs new product duty regime-sources [ID:nLDE77O09R] COMMODITIES:Russia mulls 20-30 pct tariff on coal exports [ID:nLDE77O087]Surgut sells Oct ESPO crude [ID:nL4E7JP0LU]Russia beet test shows weight up, sugar down [ID:nLDE77O029] MARKETS CLOSE/LATEST: RTS .IRTS 1,585.7 +0.11 pct MSCI Russia .MIRU00000PUS 828.1 -1.64 pct MSCI Emerging Markets .MSCIEF 973.2 +0.02 pct Russia 30-year EurobondRU011428878= yield: 4.243/4.205 pct EMBI+ Russia 11EMJ 251 basis points over Rouble/dollar RUBUTSTN=MCX 28.9425 Rouble/euro EURRUBTN=MCX 41.5275 NYMEX crude CLc1 $85.07 -$0.23 ICE Brent crude LCOc1 $110.72 +$0.10 For Russian bank balances see CBDEPOS For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE

Sberbank roadshow crunches to a halt in Asiahttp://www.bne.eu/dispatch_text16429

bneAugust 26, 2011

The roadshow for the privatization of a 7.6% stake in Sberbank has crunched to a halt in Asia on the back on market volatility, an unnamed source told Prime this week, adding that the schedule of the sale is set to be clarified within two weeks. The news follows an admission from the CBR's First Deputy Chairman Alexei Ulyukayev on Tuesday that the sale could be delayed.

Sberbank's top management has cancelled meetings with Asian investors scheduled for this week, banking sources told the news wire, including planned visits in China. Chinese newspaper the 21st Century Business Herald reported that the China Investment Corporation (CIC) had earlier received an offer to buy 5% in Sberbank from investment banks that are organizing the sale.

In early June, Ulyukayev said that the CBR intends to close a deal to sell the stake in September. On Tuesday, the central banker suggested that may now not happen, saying that the government intends to complete the privatization by 2013.

Two RUSAL partners seek to sell out-paperhttp://in.reuters.com/article/2011/08/26/rusal-idINLDE77P00C20110826

10:23am IST

MOSCOW, Aug 26 (Reuters) - Two partners in the world's top aluminium producer, UC RUSAL , want to sell their stake to a third tycoon, Alisher Usmanov, owner of an iron ore miner and shareholder in Norilsk Nickel , Vedomosti reported on Friday.

Viktor Vekselberg and Len Blavatnik, who merged their aluminium assets with RUSAL about five years ago, have offered the stake to Usmanov, the daily reported, citing three sources.

A source close to Usmanov was cited as saying the offer had only been made, while sources close to the sellers said Usmanov was close to agreeing.

The newspaper said En+, the investment vehicle of RUSAL's main owner Oleg Deripaska, had right of first refusal of its partners' stake, but it was not clear whether an offer was made to En+ before the start of talks with Usmanov.

The offer was based on a valuation of $25-$30 billion, an acquaintance of Blavatnik and Vekselberg told the daily.

The two businessmen, also partners in BP's Russia joint venture TNK-BP, are caught in a conflict between RUSAL and Norilsk Nickel over strategy and management at Norilsk Nickel, in which RUSAL owns 15 percent.

Usmanov owns four percent of Norilsk Nickel.

Before the 2008 credit crisis, Vekselberg and other RUSAL shareholders spoke in favour of a Russian mining mega-merger between RUSAL, Norilsk and Metalloinvest, which would create a rival to global powerhouse BHP Billiton .

The three mining giants were forced to retreat in the 2008 credit crisis, when a collapse in metals prices and a squeeze on credit forced RUSAL in particular to concentrate on debt restructuring.

But some analysts believe a merger is not out of the question now that the debt has been reduced and refinanced which would simplify merger valuations.

RUSAL has rejected offers by Norilsk Nickel, the world's largest nickel miner, to buy out the bulk of its stake and end the conflict. On Monday Norilsk made its latest buyout bid, a $8.75 billion offer for a 15 percent stake, a healthy premium. (Writing by Melissa Akin; Editing by Muralikumar Anantharaman)

Russian tycoon Usmanov may buy 15.8 pct stake in RusAlhttp://en.rian.ru/business/20110826/166194552.html

11:12 26/08/2011

MOSCOW, August 26 (RIA Novosti)

Russian tycoon Alisher Usmanov may buy a 15.8 percent share in aluminum giant RusAl from billionaires Victor Vekselberg and Leonid Blavatnik, Vedomosti business paper reported on Friday quoting sources close to the businessmen.

Oleg Deripaska's En + Group holds 47.4 percent in RusAl, Mikhail Prokhorov's Onexim owns 17 percent, Vekselberg and Blavatnik's SUAL Partners 15.8 percent, 8.75 percent belongs to Glencore's subsidiary Amokenga Holdings and 10.75 percent is in free-float.

The sources told Vedomosti without disclosing the stage of negotiations that Vekselberg and Blavatnik valued their share in RusAl at $3.95-4.74 billion.

Glencore CEO Ivan Glazenberg has said he did not rule out raising his company's share in RusAl, while Vekselberg has said he was not considering selling his stake.

Market sources have said RusAl was considering a secondary public offering to reduce its $11.4 billion debt burden by selling 7-10 percent of new shares.

RusAl officials said the existing shareholders did not plan to sell their stock and denied the possibility of an additional issue.

UPDATE 1-Russia's Severstal Q2 net misses forecasthttp://af.reuters.com/article/commoditiesNews/idAFLDE77O0HT20110826

Fri Aug 26, 2011 6:39am GMT

* Net income $602 mln vs Reuters poll forecast $641 mln

* EBITDA $1.11 bln vs f'cast $1.10 bln

* Revenue $4.38 bln vs f'cast $4.28 bln

MOSCOW, Aug 26 (Reuters) - Severstal , Russia's largest steelmaker, on Friday reported second-quarter net profit of $602 million, missing forecasts despite more than tripling last year's result on strong steel prices and divestitures.

The firm, controlled by billionaire chief executive Alexei Mordashov, has taken steps to rejig its international portfolio to reduce exposure to the U.S. and European steel markets and expand its mining operations.

Analysts surveyed in a Reuters poll had expected the company to post a second-quarter net figure of $641 million, up from $192 million last year.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) reached $1.11 billion, up from $995 million a year ago and ahead of the $1.10 billion poll forecast.

Second-quarter revenue was $4.38 billion, up from $4.25 billion in the year-earlier period and also greater than the $4.28 billion poll forecast.

Severstal also said it expects stable prices in the current quarter. "In Q3 2011, we expect steel prices to stabilize," the company said.

It did not provide any financial forecast in its outlook.

Severstal unit builds up stake in High River Gold

http://www.rbcnews.com/free/20110826104035.shtml

      RBC, 26.08.2011, Moscow 10:40:35.Nord Gold N.V., a gold producing subsidiary of Russian steelmaker Severstal, has bought a 1.44% stake in Canadian gold producer High River Gold Mines Ltd. with operations in Russia, bringing its equity position to

75.06%, the company said in a statement today. The value of the stake amounted to $15.78m.

      High River Gold Mines operates two gold mines in the Republic of Buryatia, one mine in the Amur Region, and a silver mine in the Republic of Yakutia.

August 26, 2011 10:52

MMK posts Q2 EBITDA of $380 mln, net profits of $13 mlnhttp://www.interfax.com/newsinf.asp?id=268560

MOSCOW. Aug 26 (Interfax) - OJSC Magnitogorsk Iron & Steel Works (MMK) (RTS: MAGN) closed out the second quarter with EBITDA (earnings before interest, taxes, depreciation, and amortization) of $380 million and net profits of $13 million, the company reported.

Sales revenues came in at $2.42 billion, higher than the $2.37 billion analysts had been expecting.

Cf

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

August 26, 2011 12:24

Acron IFRS net profits skyrocket 290% in Q2http://www.interfax.com/newsinf.asp?id=268594

MOSCOW. Aug 26 (Interfax) - The Acron (RTS: AKRN) group posted 2.956 billion rubles in net profits to International Financial Reporting Standards (IFRS) for the second quarter of this year, a 3.9-fold increase, the company reported.

Investment company and bank analysts surveyed by Interfax had forecast the company's net profits would weigh in at 3.2 billion rubles.

Acron's Q2 sales revenues were up 50% at 16.012 billion rubles (14.474 billion rubles forecast), and EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 110% to 4.5 billion rubles.

The company's net profits for the first half as a whole were up 170% at 6.77 billion rubles. H1 sales revenues rose 37% to 29.878 billion rubles and EBITDA doubled to 9.103 billion rubles.

Cf

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

Aegis Ready to Pay 100 Mln Euros for Master Ad, Kommersant Sayshttp://www.bloomberg.com/news/2011-08-26/aegis-ready-to-pay-100-mln-euros-for-master-ad-kommersant-says.html

QBy Marina Sysoyeva - Aug 26, 2011 6:33 AM GMT+0200

Britain’s Aegis Group is ready to buy 100 percent in OOO Master Ad, a Russian outdoor advertising agency, for as much as 100 million euros ($144 nillion), Kommersant said, citing the U.K. company.

The price is conditional on the agency meetings certain profit targets in 2001-2014, the newspaper said. The initial payment for the Russian company will be 15 million euros, it said.

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

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

Russia’s VTB, RenCap Add Bankers as Global Competitors Retreathttp://www.bloomberg.com/news/2011-08-25/russia-s-vtb-rencap-otkritie-hire-bankers-as-global-competitors-retreat.html

QBy Jason Corcoran and Ambereen Choudhury - Aug 25, 2011 10:21 PM GMT+0200

Russian investment banks VTB Capital, Renaissance Capital and Otkritie Capital are increasing headcount this year by as much as 38 percent and expanding abroad as global firms such as HSBC Holdings Plc (HSBA) and Goldman Sachs Group Inc. (GS) eliminate jobs.

VTB Capital, a unit of Russia’s second-largest lender, Renaissance Capital, the emerging-markets bank, and Otkritie, partly owned by Moscow-based VTB Group, are hiring in New York, London, Frankfurt, Kiev, Mumbai, Dubai, Hong Kong and Singapore. The expansion comes as Renaissance and Troika Dialog, acquired in March by OAO Sberbank, Russia’s biggest lender, compete with three-year-old VTB Capital to emerge as the nation’s top home- grown investment bank.

“Russian banks are flashing their checkbooks and capitalizing on the fact that many international firms have imposed unofficial hiring freezes,” Nick Rees, managing director of Moscow search firm Star Search, said by phone. “Candidates are drawn to Russian firms, which have lifted guarantees back to pre-crisis levels of up to $2 million for just director level.”

Western European securities firms and banks are cutting jobs after reporting declines in investment-banking profit as the continent’s sovereign debt crisis cripples trading. UBS AG (UBSN), Switzerland’s biggest bank, said this week it will pare about 3,500 jobs. HSBC pledged to eliminate 30,000 jobs by the end of 2013, while Zurich-based Credit Suisse Group AG (CSGN) said it will trim about 2,000 posts. In the U.S., Goldman Sachs said in July it will cut 1,000 jobs after a plunge in fixed-income revenue.

‘Huge Potential’

VTB Capital’s Atanas Bostandjiev, hired from Goldman Sachs in May to lead the brokerage’s push outside of Russia, said employment increased by 38 percent worldwide to 1,157 this year. The firm was started from scratch three years ago with the hiring of more than 100 bankers from Deutsche Bank AG in Moscow.

“We see huge potential for Russian companies to attract funds from local equity and debt capital markets” in Singapore and Hong Kong, Bostandjiev said in an e-mailed response to questions. Bostandjiev, 36, who is responsible for building the company’s Europe, Asia, Middle East and Americas businesses, expects to open a New York office soon, pending approval from U.S. regulators.

“VTB Capital wants to be a global investment bank just like Deutsche Bank and UBS succeeded,” Rustam Botashev, banking analyst and deputy head of research in Moscow at UniCredit SpA, said by phone. “But the investment banking game is getting tougher and tougher and the cost to the parent will be enormous if they are to achieve that ambition.”

Competition Heats Up

VTB Capital was the leading organizer of equity sales last year in Russia and the second-biggest underwriter of eurobonds last year behind London-based Barclays Capital, according to data compiled by Bloomberg. Makram Abboud, a managing director for Nomura Holdings Inc.’s emerging-markets team, will soon join to lead the bank’s Middle East expansion.

Competition has been heating up among the Russian investment banks as state-controlled lenders have pushed into the sector. Sberbank agreed to buy Troika Dialog for $1 billion in March. Troika’s local rival, Renaissance Capital, sold a 50 percent stake to billionaire Mikhail Prokhorov in 2008 for $500 million, 18 months after Renaissance rejected a $4 billion offer from state-run VTB Group, according to the Vedomosti newspaper. Otkritie hired at least 10 bankers from Renaissance last year, including oil analyst Alexander Burgansky.

‘Closing the Gap’

“Russia houses are closing the gap” with foreign banks said Yiannis Demopoulos, a London-based industry recruiter at Delta Executive Search. “But a single-market product like Russia can be difficult to monetize when you are marketing to international clients that may take a regional view.”

Otkritie Capital increased employment by 35 percent since January to 456 people in London, Frankfurt, Moscow and a new office in New York. Chief Executive Officer Roman Lokhov told reporters in May the bank is planning an initial public offering in 2013. After starting as a retail broker in 1995 and expanding into corporate finance three years ago, Otkritie was the biggest trader of futures and options on Moscow’s dollar-denominated RTS stock exchange in January and February this year, according to data compiled by the bourse.

“We are well on course to hiring 10 best-of-breed bankers for our midtown Manhattan office within the next six months,” Luis Saenz, chief executive officer of the U.S. unit, said by phone. “For early 2012, we will set our footprint in Asia by opening up a representative office in the region.”

RenCap’s Expansion

Renaissance Group increased its investment banking, asset management, real estate and private-equity headcount by 7 percent during the first six months to 1,250. The bank has made senior hires in India, Africa, New York and London over the past two weeks and will announce more soon, said Preston Mendenhall, a Moscow spokesman. Ateev Chadda was hired from Religare Capital Markets Ltd. on Aug. 10 as head of investment banking and financing in India and followed the additions in July of Jonathan Segal as global head of debt capital markets from Barclays Capital and James Etherington, previously at Morgan Stanley, as head of U.K. equity capital markets.

“This is a great time to scout for talent with many of the bulge brackets retrenching and bankers tempted by Russia’s 13 percent flat-tax rate, which compares to 50p on the pound in the U.K.,” Mendenhall said by phone.

‘Less Need to Overpay’

A boom in commodities, record numbers of IPOs, the fastest- growing economy in Europe and a lack of home-grown talent led domestic and foreign banks to pay premiums in 2007 to attract top bankers to Moscow in 2007 when dealmakers such as Ed Kaufman and Nicholas Jordan were paid $7 million and more a year to move to Alfa Bank and Lehman Brothers Holdings Inc., respectively.

“There is a greater pool of strong Russian finance professionals now so there’s less need to overpay for expats,” Delta’s Demopoulos said.

Investment banks have earned $863.4 million in fees from Russia so far this year compared with $832 million for all of 2010, according to estimates from New York-based research firm Freeman & Co. It’s largely been driven by fees earned from mergers and acquisitions amid a slowdown in income from arranging IPOs, the data show. The value of Russian M&A totals $50.4 billion so far this year compared with $79.8 billion last year and a record of $131.9 billion in 2007, data compiled by Bloomberg show.

Earnings Rise

VTB Capital’s Bostandjiev said the bank’s investment banking business earned 8.9 billion rubles ($310 million) in the first quarter this year, a 27 percent jump from the 7 billion rubles earned during the same period last year. Renaissance, Troika and Otkritie declined to detail their earnings.

Troika Dialog added four bankers this month, bringing global employment to more than 1,200. Chris Weafer was hired as chief strategist after just a month in a similar role at ING Groep NV. Olga Klimov came from UBS in New York as global head of equity sales based in Moscow and James Corrigan joined from VTB Capital for an investment-banking role.

The firm said this week it recruited Anton Malkov as director for equity capital markets from JPMorgan Chase & Co. A Troika Dialog spokeswoman declined to comment on hiring plans and the synergies from the merger with Sberbank, which agreed in July to buy nine banks in countries including the Czech Republic, Slovakia, Hungary and most of former Yugoslavia from Austria’s Oesterreichische Volksbanken AG.

Troika, VTB and other Russian investment banks are expanding amid signs the global recovery is faltering.

“VTB is trying to repeat what it did during the last crisis when it built a successful team from scratch by opportunistically grabbing talent,” UniCredit’s Botashev said. “I was cynical then, but it was a good call then and maybe it will work again.”

To contact the reporters on this story: Jason Corcoran at Jcorcoran13@bloomberg.net; Ambereen Choudhury in London at achoudhury@bloomberg.net

To contact the editors responsible for this story: Gavin Serkin at gserkin@bloomberg.net; Edward Evans at eevans3@bloomberg.net

Activity in the Oil and Gas sector (including regulatory)

Russia to raise oil export duty 1.3% from September

http://www.rbcnews.com/free/20110826111102.shtml

      RBC, 26.08.2011, Moscow 11:11:02.Russia's export duty on crude oil will increase to $444.1 per ton on September 1, up from the current $438.2, according to a resolution signed by Prime Minister Vladimir Putin and published today.

      The discount duty for some East Siberian fields will be at $205.1 per ton from September, up from $201 in August.

      The export duty on light oil products will be increased to $297.5 per ton on September 1 from the current $293.6 and the export duty on heavy oil products will go up to $207.4 per ton from the current $204.6. The duty on gasoline exports will be increased to $399.7 per ton from $394.4.

Russia to raise Transneft tariffs – paperhttp://in.reuters.com/article/2011/08/26/transneft-tariffs-idINLDE77P00N20110826

10:21am IST

MOSCOW, Aug 26 (Reuters) - The Russian government has agreed to increase tariffs on oil shipments handled by state-owned pipeline operator Transneft (TRNF_p.MM: Quote, Profile, Research) in order to fund investments, Vedomosti business daily said on Friday.

The newspaper cited sources in the company and the Federal Tariff Service, who said Transneft's tariffs -- its only source of revenue and an important item in the cost line for oil companies -- will be increased by 2.8 percent from September and a further 5 percent in November.

Transneft, which runs Russia's 50,000 kilometre-long network of oil pipelines, needs investment to implement ambitious projects, including a second phase of the East

Siberia-Pacific Ocean pipeline. (Reporting by Vladimir Soldatkin; Editing by Michael Urquhart)

Transneft: Pipeline tariffs may be raised 8% in September-November 2011

http://www.bne.eu/dispatch_text16429

UralSibAugust 26, 2011

Preliminary approval for two tariff hikes. Transneft (TRNFP RX - Sell) has received preliminary approval from the Federal Tariff Service for two increases in the crude pumping tariff in 2011: by 2.8% from 1 September and by 5% from 1 November, a total of 8%. Previously, no tariff changes were planned for 2011. Under the new tariff sched- ule, tariffs are to stay flat throughout 2012.

66/60 may weaken Transneft's case. A key reason behind Trans- neft's request is a lower than expected volume of crude moved through the system YtD, down 2% from planned volumes. However, this may increase, in our view, if the 66/60 export duty scheme is introduced from 4Q11, prompting oil companies to export more crude.

No change to our view on Transneft and the oil industry. Our view on Transneft remains unchanged, as first, its average tariff for 2011-12 will not increase under the new arrangement, and more importantly, its dividend and tariff policy will not be altered. For the oil industry, the move will have a limited impact on 2011 earnings and may slightly increase 2012 earnings. We have a Sell recommendation on Transneft.

Gas tariffs look set to rise 15%; We still see netback parity

http://www.bne.eu/dispatch_text16429

CitiAugust 25, 2011

2012 gas tariffs look likely to rise 15%, after all: Vedomosti is reporting that the government discussed the 2012 natural monopoly tariff plan in detail last week, with the final version likely to be signed in early September. Under the plan, gas tariffs would rise by a total of 15% next year, but tariffs for all other natural monopolies will rise only by

an inflation-level 5-6%. According to unnamed government sources quoted by Vedomosti, reasons for the gas price uptick are either as compensation to Gazprom for sharply higher gas extraction taxes next year (as yet not finalized, but probably a c100% increase), or because the government is committed to raising gas prices to netback parity as has long been planned. We think both reasons have elements of truth to them, but think the latter is the likely prime motivator.

Similar to Klepach's July plan: The currently approved tariff plan calls for three consecutive, annual 15% increases in 2012-2014, but had come under doubt this past Spring when Prime Minister Vladimir Putin ordered the government to consider limiting natural monopoly tariffs to only the inflation rate. However, the plan reportedly discussed last week appears to be similar to that put forth by Deputy Economy Minister Andrei Klepach in early July, which called for a 5% increase from January 1st and a further 9.5% increase from April 1st, or a 15% compounded rise for the year.

Netback parity still the target, we think: We were already assuming a two-step increase for 2012, including a 7.5% increase from January 1st followed by a 5% rise from July 1st, a total increase of 12.9% and an average y-o-y rise of a bit more than 10%. The plan under discussion would see the average tariff go up 12.5% in 2012, due to the step-wise increase, only modestly higher than our 10% average assumption. However, a 15% year-end on year-end increase - the exact level in the currently approved plan - would in our eyes be a strong indicator that government policy indeed remains dedicated to raising domestic gas prices to netback parity. This is especially so coming as it would in the run-up to Duma (December) and Presidential (March '12) elections: Dividing the increase into two steps, with the second occurring literally days after the Presidential elections, would provide only the thinnest of electoral fig leafs.

Positive for Gazprom and Novatek, of course: The possibility of inflation-only increases in gas tariffs earlier this year threatened to remove a very positive earnings driver for both companies. If anything, Novatek (NVTKq.L; US$122.80; 2M) is the more dependent of the two companies on ever-rising gas tariffs, as we believe that a good bit of that company's high valuation multiples stem from imbedded optimism on higher gas tariffs (Although only Gazprom is bound by the regulated tariffs, by extension this helps Novatek and the other independent producers, as in practice those companies cannot practically exceed Gazprom's prices.) With current tariffs near $95/mcm, and netback parity in an oil environment of $80/bbl above $170/mcm, the stakes behind the parity debate are large.

Ron Smith

08/25/2011 | 02:55 pm

BASF : Nord Stream Pipeline Connected to OPALhttp://www.4-traders.com/BASF-6443227/news/BASF-Nord-Stream-Pipeline-Connected-to-OPAL-13769553/

Last welding seam joining first Nord Stream line and European pipeline network complete

Pipeline system ready for next steps of commissioning

Lubmin, August 25, 2011. The direct link between the major Russian reserves in Siberia and the European natural gas market is in place: The first line of the Nord Stream Pipeline is now connected to the OPAL natural gas pipeline (Ostsee-Pipeline-Anbindungs-Leitung - Baltic Sea Pipeline Link). "The pipeline system is now ready for the next complex steps of bringing the pipeline on stream, which means we will be able to commission the first of the Nord Stream twin pipelines in the fourth quarter of 2011 as planned," Dr. Georg Nowack, Nord Stream AG project manager for Germany, explained. "The connecting pipeline OPAL, which will pick up the natural gas from Nord Stream and transport it onwards, is already complete," said Bernd Vogel, Managing Director of OPAL NEL TRANSPORT GmbH, a company of the WINGAS Group which will operate the connecting pipeline. "So we are ready. The Russian natural gas can come."

The last welding seam connecting the first line of the Nord Stream Pipeline and the OPAL pipeline was completed on the grounds of the natural gas transfer station in Lubmin near Greifswald, where the Nord Stream Pipeline reaches the German coast. Over 200 staff from regional and national companies are currently working on the 12-hectare piece of land near the Lubmin port preparing the transfer station for subsequent operations. Together the participating companies are investing around 100 million euros in Lubmin alone. In addition to OAO Gazprom, BASF subsidiary Wintershall Holding GmbH, E.ON Ruhrgas AG, Dutch company N.V. Nederlandse Gasunie and GDF SUEZ from France all hold a stake in Nord Stream. The WINGAS Group has an 80 percent share and E.ON Ruhrgas AG a 20 percent share in the connecting pipeline OPAL.

The OPAL natural gas pipeline was already completed more than a month ago. The pipeline has now been filled with gas and is ready to transport the Nord Stream gas onwards to the Czech Republic. A few days ago the first line of the 1,224 kilometre long Nord Stream Pipeline was connected at the landfalls in Russia and Lubmin. "The pipeline through the Baltic Sea has already been pressure tested, drained and dried and since August 22 completely filled with nitrogen, which serves as a safety buffer between air and gas," Nord Stream project manager Nowack explains. The next step is to gradually fill the pipeline with gas from Russia, and then the first line of the Nord Stream Pipeline will be ready for operation on time.

Other facts on the welding:

The pipeline section in Lubmin has a diameter of 900 millimeters (36 inches). Welding process: MAG welding with inert shielding gas (argon), semi-automatic.

Number of welded positions: eight (root, hot pass, 5 filler passes and a cap). The connecting weld seam has a total length of 2.8 meters. The entire welding process lasts about three hours. After the welding work, the seam is inspected by ultrasound for any possible

faults.

For more information please contact:

Steffen Ebert, Communications Project Manager Germany, Nord Stream AG

Mobile: +49 1520 456 80 53

E-mail: press@nord-stream.com

Gas pipeline link to Czech border completedhttp://www.ceskapozice.cz/en/business/energy-green-biz/gas-pipeline-link-czech-border-completed

Two strategic gas pipelines bringing Russian gas under the Baltic sea and through Germany to the Czech border have been connected

HOT TOP|Energy & Green BizChris Johnstone | 25.08.2011 - 19:06

The connection has been completed between a major gas pipeline running through Germany to the Czech border and the pipeline under the Baltic bringing Russian gas from Siberia, the companies behind the two ventures announced on Thursday.

The link between the Nord Stream under sea pipeline and the OPAL pipeline running 470 kilometres from the Baltic coast down the eastern German border to Olbernau on the German-Czech border forms part of strategic moves to diversify Russian gas export routes and avoid transit problems in the Ukraine and Belarus.

Russia cut off gas shipments to Europe via Ukraine at the start of 2009 following a row over payments for past supplies with Kiev, forcing European countries to take emergency steps and cut consumption. Similar disputes have erupted with Belarus.

A Czech pipeline, GAZELLE, is being constructed by the local gas unit of Germany’s RWE, Net4Gas, to link up with the OPAL pipeline with the prime aim of talking the gas further south. The GAZELLE link should be completed by the end of the year, the same deadline for Nord Stream being scheduled to become operational.

While the €400 million Czech pipeline should ship Russian gas southwards, it has been built so that the direction can be reversed if need be and used in connection with the ageing existing East-West pipeline that has previously brought most Russian gas through the Czech Republic.

26.08.2011

Kick-Off For Norwegian-Russian Double-Degree In Oil Technologyhttp://www.oilandgaseurasia.com/news/p/0/news/12655

Two Norwegian and Russian universities offer students a Master’s double-degree in field development technology. After graduation the students can work on both sides of the Barents Sea delimitation line.

The University of Stavanger (UiS) and the Gubkin Russian State University of Oil and Gas have jointly established a postgraduate program in offshore field development and technology that will give graduates diplomas from both universities, UiS’ web site reads.

The program will meet a growing need in the offshore industry for specialized expertise in offshore field development in cold regions.

"After graduation, students will have the opportunity to participate in both Norwegian and Russian projects", says Ove Tobias Gudmestad, professor in marine technology at UiS. "In the former disputed area there will be large joint projects they can take part in", he adds.

"I believe it’s important that Norway and Russia cooperate thoroughly when it comes to technology for the High North. For reasons of safety and security is important to work together. Moreover, according to delimitation agreement between Norway and Russia, if an oil field spans across the border, it has to be developed jointly by both countries", Gudmestad says.

Students will be taking courses both in Norway and in Russia – the first semester at their home university, the second in Moscow and the third in Stavanger. The fourth semester the students will be writing their post-graduate thesis in the town most relevant for their thesis.

The Norwegian Ministry of Foreign Affairs has allocated NOK 1.7 million to the project. The Russian part of the project is paid by large Russian oil and gas companies. So far no Norwegian oil companies have shown interest to support the project financially.

Copyright 2011, Barents Observer. All rights reserved.

4:33 23/08/2011OUR INTERVIEW

Russia seems to be getting more interested in the TAPI project - Pakistan Ambassador to China Masood KHANhttp://www.itar-tass.com/en/c38/209808.html

Andrey Evkin (ITAR-TASS, Beijing)

Interview of Ambassador Masood Khan of Pakistan to ITAR-TASS on Trans-Afghan Pipeline

- How does Islamabad see the current perspectives for the participants of Trans-Afghan Pipeline /TAPI/ project to reach the common view on time and conditions of putting in

- The prospects of TAPI have improved in the recent past. During the December Summit in Ashgabat last year, an inter-governmental agreement on TAPI was signed. Pakistan, Afghanistan and Turkmenistan have always been keen to start and complete this pipeline. It can be the new Silk Road or a peace pipeline between Central Asia and South Asia. Now the US, India and Russia also seem to be getting more interested in the project. So, in terms of political will the critical mass is there. The time should be ripe by 2012 to start this project.

- What the main problems now of implementation the TAPI agreement?

- Security of this pipeline must be ensured. Therefore, as this project proceeds, we should work for creating conditions of peace and security in the three countries, but especially in Afghanistan. The financing issues should be amenable to resolution. All participants should remove strategic underbrush to allow this project to take off as it will benefit the entire region and enhance connectivity between South and Central Asia. The project in particular will make immense contribution to Turkmen, Afghan and Pakistani economies and create new jobs and technological platforms in the region. It will also enhance energy security of the region.

- It is well known that India strongly opposes China’s participation in the project (construction etc.). So who, according to Pakistani side opinion, is most likely to be the primary subcontractor of the project?

- We would welcome China’s participation in the construction of the pipeline. China has valuable experience in this field in Central Asia and Chinese corporation has worked for decades in Pakistan. These things have yet to be discussed, but we understand that ADB has encouraged such a role by China. We think that there should be no opposition to

China participation from any quarter because we are all working for win-win partnerships. The project spinoffs will benefit all nations including India.

- What are the main guarantees of security the sides need to put the TAPI project in practice?

- Guarantees for security would be assured by the determination by all major players that their interests converge in case of TAPI. This will make the project a unifier. Local communities should be given incentives to participate in the defense of the pipeline. Besides, security personnel in adequate numbers have to be deployed along the pipeline route.  For Pakistan the project is very important. It will help meet some of our energy requirements expected to reach 200 million toe by 2020. It will also turn Pakistan to a gateway to Central Asia.

- Do the sides have the common view on the question of the final gas price now?

- The total cost is estimated at around US $ 8 billion approximately but pricing has yet to be finalized.

LUKOIL could face a USD 230mn lawsuithttp://www.bne.eu/dispatch_text16429

VTB CapitalAugust 26, 2011

News: The American Arbitration Association has ruled to levy USD 230mn from Getty Petroleum in favour of American ethanol plant Bionol Clearfield for violation of contract signed back in 2007. Getty Petroleum, a retail network with 900 fuelling stations in the USA, had been under LUKOIL's control since 2000 before it was sold in late February 2011.

Our View: Even in a worst case scenario, in which LUKOIL is found liable for this lawsuit, the impact on the company's 2011F EBITDA would not be material (around 1%). We do not think there is sufficient information at this stage for the news to affect the stock price in the short term.

TNK-BP to replace the Head of Upstreamhttp://www.bne.eu/dispatch_text16429

VTB CapitalAugust 26, 2011

News: According to Interfax, the Head of Upstream at TNK-BP, Sergey Brezitskiy, is to leave the company as of 1 October. Interfax reports that he is to be replaced by Alexander Dodds, previously the Head of ExxonMobil Qatar.

Our View: To a large extent, TNK-BP's excellence in financial and operational management relies on a significant improvement in the Upstream investment management, and Brezitskiy has been very in his role. Replacing a key manager is a challenging task for the company's management, particularly in the current anything but simple circumstances (and might possibly even affect production, especially given that TNK-BP is currently flirting with a production decline). However, we do not expect the market to show any significant reaction to this news.

TNK-BP brings Kulaginskoe field in Orenburg region on streamhttp://www.istockanalyst.com/business/news/5380751/tnk-bp-brings-kulaginskoe-field-in-orenburg-region-on-stream

Friday, August 26, 2011 3:44 AM(Source: Datamonitor)Sorochinskneft oil and gas production unit, a part of the TNK-BP group of companies, has brought the Kulaginskoe field with reserves of around one million tons on stream in August 2011.

According to Arkadiy Popov, head of the field development section at Sorochinskneft, trial production is now underway in Well No. 1 with an initial flow rate of 30 tonnes per day, in order to evaluate the well's production potential and draw up a future development strategy for the field, the company said.

The Kulaginskoe field, which is located in the Novosergievskiy district of Orenburg region, was acquired in March 2011 and currently has in-place reserves of 929,000 tons.

TNK-BP is pursuing an investment program in Orenburg region and is planning to devote over $900 million to developing local infrastructure in 2012, the company added.

A service of YellowBrix, Inc.

Gazprom

Gazprom is asked for a discount by Turkey http://www.bne.eu/dispatch_text16429

VTB CapitalAugust 26, 2011

News: According to RBC-Daily, Turkey is demanding a decrease in gas prices on the grounds that Gazprom gave a discount to Italian Edison Company.

Our View: Arguing with Gazprom about the gas pricing formula has become fashionable of late, with more and more companies weighing in. Now Turkey has joined the affray. We remind investors that Turkey accounted for 12% of Gazprom's European gas deliveries 2010 and therefore a discount for it might have a significant effect on the company's financials. Moreover Turkey is a strategic partner of Gazprom in the South Stream Pipeline project and so assessing the ramifications is difficult. At this stage, though, we believe that the news is neutral.

Dmitry Loukashov

Gazprom Clients Must Admit `Mistake,' Komlev Says http://www.bloomberg.com/video/74451352/

Aug. 26 (Bloomberg) -- Sergei Komlev, head of pricing and contract formation at OAO Gazprom's export division, discusses Russian gas prices and the role of the spot market as European utilities seek to adjust gas-purchase contracts. Komlev spoke with Bloomberg's Anna Shiryaevskaya on Aug. 18 in Moscow. (Source: Bloomberg)

Gazprom Defends Oil-Price Link, Says Gas German Customers Made ‘Mistakes’http://www.bloomberg.com/news/2011-08-25/gazprom-defends-oil-link-says-gas-customers-made-mistakes-.html

QBy Anna Shiryaevskaya - Aug 26, 2011 1:00 AM GMT+0200

OAO Gazprom said it’s not responsible for its customers’ “strategic mistakes,” signaling Russia’s gas-export monopoly may not compromise in its pricing dispute with European utilities.

Buyers are demanding “one-off help, given the difficult situation they found themselves in because of the failure of their gas sales campaign,” Sergei Komlev, head of pricing and contract formation at Moscow-based Gazprom’s export division, said in a interview at his central Moscow office.

EON AG and RWE AG, Germany’s biggest utilities, have sought to change terms for gas purchases from Gazprom to weaken the link with crude oil prices. The companies have lost hundreds of millions of dollars in the last year after they had to sell gas at less than it cost to supply it.

Europe depends on Gazprom for about a quarter of its gas, most of which is shipped through pipelines under long-term contracts, and Germany is Gazprom’s biggest market outside the former Soviet Union. Gazprom and its German customers have agreed to arbitration to resolves their dispute.

Importers are asking for “a very big discount,” Komlev said in an interview at Gazprom Export’s headquarters in Moscow. He declined to discuss any specific customers or the arbitration process. Lowering prices would in essence mean linking gas prices to a benchmark other than oil, he said.

Gazprom indexes its prices to oil with a lag of as long as nine months and expects to maintain that link as the dominant pricing factor in its contracts, he said. The exporter last year agreed to give some weight in the pricing formula to short-term gas prices.

‘Deep Connection’

“We think a deep connection between oil and gas prices has remained and even grown stronger,” Komlev said.

Gazprom’s customers disagree and have sought arbitration.

“Today, the wholesale pricing is regarded as independent from the oil-price indexed long-term gas contracts,” RWE spokeswoman Annett Urbaczka said in an e-mail. EON spokesman Adrian Schaffranietz said contract pricing should reflect the “growing importance of trading markets.”

Gazprom’s average gas price under long-term contracts in Europe is now at about $440 to $450 per 1,000 cubic meters, Komlev said. The price is expected to average $400 this year, compared with $306 last year.

Gas for next-month delivery at the Title Transfer Facility, the Dutch hub, traded at 22.95 euros a megawatt-hour yesterday, compared with about 18 euros a year-earlier, according to broker data compiled by Bloomberg.

‘Sell Cheaply’

“Some of our partners expected they’d be able to sell gas to their clients cheaply by mixing Russian and spot gas, which turned out to be wrong,” Komlev said. “The first thing our clients have to do is admit the mistake they have made during the sales campaign of 2010. The general market obsession with low spot prices has proved to be a wrong strategy.”

Europe can no longer abide a two-tier system, with the gap between long- and short-term gas pricing, GDF Suez SA Vice Chairman Jean-Francois Cirelli said in May, speaking as head of the Eurogas industry group.

Gazprom is holding “commercial consultations” with customers including EON Ruhrgas, RWE, GDF Suez and Eni SpA, according to a report on the company’s web site.

“The formula Gazprom uses in Europe is starting to get old,” Artem Konchin, an oil and gas analyst at UniCredit SpA said by phone. “In 20 to 30 years, the market will be absolutely liquid and mobile and may resemble the oil market.”

Patterns Diverge

The connection to oil markets may weaken in the “long term” as supply patterns diverge, according to an article in Gas Industry Journal’s August edition, co-written by Vlada Rusakova, head of strategy at Gazprom.

European customers expected spot prices to remain low when they were signing one- or two-year contracts with clients last year, Komlev said.

EON, which this month reported its first quarterly net loss in 10 years, earlier this year sought to change the contract formula to as much as a 100 percent spot indexation, two people with knowledge of the matter said in February. Komlev said at the time that Gazprom wouldn’t agree to the request.

RWE in April sought to “reach adjustments” allowing it to sell gas profitably in a “structurally changed market,” CEO Juergen Grossmann said. Germany’s second-largest utility expects arbitration with Gazprom to yield results in 2012 or 2013.

Spot rates, which had fallen as the global economic contraction left hubs with unwanted volumes, started to increase in August 2010, meaning Gazprom’s partners sold fuel to their clients at lower-than-market rates, Komlev said.

Seasonal Demand

The gap between spot and contract prices isn’t as “gigantic” as it was in the past two years and will narrow “closer to winter” because of seasonal demand, he said.

Japan’s nuclear disaster in March, which led Germany to speed up its exit from atomic power, diverted some gas volumes to Asia, supporting demand and prices in Europe.

For European buyers, “the most critical phase has started, because it coincided with some companies’ closure of nuclear power plants,” Komlev said. “If some partners are now seeing problems, it’s in no way connected to the price for Russian gas.”

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

26.08.2011

Wintershall Creates New "Russia" Board Departmenthttp://www.oilandgaseurasia.com/news/p/0/news/12651

The top management at Wintershall is acquiring additional support: the Board of Executive Directors of Wintershall Holding GmbH is currently being expanded from four to five board departments and Mario Mehren, currently a division head at Wintershall, will take over the new position from 1.10.2011.

The company's Russian activities will be transferred from their current board department, "Finance & Russia", and merged within the new "Russia" board department. The new board department will be based in Moscow. "The expansion of the board to include a special board department for Russia reflects the great importance our Russian activities and cooperation with Gazprom have taken on," Dr. Rainer Seele, Chairman of the Board of Executive Directors, explained: "I am therefore particularly pleased that a senior manager from within our own ranks, Mario Mehren, has been appointed to this position."

The 40-year-old graduated in business administration and has been at Wintershall since 2006 as Vice President Finance & Information Management. In this role he worked in the "Finance & Russia" board department under the leadership of Dr. Ties Tiessen. Mehren is already on the supervisory board of Russian Wintershall joint ventures and played a key role in the recent expansion of the cooperation with Gazprom. Before that he worked for BASF for several years, in Ludwigshafen, Schwarzheide and as managing director in Chile. Dr. Ties Tiessen has been on the Wintershall Board of Executive Directors since February 2005. In April 2010 he took over the Finance board department, and the Russian activities of the Wintershall Group at the time were integrated into this department to form "Finance & Russia".

In addition to Wintershall's existing shareholdings in Russia - Yuzhno Russkoye, Achimgaz and Wolgodeminoil - and in the Nord Stream Baltic Sea Pipeline, further major projects with Gazprom have been launched recently: its stake in the construction of the offshore section of the South Stream gas pipeline through the Black Sea and the joint development of two additional blocks of the Achimov formation of the west Siberian Urengoy field. As a result of this expansion of the company's Russian activities, these will now be merged together in a special Russia board department.

Alongside the Chairman of the Board, Dr. Rainer Seele, Martin Bachmann (Exploration

& Production), Dr. Ties Tiessen (Finance), Dr. Gerhard König (Natural Gas) and Mario Mehren (Russia) belong to the Wintershall Board.

Copyright 2011, Wintershall. All rights reserved.