Russia 110114

Basic Political Developments Russia celebrates "Old" New Year The Russian president will transported by helicopter to Jericho - . The Russian

side has assumed formalities with the security forces of Israel, in particular with the border guards than had to deal with the Israeli Foreign Ministry. According to Kommersant, Dmitry Medvedev will travel to Jericho by helicopter to the Jordanian territory. A large Russian delegation will be able to move into Palestinian territory by car - from the Jordanian capital Amman to Jericho through the border crossing, "Allenby" only 65 km.

Mahmoud Abbas: We are certain that the UN will recognize the independence of the Palestinian State - Head of the Palestinian National Authority Mahmoud Abbas gave an interview to Interfax correspondent Andrei Baranovsky ahead of the first visit to Palestine by Russian President Dmitry Medvedev

Duma votes on START amendment -   341 lawmakers voted in favor of adding five more provisions to the original text on the ratification of the treaty. No one voted against, and there were no abstentions.

o State Duma approved an amendment to the terms of the RF output from a new strategic arms reduction treaty.

o RUSSIA TO REACH NEW START CEILINGS FOR WARHEADS BY 2018, FOR DELIVERY VEHICLES - BY 2028 - SERDYUKOV

o Russia will not cut a single unit of its strategic offensive arms in excess of the limits on a new treaty on strategic offensive arms - Anatoly Serdyukov

o State Duma to discuss changes to START treaty ratification - The new additions focus on grounds for Russia's withdrawal from the treaty and the president's obligation to adopt a program for the development of Russia's strategic nuclear forces.

Gibbs and Russian spar on freedom - Into this somber atmosphere stepped correspondent Andrei Sitov – of Russia’s official news agency ITAR-TASS – who passionately demanded to know if the shooting of Rep. Gabrielle Giffords (D-Ariz.) and murder of six people on Saturday was a byproduct of excessive personal freedom.

o Don't Call Killer's Actions 'American,' Gibbs Tells Russian Reporter - There is nothing "American" about the "deranged actions of a madman" who would kill six people and shoot another 13 at a Tucson strip mall on a Saturday morning in January, White House spokesman Robert Gibbs sternly told a Russian reporter today at the White House.

Russia works on new energy doctrine -    According to Security Council Secretary Nikolai Patrushev, the new doctrine will stipulate better coordination in ensuring the country’s energy security and will serve to guarantee sustained energy supply even in case of emergency, revamp oil and gas processing facilities and transform Russia into one of the top economically and politically developed nations.

Poland may ask for international probe into presidential plane crash o Polish President goes with government's assessment of plane crash report

o Polish President finds errors in Kaczynski plane crash investigationo Russian Smolensk committee ‘political tool’ - Kaczynskio Polish Crash Widow Slams Moscow o Crash report angers Poles and shakes ties with Russia

E. Nalbandyan: Armenian, Russian and Azerbaijani FM-s meet on January 24 Two Armenian honorary consuls out of job - Armenian Foreign Ministry did not

extend terms of office of Armenian honorary consuls in the city of Vladivostok and Volga Region of Russia.

Territory settlement 'impossible' now: Russia - The Russian official said that "good will" on the Soviet side was behind the agreement included in the declaration and that Russia finds no reason to return the islands as long as a peace treaty is not in place.

Court to hand over verdict copies to Khodorkovsky defense Russian sailors refuse to vacate arrested ship without salary Number of top Russian officials on trial for corruption doubles Russian police tell Internet provider to remove controversial interactive ad -

Police in Russia's Far East requested Internet provider Alyans-Telekom in Vladivostok on Friday to remove from its site a banner that would allow visitors to shoot at the Kremlin as well as at an animated character similar in appearance to Russian President Dmitry Medvedev.

Homeless man attempted suicide in Dmitry Medvedev’s waiting room Russian icebreakers continue rescue efforts in Okhotsk Sea Russia’s Shmakov re-elected FITUR chairman Vehicles trapped on snow-covered pass in Magadan Reg Central Election Commission to broadcast meetings online Head of village administration killed in Dagestan Russian Press at a Glance, Friday, January 14, 2011 Ishmailov gave Vekselberg his rights for building the largest hotel in Sochi Nezavisimaya: A shovel is better than GLONASS Kommersant: The Young Guard’s word is being put to the test - Human rights

activists suspect the organization of extremism Aleksandr Chernykh Rossiskaya Gazeta: Who will enter orbit next? - Starting in 2013, three space

tourists will be able to annually travel to the ISS Natalia Yachmennikova Putting the Bout into Khodorkovsky - The Man Who Launched the Hunt for

Arms Trader Viktor Bout Also Had Mikhail Khodorkovsky in his Sights Fragile Freedoms - A New Report Says Russia's Fundamental Economic

Freedoms Remain Shaky and Could Derail Government Plans to Modernize and Diversify the Nation’s Economy

Lunev case: abduction of FSB radio operator

National Economic Trends Russian imports from non-CIS countries up 36% at $197 bln in 2010 – FCS Russia's Jan-Nov trade surplus up 24% to $147.6 bln TABLE-Russia monetary base hit 5.91 trln rbls Russia: grain export absence is not only the negative role, but also the positive - ,

a lot of producers during the slack period started worrying about the applied

agrarian technologies during agricultural commodities growing, effecting grains quality a lot. And first of all, it is soils fertility issue, on which depends not only yield, but also gradity of grown wheat. Some producers started applying new technologies, and finally may receive grain harvest volume increase till the level of 30%.

Business, Energy or Environmental regulations or discussions Uralkali, Mechel, Polyus Gold: Russian Stock-Market Preview Micex starts trading in Belarus's bonds Russian IPOs: a cheat sheet for investors - by Courtney Weaver Palladium to Jump on Auto Sales, Russia, Ikemizu Says (Update1) VimpelCom, Wind to Review New Deal This Weekend, Vedomosti Says Vimpelcom board to review Sawiris deal Sunday-papers Russia's Inter RAO to buy Nortgaz for $1.5 bln – paper Russian Railways assesses controlling stake in Freight One RZD values 75% of Freight One at $5 bln-$6.5 bln (Part 2) Foreigners Eye Moscow Airport Rosatom to energise market with debut loan Sedmoi ‘to Buy’ Mosmart Aeroflot to spend $10 million on free tickets for victims of December flight

delays Russia: Light vehicle market expands 30% in 2010 Prosperity Capital Management buys 5.64% in RGI developer - paper U.S. grain distributor Cargill said its profit more than tripled, reaching $1.49

billion, in the three months ending Nov. 30, up from $489 million a year earlier, thanks to the company’s quick work to meet Egyptian demand for wheat imports with European Union grain after a drought curbed supplies from the Black Sea region. (Bloomberg)

Raspadskaya said in an e-mailed statement Thursday that raw coal output slumped 32 percent to 7.16 million tons last year, with fourth-quarter production at 1.27 million tons, an increase of 15 percent from the previous three-month period. (Bloomberg)

City Hall is seeking to sell its 22.32 percent stake in oil producer and refiner Sibir Energy, valued at an estimated $900 million, and is starting talks with Gazprom Neft, which controls Sibir, Kommersant reported, citing unidentified sources. (Bloomberg)

Uralkali, Russia’s largest potash producer, said its trader Belarusian Potash agreed to a six-month supply accord with China to deliver 600,000 tons of the crop nutrient at $400 a ton, including freight, with an option for 120,000 additional tons, Uralkali said Thursday in a regulatory statement. (Bloomberg)

LUKoil said in a statement Thursday that oil output fell to 96 million tons last year, while gas output rose more than 12 percent to 20 billion cubic meters. (Bloomberg)

Activity in the Oil and Gas sector (including regulatory) Russia's Transneft Q3 net down 15 pct, revenues up CEO: Transneft May Acquire Vankor-Purpe Pipeline in Kozmino Trade Transneft Blasts $4Bln ‘Information Campaign’ Russia presents new draft of Samsun-Ceyhan agreement to Turkey - Transneft Burgas-Alexandroupoli project still on – Transneft TNK-BP May Halt Ukraine’s Linik Refinery, Zerkalo Nedeli Reports Losses Could Suspend Operations at LINIK Refinery in Ukraine Norway’s $186 Billion Gas Loss to Cement Russian Grip on Supply Russia to draft program for Arctic shelf exploration by 2012 LUKOIL BOARD OF DIRECTORS SUMMARIZES COMPANY’S

PERFORMANCE IN 2010 AND SETS PRIORITIES FOR 2011  

Gazprom Gazprom, Rosneft negotiate joint shelf projects

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

Full Text Articles

Basic Political Developments

Russia celebrates "Old" New Yearhttp://english.ruvr.ru/2011/01/14/39652534.html

Jan 14, 2011 00:48 Moscow Time

Here in Russia we have just had a second opportunity to celebrate the New Year, which falls on January 14 according to the old Orthodox calendar.

This “Old New Year” is celebrated also in Moldavia, Armenia, Belarus, Kazakhstan, Uzbekistan, Georgia, and also in Serbia, Montenegro, Macedonia and Greece.

The Russian president will transported by helicopter to Jericho

http://www.kommersant.ru/doc.aspx?DocsID=1565834GOOGLE TRANSLATION

Kommersant »№ 2 (4543) on 01/12/2011

Despite the failure of his visit to Israel, President Dmitry Medvedev is not going to cancel a scheduled Middle East tour - January 18-19, he will visit Jordan and the Palestinian Authority. At present the study of details visit the Russian leader in Palestine, where Dmitry Medvedev will visit the city of Jericho, celebrates its 10 th anniversary of its establishment. As confirmed yesterday, "b" in the Russian Embassy in Tel Aviv, the Israeli Foreign Ministry refused to assist in the preparation of the visit of President Medvedev on the territory of the Palestinian Authority. However, according to Press Secretary of the Embassy Anton Chermensky, irreducible complexity is not caused. The Russian side itself has assumed formalities with the security forces of Israel, in particular with the border guards, than had to deal with the Israeli Foreign Ministry. According to Kommersant, Dmitry Medvedev will travel to Jericho by helicopter to the Jordanian territory. A large Russian delegation will be able to move into Palestinian territory by car - from the Jordanian capital Amman to Jericho through the border crossing, "Allenby" only 65 km.

January 13, 2011

Mahmoud Abbas: We are certain that the UN will recognize the independence of the Palestinian Statehttp://www.interfax.com/interview.asp?id=214805

Head of the Palestinian National Authority Mahmoud Abbas gave an interview to Interfax correspondent Andrei Baranovsky ahead of the first visit to Palestine by Russian President Dmitry Medvedev

Question: Mr. Abbas, how do you see Russia’s role in the Middle East conflict resolution and how important is Russian President Dmitry Medvedev’s visit to the Middle East for the peace process?Answer: Russia is a great country, it is a permanent member of the UN Security Council and one of the founders of the United Nations formed after World War II which saw the defeat of Nazism and Fascism. Since the Soviet period up until the present day Russia has played a crucial role in the Middle East where Russia’s presence has enormous significance. Russia seeks to implement the provisions of the UN Charter, to implement the resolutions renouncing aggression and firmly defending peoples’ rights to self-determination, which primarily concerns our Palestinian people who have been under the longest and most cruel settlement occupation in modern history.Russia led by its current leaders is seeking to advance the peace process, and is doing so at various levels, both personal and in the framework of the Middle East Quartet and through various international organizations. We fervently welcome the visit to Palestine by President Medvedev who will be a dear guest for me and for all our people. We are totally confident that this historical visit will become a great contribution to the efforts to establish fair and lasting peace securing our people’s right to self-determination and to the creation of its own independent state with the capital in East Jerusalem. Q.: What is your assessment of the contacts between Russian officials and Hamas figures? Do you believe such contacts facilitate the settlement of intra-Palestinian differences and improve relations between Hamas and Fatah?

A.: Like us, the Russian government is trying to put an end to the split weakening of the Palestinian position and to hold a dialog with Hamas by convincing them to sign the document prepared by [our] Egyptian brothers. We are calling for the same, and our Russian friends work in full coordination with us and at all levels. We are aware of the issues being discussed between Russian officials and Hamas representatives, and we support such a discussion, we agree with it and we hope that the sincere efforts by Russia and other regional parties interested in a fair solution to the Palestinian problem and having no motive other than the termination of the intra-Palestinian split will lead to the formation of the national unity government of independent figures who will be liable to conduct presidential and parliamentary elections in Palestine so that the Palestinian people choose their leaders and manifesto. Q.: Which steps in your view should be taken to improve the relations between Hamas and Fatah? A.: The first step, like I already said, is the signing of the Egyptian document, which the Fatah movement has already done. Then the national unity government will be formed of independent figures – economic experts, and then the lifting of the blockade of the Gaza Strip and preparation for the presidential and parliamentary elections. Q.: In which nearest time period do you think an agreement can be reached with Israel over the supply of Russian APCs to Palestine? And what matters should be resolved for this with Israel? A.: There is no problem with the time period, but there is a problem with Israel‘s abandoning all of its promises, with its totally unmotivated abandoning of its own resolutions. Such a controversial Israeli position has puzzled us, our Russian friends, as well as Americans, because there is virtually no reason for such refusal by Israel that is still not letting APCs pass through. Similarly, Israel is refusing to let assault rifles and ammunitions pass through for our security forces. Q.: Russia has expressed its willingness to continue to supply special equipment to Palestine. What sort of special equipment are we talking about here?A.: We are talking about APCs (armored personnel carriers). We reached an agreement over the specifics and type of weaponry on these APCs with the previous Israeli government under Ehud Olmert, then Tsipi Livni, however, the agreement was not implemented. And now, under the new government led by Netanyahu, this matter and many others have been either frozen or simply abandoned by the Israeli government.Q.: There were earlier reports about your plans to seek the UN recognition of the Palestinian state within the 1967 borders in the event of failed talks with Israel. When could Palestine turn to the UN with such a demand?A.: We are currently working to ensure that the Security Council adopt a resolution (based on multiple previous resolutions) which would renounce the settlement process and recognize the independence of all Palestinian territories occupied in 1967, including East Jerusalem. We are maintaining political and diplomatic contacts with various countries in order to receive their recognition of our Palestinian state within the June 4 borders, and recently we received such recognition from a number of Latin American countries. If such a resolution cannot be adopted by the Security Council, we intend to refer this matter to the UN General Assembly.

Q.: How likely in your view is the success of such a referral to the UN General Assembly? Do you expect the Palestinian state to be recognized by the leading powers and to finally settle its relations with Israel? A.: All great powers, including the United States, not only agree to it, moreover, it was them who have proposed the road map which stipulates the end to the Israeli occupation committed in 1967 and the creation of a viable, geographically united Palestinian state. Russia, China, the European Union and many other nations have repeatedly supported the creation of the Palestinian state by dismissing and condemning Israel’s settlement policy, this was shown by the results of the voting at the UN General Assembly when the overwhelming majority of nations supported the rights of our Palestinian people… Moreover, quite a significant part of the Israeli people support peace and the two-state solution. Since the Israeli government continues to persistently ignore the resolutions of international legitimacy, we will have to apply with the UN General Assembly and we are confident of the success of such a step, thanks to the broad international support for efforts to create an independent Palestinian state. We are also convinced that the end to the occupation is nearing, and it cannot last forever. Q.: How do you assess the refusal by the United States to put pressure on Israel to stop the settlement activity? How efficient in your view is the role of the Barack Obama administration in the Israeli-Palestinian conflict resolution process? A.: Everyone knows that the United States failed in its bid to convince the Israeli government to put at least a three-month freeze on settlement construction, and Israel‘s persistence has shown how necessary it is to add international efforts to those of the U.S. in order to discontinue the Israeli settlement policy and its most dangerous component, the things that are occurring in the occupied East Jerusalem. President Obama and the U.S. administration continue making efforts, but they keep encountering two obstacles: the persistence of the Israeli government, on the one hand, and the influential pressure from certain pro-Israeli forces in the U.S. Congress. We are convinced that to reduce the internal pressure on the U.S. administration it needs strong international support so that we could exit the current situation of stagnation.

Duma votes on START amendmenthttp://english.ruvr.ru/2011/01/14/39693586.html

  Jan 14, 2011 12:35 Moscow Time

Russia’s State Duma voted on an amendment to the Russian-US strategic arms reduction deal in the second reading of a draft law on the ratification of the treaty earlier in the day.

  The amendment came in response to a ratification resolution passed by the US Congress and contains Russia’s reservations regarding the treaty.

   341 lawmakers voted in favor of adding five more provisions to the original text on the ratification of the treaty. No one voted against, and there were no abstentions.

    The newly added provisions stipulate the conditions under which the treaty will be ratified and the circumstances under which Russia could pull out of the pact. 

State Duma approved an amendment to the terms of the RF output from a new strategic arms reduction treaty.

http://www.rbc.ru/rbcfreenews/20110114115303.shtmlGOOGLE TRANSLATION

14.01.2011, Moscow 11:53:03 Duma during the second reading a bill on ratification of the new Russian-US Treaty on Strategic Arms Reduction Treaty (START) has unanimously endorsed the amendment that stipulates the right of Russia's withdrawal from the treaty if there are exceptional circumstances that put in jeopardy its supreme interests. According to the amendment, one of those circumstances would be a material breach of U.S. obligations under the START treaty, which can lead to threats to national security of Russia. The paper also found such a condition as the deployment of the United States to another state or group of States a missile defense system that could substantially reduce the effectiveness of strategic nuclear forces of Russia. Russia also may withdraw from the treaty if the U.S. capacity to other state or group of START or their decision-making in the field of military construction, as well as of other circumstances that may endanger the national security of the Russian Federation. Obstacle to further Russian participation in the agreement will also deploy the U.S., other countries or groups of weapons, preventing the functioning of the Russian system of missile warning, the document said. As follows from the text of the amendment, in the event of such circumstances, the Russian president may try to take political, diplomatic and other measures to eliminate or neutralize their effects. He is also obliged to hold immediate consultations with the parliament and in the light of their results to decide on the prospects for further Russian participation in the treaty on strategic offensive arms. In turn, initiate such consultations as may be, and the Russian parliament, or at least give the president of Russia in this respect its recommendations.

11:39RUSSIA TO REACH NEW START CEILINGS FOR WARHEADS BY 2018, FOR DELIVERY VEHICLES - BY 2028 - SERDYUKOVhttp://www.interfax.com/news.asp

Russia will not cut a single unit of its strategic offensive arms in excess of the limits on a new treaty on strategic offensive arms - Anatoly Serdyukov

http://www.prime-tass.ru/news/0/%7BAEEC9ADA-44E3-43F2-96A5-5E5FCC5339D5%7D.uif

MOSCOW, January 14. Itar-Tass. Russia will not cut a single unit of its strategic offensive arms in excess of the limits on a new treaty on strategic offensive arms. Defense Minister Anatoly Serdyukov said today, according to ITAR-Tass, in the State Duma during the second reading of the law on ratification of a new strategic arms reduction treaty. "Not a single unit will be cut. We are in all respects relating to the media, reaching the level established by treaty, by 2028, and in warheads - 1550 units, to - 2018", - said the head of the military department, responding to the question of MP of the Communist Party faction, will Russia during the execution of the contract to have the strategic nuclear forces necessary for national security. 14.01.2011 11:51

State Duma to discuss changes to START treaty ratificationhttp://en.rian.ru/world/20110114/162137943.html04:07 14/01/2011

Russia's lower house of parliament, the State Duma, will consider on Friday in the second reading a draft law on the ratification of a new arms reduction deal with the United States.

Russian lawmakers added a number of provisions to the original text after the approval of the first draft on December 24.

The new additions focus on grounds for Russia's withdrawal from the treaty and the president's obligation to adopt a program for the development of Russia's strategic nuclear forces.

Grounds for withdrawal will include violation of the START treaty by the United States, the unilateral deployment by the U.S. of missile defense systems endangering Russia's national security, and the adoption of strategic non-nuclear weapon systems by the U.S. without Russia's consent.

The new treaty, replacing the START 1 that expired in December 2009, was signed in Prague last April by Russian President Dmitry Medvedev and U.S. President Barack Obama. The document slashes the Russian and U.S. nuclear arsenals to a maximum of 1,550 nuclear warheads, down from the current ceiling of 2,200.

The U.S. Senate ratified the deal on December 22, but added several amendments to the resolution on ratification, including a demand to build up U.S. global missile defenses.

By introducing their own amendments to the ratification law, the Russian lawmakers want to ensure the parity of the treaty.

The new strategic arms reduction agreement will come into force after ratification by both houses of the Russian parliament, the State Duma and the Federation Council.

The third and final reading in the State Duma is expected on January 25.

Gibbs and Russian spar on freedomhttp://www.politico.com/politico44/perm/0111/cold_war_redux_4ec32df4-9db7-48d3-bee3-d683d5e600d5.html

By GLENN THRUSH | 01/13/11 12:04 PM Updated: 01/13/11 2:02 PM

There was a bizarre – but riveting – Cold War moment in the White House briefing room on Thursday.

White House press secretary Robert Gibbs, still groggy after Air Force One’s night flight from Tucson, Ariz., had spent the better part of an hour discussing the emotional impact of Saturday’s shooting on President Obama and his speechwriting staff.

Into this somber atmosphere stepped correspondent Andrei Sitov – of Russia’s official news agency ITAR-TASS – who passionately demanded to know if the shooting of Rep. Gabrielle Giffords (D-Ariz.) and murder of six people on Saturday was a byproduct of excessive personal freedom.

Sitov began by offering condolences to the victims of the shooting, then mused on America’s “quote-unquote freedom of the deranged mind” to buy a gun, show up at an open-air congressional town hall and kill.

Gibbs, who had been speaking sotto voce, raised his tone to typical press briefing volume to trumpet the “American” virtues of “freedom of expression” and the freedom of assembly, which Sitov later interpreted on the crackdown by President Vladimir Putin, who has restricted many press and personal freedoms.

“I think it's important to understand that, as I said earlier, [Giffords’ "Congress on Your Corner"] event ... was the exercise of some very important, very foundational freedoms to this country: the freedom of speech, the freedom to assemble, the freedom to petition your government, democracy that -- or a form of self-government that is by and for the people -- all of -- all very quintessential American values that have been on display, along with the tremendous courage and resilience of those in that community and throughout this country that have had to deal with this tragedy,” Gibbs said.

“I vehemently disagree,” Gibbs concluded.

After the exchange – a faint echo of the 1959 Nixon-Khrushchev “kitchen debate” – Sitov told POLITICO he had heard of ordinary Russians who reacted to the shooting by saying, “and these people lecture us.”

He added, “If you want to stop this, you have to be willing to restrict some freedoms.”

Don't Call Killer's Actions 'American,' Gibbs Tells Russian Reporterhttp://www.npr.org/blogs/thetwo-way/2011/01/13/132904850/dont-call-killers-actions-american-gibbs-tells-russian-reporter

by Mark Memmott

There is nothing "American" about the "deranged actions of a madman" who would kill six people and shoot another 13 at a Tucson strip mall on a Saturday morning in January, White House spokesman Robert Gibbs sternly told a Russian reporter today at the White House.

It's sometimes part of a White House press secretary's job to correct what he or she sees as the mistaken impressions of foreign reporters — and Gibbs did just that. You can listen and we'll put the transcript below:

Reporter: "First my condolences to all the Americans, especially obviously to the victims. But second as to why — it does not seem all that incomprehensible, at least from the outside. It's the reverse side of freedom. Unless you want restrictions, unless you want a bigger role for the government ..."

Gibbs: "Well, let me do this — because, look, I think there’s a — there’s an investigation that’s going to go on — there's a ..."

Reporter: "No ..."

Gibbs: "Hold on, let me — let me take my time back just for a second. I think there's an investigation that's going to go on. I think there are — I think as it goes on, we will learn more and more about what happened.

"I think as the president was clear last night, we may never know fully why or how. We may never have an understanding of why, as the president said, in the dark recesses of someone’s mind, a violent person’s mind, do actions like this spring forward.  I don't want to surmise or think in the future of what some of that might be.

"But I think it's important to understand that, as I said earlier, the event that was happening that day was the exercise of some very important, very foundational freedoms to this country: the freedom of speech; the freedom to assemble; the freedom to petition

your government; democracy or a form of self-government that is of, by and for the people — all of — all very quintessential American values that have been on display along with the tremendous courage and resilience of those in that community and throughout this country that have had to deal with this tragedy.

"Yes."

Reporter: "Exactly, Robert.  But this is what I was talking about — exactly this. This is America, the democracy, the freedom of speech, the freedom of assembly, the freedom to petition your government.  And many people outside would also say — and the quote, unquote 'freedom' of a deranged mind to react in a violent way is also American.  How do you respond to that?"

Gibbs: "I'm sorry. What’s the last part?"

Reporter: "The quote, unquote 'freedom' of the deranged mind to respect — to react violently to that, it is also American."

[Another reporter is then overheard on the recording saying "No, it’s not."]

Gibbs: "No, no, I would disagree vehemently with that. There are — there is nothing in the values of our country, there's nothing on the many laws on our books that would provide for somebody to impugn and impede on the very freedoms that you began with by exercising the actions that that individual took on that day. That is not American.

"There are — I think there's agreement on all sides of the political spectrum: Violence is never, ever acceptable. We had people that died. We had people whose lives will be changed forever because of the deranged actions of a madman. Those are not American. Those are not in keeping with the important bedrock values by which this country was founded and by which its citizens live each and every day of their lives in hopes of something better for those that are here.

"Thank you."

Russia works on new energy doctrinehttp://english.ruvr.ru/2011/01/14/39659027.html

Jan 14, 2011 09:26 Moscow Time

Russia is working on a new energy security doctrine.

   According to Security Council Secretary Nikolai Patrushev, the new doctrine will stipulate better coordination in ensuring the country’s energy security and will serve to guarantee sustained energy supply even in case of emergency, revamp oil and gas processing facilities and transform Russia into one of the top economically and politically developed nations.

Poland may ask for international probe into presidential plane crashhttp://en.rian.ru/russia/20110114/162135807.html

Poland might have to turn to international agencies if expert negotiations with Russia fail to provide an agreement over the causes of the Polish presidential plane crash, the premier told a news conference in Warsaw on Thursday.

Russia's aviation authorities released a report Wednesday citing the pilot error as the main cause of the tragedy, which killed then President Lech Kaczynski last April in western Russia. The report aroused criticism from Polish experts and officials as insufficient and lacking in evidence.

"If negotiations with Russia fail to coordinate a final agreement, then we might have to ask international agencies for assistance," said Polish Prime Minister Donald Tusk. "Our goal is not to secure a compromise but to find out the truth."

Tusk also said that Poland would first ask Russia to work with Polish experts and make a coordinated report on the plane crash, an effort that would meet the interests of both countries.

The Russian probe put the blame on the Polish presidential crew for their decision not to use a reserve aerodrome despite being informed of unfavorable weather conditions at their destination. Polish Interior Minister Jerzy Miller said Wednesday that Russian air traffic controllers should have banned any landing attempt by the crashed plane crew anyway.

Earlier on Thursday Tusk said that Warsaw would not allow differences over the report to harm bilateral relations, a position backed by Russian Foreign Minister Sergei Lavrov later in the day.

Polish President Bronislaw Komorowski said Thursday that he shared the position of the Polish government on the Russian investigation results. "Poland's position is both well-weighed and well considered," he said, adding that Poland had no objections to the Russian investigation results but was dissatisfied with "technical organizational errors" on the part of the Russian side.

The late Polish president's twin brother and opposition leader Jaroslaw Kaczynski criticized Wednesday the Russian probe as being one-sided. Polish experts complained

about a lack of technical detail on the airport in Smolensk where the plane was due to land. The Russian investigation involved at least 24 Polish officials.

MOSCOW, January 13 (RIA Novosti)

Polish President goes with government's assessment of plane crash reporthttp://english.ruvr.ru/2011/01/14/39654554.html

Jan 14, 2011 06:05 Moscow Time

Polish President Bronislaw Komorowski on Thursday fully shared the government’s assessment of the IAC’s report on the causes of last year’ plane crash  that  killed then President Lech Kaczynski in western Russia.

Polish PM Donald Tusk earlier described the report as insufficient but acknowledged the Polish side’s responsibility for the tragedy.

The Russian probe put the blame on the Polish presidential crew for their decision not to use a reserve airfield despite being informed of unfavorable weather conditions at their destination.

Polish President finds errors in Kaczynski plane crash investigationhttp://rt.com/politics/polish-president-crash-investigation/print/

Published: 14 January, 2011, 10:05Edited: 14 January, 2011, 10:47

Polish President Bronislaw Komorowski has supported the government’s stance concerning the causes of the air crash that killed Lech Kaczynski and 95 others, including many of the country’s top officials, on April 10, 2010.

He made the statement speaking to the Polish press agency PAP in the wake of the official report of the Interstate Aviation Committee (IAC) released on Wednesday. The report named the crew’s refusal to use an alternate airfield and their decision to land by all means in poor weather conditions were the main reasons of the presidential jet crash near the Russian city of Smolensk.

Noting that Poland does not have major rebukes to the conclusions of the committee, Komorowski said, though, that there have been some technical errors and organizational flaws on the Russian side. He drew attention to the fact that that Polish specialists have not yet completed their investigation.

“I think that when this work is over, we will be able to see where our viewpoints differ and where we have a common view,” Komorowski told Polish journalists.

Earlier, Prime Minister Donald Tusk, who cut short his vacation to study the report handed over to the Polish side, called the document “incomplete”. He added, though, that Poland does not dispute the IAC’s “essential conclusions”.

The Polish public has mixed feelings over the report’s findings. Local media write that the document overlooks the actions of Smolensk air-traffic controllers and the technical state of the airfield. The late president’s brother, Jaroslaw Kaczynski, emotionally called the report an “insult to Poland”.

But there are some politicians, including former Polish President Lech Walesa, and technical specialists in Poland, who are supportive of the IAC’s conclusions.

© Autonomous Nonprofit Organization “TV-Novosti”, 2005 - 2011. All rights reserved.

Russian Smolensk committee ‘political tool’ - Kaczynskihttp://www.thenews.pl/international/artykul147317_russian-smolensk-committee-political-tool---kaczynski.html

14.01.2011 07:36

The Russian committee investigating the Smolensk air disaster is not an objective institution but a tool of the Kremlin, says Jaroslaw Kaczynski, twin brother of the late President Lech Kaczynski, who died in last year’s plane crash in western Russia.

Speaking directly after Prime Minister Donald Tusk said that the Russian Interstate Aviation Committee’s report into the causes of the 10 April Smolensk air disaster was “incomplete” and Poland would be seeking further clarification on parts of the 2010 page document, Jarolsaw Kaczynski said the Polish government’s policy towards Moscow on the issue has proved to be totally ineffective.

Jaroslaw Kaczynski claims that the Russian Interstate Aviation Committee is not an objective institution but a tool in the hands of Russian authorities. In Kaczynski’s opinion it draws wrong conclusions and conceals some facts.

“It is not true that Russian air controllers refused the landing of the presidential plane at Severny airport on 10 April,” said Kaczynski, claiming that it is not the Polish pilots who should be blamed for the disaster, as has been suggested in the Russian report.

Prime Minisyer Tusk has been criticised for not returning soon enough from his holiday in Italy to comment on the report, released on Wednesday morning.

Speaking on Thursday afternoon, Kaczynski said: “If Donald Tusk had responded to the Russian report yesterday [right after its publication], there would not have been any articles about a drunk General,” said Jaroslaw Kaczynski, referring to media reports ascribing the blame for the Smolensk crash entirely on the Polish pilots and Commander-in-Chief of the Polish Air Force General Blasik, who, as the Russian committee claimed in its report, pressed the Polish crew to land while being under the influence of alcohol.

Jaroslaw Kaczynski, however, added that if he had been PM last April, there would probably not have been a catastrophe in Smolensk, pinning the blame for the disaster on the Russian side and the Polish government.

The Law and Justice leader also called for an extraordinary session of Parliament to debate the issue and a vote to reject the Russian the report, which, in his opinion, is now a priority.

'Balanced'

Meanwhile, President Bronislaw Komorowski, elected after the death of Lech Kaczynski, says he fully supports Prime Minister Tusk’s assessment of the Russian report.

"I fully support the position taken by the Polish government on the assessment of the causes of the air disaster in Smolensk submitted by Russia," Bronislaw Komorowski told the PAP news agency.

"Although the Polish side has no fundamental objections to the findings [of the report, the Polish government] raises the important issue of technical errors, omissions and organizational weaknesses," the president added.

"The position of Poland is balanced and strong," said President Komorowski. (pg/mg)

Polish Crash Widow Slams Moscow http://www.themoscowtimes.com/news/article/polish-crash-widow-slams-moscow/428813.html

14 January 2011Reuters

WARSAW — The widow of the Polish air force chief who died in last year's crash in Smolensk that killed Poland's president accused Moscow of slandering her husband by saying he had been drinking and contributed to the disaster.

In emotional public comments a day after a Russian report on the April 10 airliner accident in which 96 Poles died, Ewa Blasik also attacked the Polish government for what she called its "passive" failure to defend the honor of its officers.

Opposition leader Jaroslaw Kaczynski, twin brother of the late President Lech Kaczynski, branded the report by Russia's Interstate Aviation Committee, or IAC, a "joke against Poland."

"The IAC report is a shameful attempt to slander the memory of my husband," Ewa Blasik told a news conference on Thursday.

"There is not a single shred of evidence confirming that my husband mounted pressure or influenced the pilots. … It is not possible that he had been drinking," she said.

The Interstate Aviation Committee laid blame squarely on the Polish pilots and said they had come under psychological pressure to land from officials on board the airliner, including air force commander Andrzej Blasik, despite poor weather conditions.

Blasik, who was in the cockpit at the time of the crash, had a blood alcohol level of about 0.06 percent, the report said. That is around typical international limits for driving cars.

The Polish delegation died near Smolensk while flying to a ceremony held in honor of Poles massacred by Soviet secret police at Katyn in 1940.

The air force chief's widow said: "My husband, Andrzej Blasik, was Poland's first pilot and he dedicated all of his life to serving his homeland.

"He was also a man of honor and somebody today is trying to deprive him of that honor in the face of the whole world. The Polish government should defend the dignity of Polish officers, including my husband."

She called the attitude of Prime Minister Donald Tusk's government "passive."

Warsaw, which is conducting its own probe into the crash, has said the Polish side bears a large share of responsibility for the crash but that Russian air controllers and the poor technical facilities at Smolensk airport are also to be blamed.

Crash report angers Poles and shakes ties with Russiahttp://www.washingtonpost.com/wp-dyn/content/article/2011/01/13/AR2011011306670.html

By Will EnglundWashington Post Foreign ServiceFriday, January 14, 2011; A11

WARSAW - The crash last spring of a plane carrying Poland's president and other top officials outside the Russian city of Smolensk unexpectedly drew Poland and Russia closer together. Now, Russia's report on the crash is driving the longtime antagonists apart again - and dividing Polish politicians as well.

Polish Prime Minister Donald Tusk cut short a trip Thursday to return to Warsaw, where he attempted to contain the anger building here over the report's findings, published a day earlier. The Russian investigators blamed Polish pilots for the crash, which killed President Lech Kaczynski and 95 others, and suggested they were pressured into attempting a landing by a Polish general who had been drinking on the flight.

Good relations with Russia are too important to throw away, Tusk said. At the same time, he said, "the alternative to truth is a lie, and these relations can't be built on a lie."

He said he does not contest the "reasons" for the crash, as identified in the report, but wants to address its "circumstances," which he said the report ignores, including Smolensk's airport being kept open despite bad weather and the possible role of Russian air traffic controllers.

Tusk said he wants to open negotiations with Russia over a rewrite. "It's not about some false symmetry," he said. "It's important for Polish-Russian relations to have common agreement and get rid of all doubts."

That brought a swift retort from Polish opposition lawmakers. Tusk was acting too late and attempting too little, said Stanislaw Wziatek of the Democratic Left Alliance. He accused the prime minister of "wishful thinking" and said he should have started pressuring the Russians before the inquiry's report was released.

"Now it's too late for a common stance," he said.

If Poland's concerns are not recognized by the Russians, "it will be a slap in the face for Poland," said Grzegorz Napieralski, a colleague of Wziatek's. He accused Tusk of trying to score political points by grandstanding over the report without actually attempting to refute it.

The Poles agreed, however, that the inquiry had begun in a spirit of solidarity, but that over the summer the Russians had grown less and less cooperative. In Moscow on Thursday, Russian Transport Minister Igor Levitin derided Poland's response, suggesting it was cherry-picking the evidence to shift some blame to Russian air controllers when there were decisive grounds for finding the pilots in error.

E. Nalbandyan: Armenian, Russian and Azerbaijani FM-s meet on January 24http://www.panorama.am/en/politics/2011/01/14/fm-armn/

 Foreign Minister of Armenia Edward Nalbandyan approved the news of his meeting with Foreign Ministers of Azerbaijan and Russia.

In a meeting with the reporters, E. Nalbandyan said that by the initiative of Russian FM Sergey Lavrov, The Foreign Ministers have a meeting scheduled for January 24 in Moscow.

Minister Nalbandyan did not exclude that another meeting with participation of the co-chairs may take place in February.

Source: Panorama.am

Two Armenian honorary consuls out of jobhttp://www.news.az/articles/armenia/29757

Fri 14 January 2011 05:26 GMT | 6:26 Local Time

Armenian Foreign Ministry did not extend terms of office of Armenian honorary consuls in the city of Vladivostok and Volga Region of Russia.

Appointment of new honorary consuls requires relevant procedure and demands certain time, Armenian Embassy in Russia informed Yerkrmas newspaper.

Tenure of Artashes Chilingaryan, Honorary Consul of RA in Yekaterinburg (Russia), expired on December 1, 2010, Tigran Balayan, spokesperson for the Armenian Foreign Ministry, told NEWS.am.

Yerkramas newspaper was also informed that institution of honorary consul in Yekaterinburg is not abolished. 

News.am

Territory settlement 'impossible' now: Russiahttp://search.japantimes.co.jp/cgi-bin/nn20110114a7.html

MOSCOW (Kyodo) Moscow has ruled out resolving the long-standing dispute with Japan over the sovereignty of islands off Hokkaido in the near term, a top official of the Russian Foreign Ministry said Wednesday.

"Settlement is impossible for now," the official said, adding that enhancing bilateral relations through measures such as economic cooperation should come first.

The remarks were interpreted as suggesting the Russian government will shelve negotiations over the islands for the time being and instead encourage Japanese corporations to start businesses and invest in Russia.

The Russian official expressed the view after President Dmitry Medvedev in November visited Kunashiri Island, one of the four Russian-held islands claimed by Japan off Hokkaido, marking the first visit by a Moscow leader.

The official also said Medvedev has made clear that no breakthrough will be possible over the territorial issue without a change in the current situation, apparently referring to the president's remarks on his Twitter website about his meeting with Prime Minister Naoto Kan in Japan in November.

Shortly after his talks with Kan on the sidelines of the Asia-Pacific Economic Cooperation forum summit, Medvedev said in a Twitter message that he had told the prime minister that promoting economic cooperation benefits both countries more than discussing an issue that cannot be solved.

Kan protested Medvedev's visit during the meeting.

The Russian official emphasized the importance of strengthening overall bilateral relations, saying such efforts will help Japan and Russia work toward settling the territory issue as a result.

"Our policy toward Japan has not changed, and we just hope to enhance ties with Japan," the official said, while referring to stepped-up activities by Japanese businesses in the Russian market.

Tokyo and Moscow are at odds over the islands of Etorofu, Kunashiri and Shikotan as well as the Habomai islet group. The territory was seized by the Soviet Union following Japan's surrender in World War II on Aug. 15, 1945.

In October 1956, Japan and the Soviet Union signed a joint declaration to end wartime hostilities and restart diplomatic ties, in which the Soviets agreed to return Shikotan Island and the Habomai islets to Japan following the conclusion of a peace treaty.

The Russian official said that "good will" on the Soviet side was behind the agreement included in the declaration and that Russia finds no reason to return the islands as long as a peace treaty is not in place.

The Japan Times: Friday, Jan. 14, 2011(C) All rights reserved

Court to hand over verdict copies to Khodorkovsky defensehttp://en.rian.ru/russia/20110114/162136253.html

Moscow's Khamovniki District Court will give copies of the verdict in the second trial against Russian ex-oil tycoon Mikhail Khodorkovsky and his business partner Platon Lebedev to their lawyers on Friday.

"The court has already prepared copies of the verdict for all participants of the trial and is planning to hand them over on Friday," court's spokesperson Natalia Vasilyeva said.

She insisted that the court had not violated the 5-day requirement by law to complete this procedure.

"The court finished the announcement of the verdict on December 30, 2010, and must release its copies within five days after the announcement, but the holiday season does not count toward this time limit," Vasilyeva said.

The Russians enjoyed 10 days of New Year holidays until January 11.

Vasilyeva also dismissed allegations by Khodorkovsky's lawyers that they had not received copies of transcripts of court sessions in the trial held in 2010.

"The defense was given copies of five transcripts, totaling 6,000 pages. Another set of transcripts will be given to all participants in the near future," she said.

On December 30, the court sentenced Khodorkovsky and Lebedev to a total of 14 years in prison in a second trial involving Yukos assets. The two men, who already spent seven years in jail for fraud and tax evasion from their 2005 trial, could remain behind bars until 2017.

Khodorkovsky and Lebedev have repeatedly denied the charges, saying they were politically motivated.

Many Western countries and organizations, including the United States and the European Union, have condemned the verdict as harsh and unfair, and expressed concern over the fact that the judicial system in Russia has shown no signs of improvement despite President Dmitry Medvedev's pledge to make it just and transparent.

Khodorkovsky and Lebedev's lawyers have already appealed the verdict.

MOSCOW, January 14 (RIA Novosti)

Russian sailors refuse to vacate arrested ship without salaryhttp://en.rian.ru/russia/20110114/162138035.html

The crew of a Russian cargo ship, which was impounded in China and loaned to another company, have refused to leave the vessel until arrears in salary have not been paid to them, the Russian sailors' trade union said Friday.

The Maksim Ammosov ship, owned by Russia's Arctic Shipping Company, was impounded at the port of Yantai on December 23 for outstanding debts totaling $130,000.

The ship owner later leased the vessel to another shipping company under a bareboat charter deal, or "without a crew."

Seventeen Russian sailors, including two women, remain on board after having appealed to the Russian sailors' trade union for help.

"The sailors refuse to vacate the ship, until the owner pays them the arrears in salary totaling $38,000," said Nikolai Sukhanov, the head of the Far Eastern branch of the trade union.

Sukhanov said that the ship could be released by the end of January because the owner had paid off $80,000 out of $130,000 that it owes.

The trade union expects that the sailors would be paid either in China or upon their return to Russia.

According to Sukhanov, the Russian Transport Ministry officials and the Russian consul in Beijing monitor the development of the situation with the impounded ship.

 VLADIVOSTOK, January 14 (RIA Novosti)

Number of top Russian officials on trial for corruption doubleshttp://www.news.az/articles/russia/29781

Fri 14 January 2011 09:00 GMT | 10:0 Local Time

More than 20 top Russian officials were brought to trial last year, twice as many as in 2009.

The number of corruption-related crimes involving senior government officials and large bribes increased 100% in 2010 year-on-year, Russian Interior Minister Rashid Nurgaliyev said on Thursday.

"Criminal proceedings were launched against some 10,000 officials, one-third of them for taking brides," Nurgaliyev said at a session of a Russian presidential council for combating corruption.

More than 20 top Russian officials were brought to trial last year compared with half that number in 2009. "Such cases almost doubled," Nurgaliyev said, adding that corruption remains an issue of concern despite efforts taken by the government.

Nurgaliyev said the Russian Interior Ministry planned to speed up efforts to combat corruption. He said the main focus would be made on detecting corruption-related crimes among businessmen and also ministry officials themselves.

Russian President Dmitriy Medvedev launched a wholesale reform to clean up corruption but admitted earlier that his anti-corruption drive had so far yielded few practical results.

The Berlin-based non-governmental anti-corruption organization Transparency International has persistently rated Russia as one of the most corrupt nations in the world. In the 2009 Corruption Perception Index, Russia was ranked 146 out of 180 countries, with a ranking below the likes of Togo, Pakistan and Libya.

RIA Novosti

Russian police tell Internet provider to remove controversial interactive adhttp://en.rian.ru/russia/20110114/162139327.html

08:57 14/01/2011

VLADIVOSTOK, January 14 (RIA Novosti) - Police in Russia's Far East requested Internet provider Alyans-Telekom in Vladivostok on Friday to remove from its site a banner that would allow visitors to shoot at the Kremlin as well as at an animated character similar in appearance to Russian President Dmitry Medvedev.

Regional investigators on Thursday requested the local police check the advertisement "for signs of extremism."

Alyans-Telekom director Andrei Patrikeyev made a public apology for the incident, however said that it was just a creative way of attracting attention to his company.

"I'm very grateful for the heightened attention to our company, but because of the large-scale social outcry I would like to apologize about this and just say that this banner was simply a creative product of our wild PR people. We all know that these creative individuals are not from this world, so to say," Patrikeyev said on the company's website.

Patrikeyev also denied that the character jumping out from behind the Kremlin walls is similar in appearance to the president, saying: "Someone will always find a similarity if it's convenient for him."

The company director also denied that the Kremlin was illustrated on the banner, saying that the design does not have anything in common with the country's capital of Moscow.

"There is no sea or a bridge like that in Moscow and there are no submarines navigating the Moscow River."

Homeless man attempted suicide in Dmitry Medvedev’s waiting room

http://top.rbc.ru/incidents/14/01/2011/527340.shtmlGOOGLE TRANSLATION

A homeless man attempted suicide in the building of the reception of President Dmitry Medvedev in Moscow. According to RBC's a law enforcement source in the capital, on January 13 at 14:40 MSK he cut himself on the neck and right arm with a blade fragment.

Belosonyan Gumedin Grishaevich was born in 1970, with no permanent residence, was trying to get attention for obtaining any documents. The incident occurred in the reception building of the head of state in the capital, on Ilinka Street 23. G. Belosonyan was hospitalized for medical care. Circumstances of suicide attempts are currently being established. We recall a similar incident occurred on October 20, 2010. in the public reception of "United Russia" in Nalchik: mentally ill woman committed self-immolation attempt. It turned out that it is registered in the national mental hospital. The policemen stopped her at the moment when a woman oblilas gasoline and looking for a way to burn yourself. In June of 2010. resident of the Arkhangelsk region attempted self-immolation on Red Square in Moscow. He wanted to express my disagreement with the actions of traffic police, who confiscated his driver's license for driving while intoxicated. Man oblilsya fluid for ignition of fires and set fire to himself near the Lenin Mausoleum. His extinguished bystanders police.

Russian icebreakers continue rescue efforts in Okhotsk Seahttp://en.rian.ru/russia/20110114/162138899.html

Russia's Russia's Krasin and Admiral Makarov icebreakers continue to lead the Sodruzhestvo mother fishery ship through thick ice floe to clear waters, the Far Eastern Shipping Company said Friday.

The fishing ship with about 300 people on board has been stranded in heavy ice in the Sea of Okhotsk for two weeks.

The Admiral Makarov and Krasin started towing the vessel on Wednesday afternoon, but towing ropes snapped soon after the start of the operation. The rescue resumed on Thursday morning.

"The convoy has covered 17 miles since the beginning of the rescue operation, and will reach the Bereg Nadezdy refrigerator ship after another eight miles," spokeswoman Tatyana Kulikova said. "After the meeting with the refrigerator, they will face a very difficult stretch of ice floe before reaching clear waters."

According to the rescue plan, the icebreakers will continue towing the Sodruzhestvo, while the Bereg Nadezhdy will attempt to sail on its own along the channel cut in the ice by Admiral Makarov and Krasin.

The weather conditions in the area continue to deteriorate rapidly. Strong winds, low visibility and shifting ice floes hamper the rescue effort, the spokeswoman said.

VLADIVOSTOK, January 14 (RIA Novosti)

Russia’s Shmakov re-elected FITUR chairman

http://www.itar-tass.com/eng/level2.html?NewsID=15856140

14.01.2011, 11.49

MOSCOW, January 14 (Itar-Tass) -- Mikhail Shmakov has been re-elected to the post of chairman of the Federation of Independent Trade Unions of Russia (FITUR).

Participants in the 7th FITUR congress, which is underway in Moscow, voted for his candidature.

Shmakov heads the FITUR since 1993.

Vehicles trapped on snow-covered pass in Magadan Reg

http://www.itar-tass.com/eng/level2.html?NewsID=15855692

14.01.2011, 09.02

KHABAROVSK, January 14 (Itar-Tass) -- About 15 vehicles – petrol tankers, trucks and cars -- are stuck on the Kapranovsky pass of the federal highway "Kolyma" in the

Magadan Region. Since Thursday they can not get through snowdrifts on the road, a source at the Russian Emergencies Ministry’s department in the Magadan Region told Itar-Tass.

Snow-removing machines working on the pass could not cope with clearing, and the administration of the Omsukchan district additionally sent a loader, bulldozer and a tractor to the site.

Food was delivered from nearby settlements for the drivers and passengers of the trapped vehicles.

An emergency operational group was sent from Magadan on Friday to the site to assess the situation and coordinate the work. Road workers are expected to clear the road by the end of the day.

Meteorologists note the weather is abnormally warm in the Magadan Region. The air temperature in Magadan is 3-4 degrees below zero this Friday. There is a snowstorm in the region. At the same time, the southern regions of the Far East – the Amur region and the Khabarovsk and Primorye territories are hit by so-called Epiphany frosts. The temperature dropped to 38 degrees of frost in Khabarovsk overnight.

Central Election Commission to broadcast meetings onlinehttp://rt.com/news/line/2011-01-14/#id1199

RT News line, January 14

The Central Election Commission of the Russian Federation is launching an updated version of its website. Among new options to be added are online broadcasting of the Commission meetings. It will also be possible for voters to access their own private page containing their personal data or see themselves on the electorate lists. Also, representatives of the Commission believe it is a very useful introduction, as it will be possible to find and correct mistakes on voter lists. The website is expected to be fully operational by the beginning of the State Duma election campaign of 2011.

January 14, 2011 9:36 Head of village administration killed in Dagestan

GOOGLE TRANSLATION

http://www.interfax.ru/news.asp?id=173047

Makhachkala. January 14. INTERFAX.RU - The head of the village of Upper Ubeki Levashinskogo district of Dagestan Rabadan Rabadanov was shot dead Thursday night in the courtyard of his house. As reported by Interfax press service of the Dagestan Interior Ministry, Rabadanov was killed by automatic weapon fire. On-site works operational and investigative team.

Russian Press at a Glance, Friday, January 14, 2011http://en.rian.ru/papers/20110114/162139035.html

08:25 14/01/2011© RIA Novosti. Rybchinskiy

POLITICS President Dmitry Medvedev launched a new offensive against corruption by ordering a thorough check of government officials' income declarations and tough penalties against those who provided false information.

(Rossiiskaya Gazeta, Moscow Times, Vedomosti, Kommersant)

Russia may strike a deal with several EU countries on easing the entry visa regime. A new issuance mechanism has been proposed by Spain and supported by France and Italy.

(Vedomosti)

Russia was described as an "authoritarian regime" in a recent Freedom House report along with China, Egypt, Iran and Venezuela, where governments continued to ramp up repressions.

(Vedomosti)

ECONOMY & BUSINESS

The Russian government will develop by 2012 a state program for prospecting and extracting mineral resources on Russia's Arctic shelf. Russian experts estimate recoverable oil and gas resources on the continental shelf at 100 billion tons of reference fuel.

(Rossiiskaya Gazeta)

Russia placed 143rd among the 183 countries on the Heritage Foundation’s annual economic freedom rating. Russia’s overall score of 50.5 is below the world average of 59.7 and the regional average of 66.8.

(Moscow Times)

The auto market in Russia grew by 30 percent last year to 1.91 million units, rebounding after an initial slump and leaving it poised to reach pre-crisis sales levels by 2012. Russia could soon overtake Germany as Europe’s largest auto market.

(Moscow Times)

Foreign airport operators are showing interest in the management of Sheremetyevo International Airport.

(Kommersant, Moscow Times)

U.S. Space Adventures company will be able to send three space tourists to the International Space Station every year starting in 2013. The company has recently reached a relevant agreement with Russia’s Federal Space Agency and Energia corporation.

(Rossiiskaya Gazeta)

Russia's private net capital outflow in 2010, according to preliminary balance of payments figures, amounted to $38.3 billion. It largely exceeds the estimates calculated by Russia’s Central Bank.

(Vedomosti, Nezavisimaya Gazeta) 

SOCIETY

Lawyers for jailed ex-Yukos CEO Mikhail Khodorkovsky vowed to contest charges against their client, while Foreign Minister Sergei Lavrov said the Yukos case would not deter foreign investors from doing business in Russia.

(Moscow Times)

CRIME

Russia’s anti-drug agency reveals details of a stint operation in Bashkotorstan that brought down a massive drug network. Narcotics police arrested at least 90 people and confiscated large stashes of heroin and marijuana.

(Rossiiskaya Gazeta)

DEFENSE

Russia is developing a new-generation heavy ICBM to replace the outdated SS-18 Satan. The new missiles could be put in service in about eight years.

(Rossiiskaya Gazeta)

CIS

Kyrgyzstan may face a serious political scandal in the near future over the redistribution of wealth and assets among former and current government officials. President Roza Otunbayeva’s family may be involved in a corruption scheme related to supplies of fuel to a U.S. base at Manas Airport near the capital, Bishkek.

(Nezavisimaya Gazeta).

January 14, 2011 8:42 Ishmailov gave Vekselberg his rights for building the largest hotel in Sochi

http://www.interfax.ru/news.asp?id=173039

Moscow. January 14. INTERFAX.RU - AST Group Telman Ismailov lost the right to build one of the largest hotel complexes in Sochi to the company of Viktor Vekselberg, the newspaper Kommersant on Friday. According to the newspaper, construction investors due to the fact that after the scandal over the Cherkizovsky market in Ismailov may have problems with funding the project. According to the newspaper, instead of Ismailov now, this complex will be built OOO "Top Project" and its number of rooms was reduced to 3,6 thousand numbers. A source said that the right to develop the ACT ceded to a company controlled by group Renova Victor Vekselberg. By some estimates, the construction of two hotels in Sochi on 3,6 thousand numbers will cost no less than $ 540 million and investment payback period may reach 10 years.

Nezavisimaya: A shovel is better than GLONASShttp://rt.com/politics/press/nezavisimaya/kaliningrad-glonass-snow/en/

Published: 14 January, 2011, 05:33Edited: 14 January, 2011, 05:33

Head of Kaliningrad brought 600 officials to the streets to clean the ice Aleksandr Ryabushev (Kaliningrad)

Kaliningrad administration officials have been obliged to spend the second half of their working days in January outside, armed with shovels. This is a way the city’s Mayor, Aleksandr Yaroshuk, is trying to encourage efforts to clear the snow, which had piled

onto the regional center. 

The first day of work for the officials, the vast majority of whom were women, did not show many results. But the local journalists did get a chance to photograph women in fur coats and high-heeled boots working with shovels. The reason for this attire was the fact that the municipal officials were informed about their new job responsibility in the middle of their work day.

Snowstorms have paralyzed Kaliningrad due to a combination of two factors. First, the city has received two-month’s average snowfall. 

Secondly, it was time for the traditional New Year’s “off season”, when only the on-duty emergency units were operating. The technical aids for normal city cleaning also proved to be weak – efforts of 400 street sweepers could not compensate for the low level of snow removal machinery.   

The situation in Kaliningrad has already sparked an outrage from Governor Nikolay Tsukanov, who, on January 9, demanded the streets be cleared of snow in four days. On Wednesday evening, in response to the governor’s discontent, Aleksandr Yaroshuk brought 600 officials to the streets, who were not trying to clean the snow, but the ice that covered the streets shortly after it became warmer.  

Head of the Leningrad District Administration, Nadir Agayev, suffered as a result of the snow storm. After one of the meetings, Aleksandr Yaroshuk had once again expressed discontent with his absence from the city in the midst of bad weather, and Agayev resigned. The mayor had also suggested dismissing all of Kaliningrad’s district deputies in charge of housing utilities. Through the media, Aleksandr Yaroshuk made public his mobile phone number, which any citizen can call to report a snow-covered area, so that city authorities could take urgent action.  

While the municipal officials were dealing with snow, the regional Minister of Infrastructure Development, Aleksandr Rolbinov, made an announcement about the introduction of a higher technological way to clean the snow. Special equipment in the region was equipped with movement monitoring instruments, based on the GLONASS system, which should help to quickly track the drivers’ working locations. With the system’s help it will be possible to identify the location of the equipment, and where and at what speed it is moving. According to Nezavisimaya Gazeta’s (NG) sources, however, for now the accessory is working in test mode. As was reported by the head of the Road Management Department, Gennady Leibovich, the transmitters have been installed onto 100 units of equipment, which cost the region 1.5 million rubles. The system is expected to be paid off in three months.      

The efficiency of the system’s work, however, raises doubts. GLONASS can, of course, determine where the snow-removal equipment is located, but is incapable of determining whether the snow piles have been cleared. Incidentally, all it takes for a supervisor to check this is to walk down the street. But, now the authorities have a chance to

checkmark implementation of modern technologies from their to-do list. Moreover, apparently, they will also make Deputy Prime Minster Sergey Ivanov, who has been a long-time advocate for the integration of the GLONASS system everywhere and anywhere, very happy.     

In the last decade, utility services have been spoiled by a succession of warm winters when, if the snow fell, it melted on its own. During last year and this year’s winters, this is no longer the trend – Kaliningrad residents were tested by severe frost, and just recently they experienced one of the most powerful snowstorms in centuries. But the residents have little interest in these details, because walking on the streets is unsafe. Emergency rooms, ambulances, and other medical facilities of Kaliningrad are reminiscent of medical battalions in wartime – a continuous stream of city residents is coming with fractures and bruises.

© Autonomous Nonprofit Organization “TV-Novosti”, 2005 - 2011. All rights reserved.

Kommersant: The Young Guard’s word is being put to the testhttp://rt.com/politics/press/kommersant/young-guard-human-rights/en/

Published: 14 January, 2011, 03:18Edited: 14 January, 2011, 03:18

Human rights activists suspect the organization of extremism Aleksandr Chernykh

Yesterday, human rights organization Agora turned to the Justice Ministry with a request to check the Young Guard of United Russia organization for extremist activities. According to the human rights activists, the articles, published on the Young Guard’s website, incited hatred against “liberal journalists”. The Young Guard representatives call Agora’s appeal a carefully planned provocation, but at the same time promise to fully change the movement’s information policy.    

Agora Chairman Pavel Chikov told Kommersant that the human rights activists drew their attention to the Young Guard at the request of a number of journalists, who were outrage by articles published on the organization’s website. In particular, media representatives, covering opposition protests of the “dissident” and radical ecologists, were referred to as the enemy of the Russian people, traitors, and accomplices in crime. Photo of journalists with the message: “Will be punished”, were published in one of the articles – among them was Kommersant’s journalist Oleg Kashin, who was later brutally beaten. After that, the Young Guard of United Russia removed several dozen articles from the website.    

According to Agora’s lawyers, such statements are borderline extremist and incite hatred toward “journalists with a certain type of position”. “Legally, this could be considered as crime-promoting circumstances,” said Mr. Chikov. “Such articles create a background

for the use of violence against, let’s put it as – liberal journalists.”

The Agora chairman added that the human rights activists had also discovered violations of the law on public organizations in the work of the Young Guard. “The organization is identified as being nationwide. To have such status they must have branch offices in at least half of the country’s regions, but they, themselves, are only talking about 15,” said Mr. Chikov. “There are other violations, for which the Ministry of Justice normally punishes community workers, but not pro-leadership organizations.” The activists are expected to receive a response to their appeal 30 days after it was initially submitted to the Justice Ministry.    

Experts with the Sova Center, a nongovernmental human rights organization dealing with issues related to extremism, believe it is unlikely that the Justice Ministry will take any measures against the pro-governmental movement. The Center’s representative, Maria Rozalskaya, says that, in this case, the activists’ efforts will most likely be used to discredit the anti-extremism legislation and utilized to limit the freedom of speech.     

Young Guard’s leader Timur Prokopenko called the human rights activists’ appeal a carefully planned provocation. “This is just another attempt to demonize the Young Guard against the background of our high-profile events and social campaigns,” he said. According to him, late last year the Prosecutor General’s Office had already stated that the Young Guard of United Russia is not an extremist organization. Mr. Prokopenko responded to Kommersant’s question of why, in this case, numerous articles, which the activists considered to be extreme, were removed from the site, by simply promising that the movement’s information policy and the website’s chief editor will change in the near future.

© Autonomous Nonprofit Organization “TV-Novosti”, 2005 - 2011. All rights reserved.

Rossiskaya Gazeta: Who will enter orbit next?http://rt.com/politics/press/rossijskaya-gazeta/orbit-space-tourism-2013/en/

Published: 14 January, 2011, 03:11Edited: 14 January, 2011, 03:11

Starting in 2013, three space tourists will be able to annually travel to the ISS Natalia Yachmennikova

In 2013, the American company, Space Adventures, which specializes in space tourism, will being offering “star travelers” three trips to the International Space Station onboard the Russian Soyuz spacecraft. This arrangement was made under the agreement between Roscosmos and RSC Energia.   

Additional space for tourists on spacecraft will become available due to an increase in their annual production – from four to five. Specialists say that each flight to the ISS and

back will be short, and last approximately 10 days. “We are extremely excited to announce this agreement and would like to thank our Russian partners for increasing Soyuz production and providing Space Adventures these well sought-after transportation services on the only commercially available manned spacecraft currently in operation,” said the company’s chairman, Eric Anderson.    

Recall that it was his company, which is based in Virginia, that had essentially created the commercial tourism market 10 years ago, when US entrepreneur Dennis Tito ascended into space.

Later, several other trips had been organized to the orbital station. In 2002, South African Mark Shuttleworth followed in Tito’s footsteps. In 2005, American Gregory Olsen traveled to space, and a year later the first-ever female space tourist, American Anousheh Ansari. The next amateur astronaut to travel to space was Hungarian-American Charles Simonyi, who went down in history as the first non-professional astronaut to travel to the ISS twice: the first flight was in 2007, and the second – in 2009. Another “pioneer” traveled to orbit in 2008, first-generation American astronaut Richard Garriott – son of professional NASA astronaut Owen Garriott.   

And in 2009, owner of the famous Cirque du Soleil, Guy Laliberte, became the seventh person to travel to space. At that time, he whole-heartedly amused journalists by every now and then putting on his red clown nose.  

Incidentally, Russian astronauts, who had the chance to work with tourists, had all unanimously said that they were not just “travelers”. Each had his or her own scientific or educational project. Therefore, today, the main focus is on scientific, educational, and multimedia projects, which will be conducted by the non-professional astronauts onboard the orbital station. “We were the first on the space tourism market and are happy to expand our abilities by adding a fifth Soyuz,” said RSC Energia President, Vitaly Lopota.     

Meanwhile, NASA plans to reserve another 12 spots on the Russian manned Soyuz spacecraft for transportation of astronauts to and from the ISS. The Agency reports that the purchase of spacecraft and the related services may be implemented in stages and covers the period of 2014 to June 30, 2016.

© Autonomous Nonprofit Organization “TV-Novosti”, 2005 - 2011. All rights reserved.

January 13, 2011Putting the Bout into Khodorkovskyhttp://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1294923228

By Graham StackSpecial to Russia Profile

The Man Who Launched the Hunt for Arms Trader Viktor Bout Also Had Mikhail Khodorkovsky in his Sights

Lee Wolosky had a great end to 2010. The man who in 2000 launched the international hunt for notorious arms trader, “Merchant of Death” Viktor Bout, saw his target finally extradited to stand trial in the United States, on charges of terrorism and arms trafficking. Bout now faces up to 25 years in jail in the United States.

All credit to Wolosky. As described by Douglas Farah and Stephen Braun in their book on the subject, it was Wolosky who first put Bout on the U.S. security radar screen in his capacity as director of the Office of Transnational Threats on the U.S. National Security Council. But even after leaving office in 2001, Wolosky fought to keep Bout’s name in the public consciousness, lambasting his successors for not proceeding vigorously enough against a man U.S. prosecutors are now calling “an accessory to murder on an incomprehensible scale.”

But Bout’s extradition was not all that may have delighted Wolosky in late 2010. One month after Bout was charged, in December 2010, a man whom Wolosky had rated as a considerably greater threat to U.S. security than Viktor Bout, was sentenced in Russia for offences Wolosky had publicly accused him of over ten years previously.

That man’s name is Mikhail Khodorkovsky, the former majority owner and CEO of Yukos, Russia’s largest oil company. Khodorkovsky, who has become an international cause célèbre as a supposed Russian “prisoner of conscience,” was sentenced on December 30 to 14 years in jail on fraud charges. This means he will serve another six years in jail, following the end of a current eight-year sentence he is serving on charges dating from 2004. The verdict has met with widespread international condemnation for selective justice.

But for the man who launched the hunt for Viktor Bout, the charges against Khodorkovsky would have come as no surprise. In 2000, the same year as he started the hunt for Bout, in a seminal article in the U.S. flagship journal Foreign Affairs, Wolosky accused Khodorkovsky of egregious crimes, even suggesting complicity in murder, called on the Russian government to strip him of his oil company, and for the West to launch a transnational law-enforcement campaign against Khodorkovsky and his colleagues.  In hindsight, Wolosky’s targeting of Khodorkovsky in 2000 shows that the West’s adoption of the oligarch’s cause only a few years later was hardly written in the stars. Instead Wolosky represented a new consensus among U.S. policymakers that things had gone badly wrong in Russia and the oligarchs were to blame.

“These ruthless oligarchs have fleeced Russia of staggering sums, seizing control of its oil industry – one of the world's largest – in the process,” Wolosky wrote in the article. “Through payoffs and intimidation, they have insinuated themselves into electoral politics and virtually immunized themselves from prosecution,” he continued.

The White House security official called for the United States to treat Russia’s oil oligarchs – Khodorkovsky, Mikhail Fridman, Roman Abramovich and Boris Berezovsky – “like pariahs.” “In the battle against the oligarchs,” he wrote, “Moscow and the West must rely on every weapon available. If they do not, the oligarchs will.”

The manifesto-like article, entitled “Putin’s Plutocrat Problem,” set down the views that secured Wolosky’s appointment in the last years of the Clinton administration as director at the U.S. National Security Council’s Office for Transnational Threats. In this capacity, Wolosky handled interagency coordination on issues related to counterterrorism, international organized crime, and international narcotics.

His job was to protect America from what President Bill Clinton called “the dark side of globalization.” Wolosky was well qualified to do so, being among the first to comprehend the shockwave of crime and violence the collapse of the Soviet Union sent around the world. Having worked alongside Grigory Yavlinsky and Jeffery Sachs in Moscow on reform initiatives in the last years of the Soviet Union, in the later 1990s he then tangled with the misshapen results of those reforms – Russia’s ruthless breed of businessmen – in international courtrooms as a practicing lawyer.

A research fellowship at the Council of Foreign Relations then marked his return to the policy arena, and allowed him to formulate the arguments set down in his Foreign Policy article. The influence of his views on Russia was such that the incoming Republican administration of George W. Bush in 2001 even retained him in his position, although a Democrat. Wolosky’s calls for a tougher line on Russia, and on what he regarded as its openly criminal and internationally active oligarchs, dovetailed with the views of Bush’s own Russia specialists, such as new national security advisor Condoleeza Rice.

Among the weapons Wolosky advocated against the oil oligarchs was transnational criminal prosecution of individuals, similar to that later deployed against Viktor Bout. It was time, said Wolosky, for the West to “get personal” with the “oil pariahs.”

Another weapon Wolosky advocated was for Russia to renationalize its oil sector. “Given the extraordinary circumstances and the considerable stakes, the United States and multilateral organizations should actively encourage and support renationalization and re-privatization on a case-by-case basis,” he wrote.

And at the heart of White House official Wolosky’s analysis of the “oil pariahs” stood the figure of Mikhail Khodorkovsky.

In his article, – which deals only with the years 1998 to 1999 - Wolosky detailed how “Khodorkovsky’s Yukos managed to siphon off some $800 million during a span of approximately 36 weeks,” in 1999 through transfer pricing – forcing Yukos’ Russian subsidiaries to sell oil at a fraction of world market prices to the holding company.

Wolosky also described how Khodorkovsky had engaged in massive asset-stripping of Yukos subsidiaries following the 1998 financial crisis: “After three international banks

acquired approximately 30 percent of Yukos following a default on a loan to an affiliated bank, Khodorkovsky sought to turn Yukos into an empty shell. He forced it to convey its most significant asset – its controlling position in oil production subsidiaries – to unknown offshore entities. At the same time, he attempted the mother of all share dilutions: by transferring a massive number of new shares to offshore entities he is believed to control.”

Not content with this, according to Wolosky, Khodorkovsky and his colleagues “loot(ed) their companies even more directly – by stealing valuable assets, including wells, equipment, and anything else that can be found on an oil field.” “From 1997 to 1998, Yukos made the oil production companies it controls part with assets having a book value of some $3.5 billion,” the U.S. White House official wrote.

But even this theft on a grand scale was not the worst of Khodorkovsky’s offences, according to Wolosky. Wolosky suggested Khodorkovsky had been complicit in two contract killings in the course of 1998 to 1999 alone. “In June 1998, the mayor of Nefteyugansk was murdered. That spring, he had led a very public crusade and hunger strike against Yukos, protesting the enormous wage and tax arrears that he claimed were impoverishing the region. (…)  The mayor had previously sent a secret cable to Prime Minister Sergei Kiriyenko requesting his assistance in the showdown.  But the mayor was found dead before Kiriyenko could answer.”

“In March 1999,” continued the U.S. official in the Foreign Affairs article, “the car of a Russian oil executive allied with Western investors against Yukos was attacked in a military-style ambush. The executive was not in the car at the time of this attempt on his life — the second such attack. His bodyguards and driver were not as fortunate, however: one was killed in the assault, the others badly wounded.”

In 2006, a Russian court sentenced former Yukos head of security Aleksei Pichugin to lengthy prison sentences for organizing these and other contract killings. European representatives have however disputed that Pichugin, who claims innocence, had a fair trial.

Khodorkovsky never took legal action against Wolosky for the very damaging allegations made against him in a highly influential U.S. journal. Remarkably, nor did he specifically refute any of Wolosky’s allegations in a letter he subsequently wrote to the journal’s editor. Instead he merely called Wolosky’s analysis “simplistic” and “misguided” and warned the U.S. that any “economic warfare” against oligarchs would worsen already fragile relations between the United States and Russia.

Today, Wolosky, who has returned to practicing international corporate law for Boies, Schiller & Flexner LLP, stands behind his views on Khodorkovsky of over ten years ago. “I have little doubt that Mr. Khodorkovsky’s business practices were highly irregular,” he says, while however skeptical that Khodorkovsky has been afforded due process. Wolosky said he was unable to comment on the Russian state’s case against Khodorkovsky.

Wolosky’s political career ended in 2001. But, while he has been largely silent on Russia and its oligarchs since then, he made numerous high-profile public interventions on the Bout case, forcing reluctant officials to keep the gunrunning mastermind on the national security radar. He attributed this reluctance to Bout’s role in performing dangerous airlifting contracts for the United States in Afghanistan and Iraq.

Two thousand and ten finally brought him the public accolades he deserved, for his groundbreaking work in bringing Viktor Bout to justice.

Meanwhile, nearly eleven years after a White House national security official called for Mikhail Khodorkovsky’s prosecution and the renationalization of Yukos, international debate still rages over Khodorkovsky’s jailing, and what it tells us about Vladimir Putin’s Russia. But it is in a very different vein from the debate about Khodorkovsky in 2000. “After the last presidential election, in 1996, the oligarchs captured Yeltsin, his successive governments, and the political process,” wrote Wolosky in 2000. “Regrettably, few signs so far point to significant changes under Putin.” 

January 13, 2011Fragile Freedomshttp://www.russiaprofile.org/page.php?pageid=Business&articleid=a1294943679

By Tai AdelajaRussia ProfileA New Report Says Russia's Fundamental Economic Freedoms Remain Shaky and Could Derail Government Plans to Modernize and Diversify the Nation’s Economy

Economic freedom is still severely challenged in Russia, dimming the prospect of sustained long-term growth and diversification of the country’s hydrocarbons-based economy, according to the authors of the 2011 Economic Freedom Index report released Wednesday by the Heritage Foundation and The Wall Street Journal. Russia ranked 143rd – wedged between Seychelles and Ethiopia – in this year's report, which evaluated 179 countries on the basis of economic openness, competitiveness and the rule of law.

Russia scored 50.5 on the economic freedom scale of 1-100, making it one of Europe’s worst performers. “Russia is ranked 41st out of 43 countries in the Europe region, and its overall score is below the world and regional averages,” the authors of this year’s report said. Last year, the Heritage Foundation also rated Russia 143rd out of 179 countries in its Index of Economic Freedom, citing “weak” protection of private property and a “weak” and “corrupt” judicial system as some of the reasons for the low level of

economic freedom. Russia’s score this year is 0.2 points better than last year, reflecting minor improvements in four of the 10 economic freedoms considered by the analysts.

Areas of notable improvement include fiscal freedom, where Russia garnered 82.7 points bettering the regional average of 76.3 points. The country also did well in the monetary freedom category, scoring 63.1 points against an average of 73.4. However, the report notes that government continues to influence prices through regulation, extensive subsidies, and numerous state-owned enterprises and utilities, which led the evaluators to deduct 15 points from Russia’s monetary freedom score to account for measures that distort domestic prices. Fiscal freedom is the one area in which Russia is at the forefront, says the report. Russia’s competitive flat income tax rate and low corporate tax rates support innovation, although private enterprises must also cope with “informal taxes” such as bureaucratic hassle and corruption, the author said. The report also noted some improvements in the country's labor freedom, awarding it 62.9 points against a regional average of 61.5 points, even though the authors said Russia’s complicated and outmoded labor code continues to limit employment and productivity growth. They pointed out that the non-salary cost of employing a worker in Russia remains high, and dismissing an employee could still prove difficult.

Burdensome regulations continue to hinder private-sector development, while the regulatory system suffers from corruption and a lack of transparency, its editors wrote. Bureaucratic obstacles and inconsistent enforcement of regulations inject considerable uncertainty into entrepreneurial decision-making and are a particular problem for small businesses, said the report’s authors. The report faulted Russia for its prohibitive tariffs, services market barriers, import and export restrictions, non-transparent regulations and standards, discriminatory licensing and complex and non-transparent customs valuation and administration, all of which it says, add to the cost of trade.

Russia’s Investment, Financial and Property Freedom Indexes are 25 to 40 points negative in this year’s ranking, indicating that on-going government efforts to boost the investment climate are yet to bear fruit. An increasingly statist approach to economic management adds to the cost of investment and mutes private-sector dynamism, said the report’s authors. Other deterrents to investment, they said, include inconsistent and burdensome government regulation, unreliable contract enforcement, inadequate infrastructure and financial capacity, and corruption. “Pervasive corruption and limited respect for property rights hinder the development of economic activity that is free from government control or influence,” the authors wrote. “Macroeconomic instability is a drag on economic growth.”

As far as the Financial Freedom Index is concerned, Russia’s small, undeveloped financial sector remains vulnerable to heavy government influence, the report noted. State-owned banks continue to dominate the banking sector and account for over one-third of the sector’s total assets. Despite improvements to the banking regulation in 2006, bank supervision and transparency are insufficient, the report says, stressing that the more than 1,000 licensed and registered Russian banks are generally small and undercapitalized. Another drawback, according to the report, is that capital markets are

relatively small and are dominated by energy companies. However, the global financial turmoil appeared to have provided an impetus for bank consolidation with more than 60 banks eliminated. But the government prevented the closure of large lenders while channeling large amounts of state funds to prop up failing financial institutions, according to the authors.The report says that Russia’s increasingly centralized government, which has tightened controls on civil society in recent years, poses serious challenges to economic freedom. “Dmitry Medvedev was elected president in March 2008, but former President Vladimir Putin remains prime minister and leader of the ruling United Russia party,” the authors noted.

Medvedev’s efforts to improve the rule of law have stalled. The state has reasserted its role in the extractive industries and depends heavily on exports of natural resources, especially hydrocarbons.” The report also listed other negative moments that have constrained economic freedom including the global financial crisis, overregulation, pervasive corruption, and the war with Georgia which sparked capital flight in 2008, triggering GDP contraction in 2009.

Among its former Soviet peers, Russia surpassed only Belarus, Uzbekistan and Ukraine, which are placed 155, 164 and 165 respectively. Georgia, along with the Baltic States of Estonia, Lithuania and Latvia, is one of the strongest performers, placing 29 with 70.4 points. Estonia though remains the region’s best performer, taking 14th place with 75.2 points, one of the highest in Europe. Russia also performed worse than its BRIC peers - Brazil, India and China. Brazil led the pack in 113, with 56.3 points, while democratic India and communist China placed 124th and 135th respectively. Soon-to-be BRIC member, South Africa outperformed the rest in the degree of its economic freedoms, placing 74 with 62.7 points.

Though Russia inched forward one point on this year’s Freedom from Corruption Index compared to last year’s, the authors said corruption is still pervasive in the country. Russia has remained one of the world’s most corrupt countries ranking 154th out of 178 countries in Transparency International’s Corruption Perceptions Index for 2010. The authors conclude that corruption is rampant, both in the number of instances and in the size of bribes sought, adding that neither president Medvedev’s Council for the Fight Against Corruption, which was established in the spring of 2008, nor the anti-corruption legislation of December 2008 has been effective in reducing corruption. President Medvedev, who has made the fight against corruption one of his priority goals, will hold a meeting of the presidential Anti-Corruption Council on Thursday, RIA Novosti reported.

The 2011 Index of Economic Freedom covers 183 countries around the world, 179 of which are ranked with an economic freedom score based on 10 measures of economic openness, regulatory efficiency, the rule of law, and competitiveness. Countries that score well demonstrate a commitment to individual empowerment, non-discrimination and the promotion of competition. Their economies tend to perform better, and their populations

tend to enjoy more prosperity, better health and more positive measures on a variety of quality-of-life indices, said the Index's editors.

Hong Kong and Singapore topped this year’s ratings, clinching first and second positions respectively for the 17th straight year. But Singapore cut into Hong Kong’s lead significantly this year, mainly on the strength of a better score in anti-corruption and a significant gain in financial freedom. Australia and New Zealand ranked third and fourth respectively, maintaining their positions from last year. War-torn Rwanda, which in recent years enacted reforms aimed at improving its competitiveness and entrepreneurial environment, is the world’s most-improved country overall. The United States dropped to ninth place in the 2011 Index, with its lowest economic freedom score in a decade, and the United Kingdom fell all the way to 16th place.

Overall, the Index registered a widespread rebound for 2010, as the average score increased to 59.7 from the 59.4 registered in 2009 and over half of the 183 countries listed this year improved their scores. The good news, especially for the world’s poor, is that economic freedom is rising around the world, Terry Miller, director of the Heritage Foundation’s Center for International Trade and Economics, writes in The Wall Street Journal. “Countries gaining economic freedom have done a much better job over the last decade in eliminating poverty,” Miller writes. “Individuals want control of their own lives. They want governments that facilitate, not tsars that coerce or command." 

Lunev case: abduction of FSB radio operator http://eng.expertclub.ge/portal/cnid__7338/alias__Expertclub/lang__en/tabid__2546/default.aspx

13/01/2011 15:05 Levan Kiknadze

The Club of Experts continues to publish little-known facts of Russia's participation in the Abkhazian war against sovereignty and territorial integrity of Georgia. This story describes events that took place in Sukhumi in the spring of 1993. Georgian Intelligence Service established a radio operator who was transmitting intelligence information to the enemy and lured him out of the location of the Russian military base ...

Headquarters of the FSB Border Unit in Sukhumi had a well-equipped international cable systems and radio communications. In addition to the direct purpose - implementation of measures to protect the border of Georgia - these systems were widely used by the Russian security services in spying activities during the Abkhazian war of 1992-1993. In particular, telegrams with intelligence content were passed from Sukhumi mainly to the Russian military base in Gudauta. From there, if necessary, this information was sent to headquarters of the Abkhazian side. This was a conclusion which Information and Intelligence Service of Abkhazia reached as a result of evidence of the arrested GRU

agent lieutenant Sitnikov and on the basis of radio intercepts acquired by a mobile group of radio counterintelligence that were sent to Sukhumi during the fighting.

However it was impossible to completely decipher materials due to the fact that Russian used classified communications equipment (ZAS), which automatically encrypted talks. But those materials that were subject to decoding, as well as individual phrases, orders and regulations transmitted in the open air, and intensity of the radio exchange before fighting clearly indicated that the Russian military actually led the fighting in Abkhazia and that Abkhazian armed formations with their headquarters were only supplement to them. The same picture emerged from unencrypted radio transmits of Abkhazians that were in Abkhazian language. Translating them into Georgian never presented a difficulty.

In the beginning of April of 1993 the said mobile group of radio counterintelligence recorded sessions of radio communication from the territory of the border detachment of FSB in Sukhumi. These radio communications contained information of intelligence nature about Georgian armed formations, their locations, weapons, etc. In response we addressed the command of border detachment and presented them with audio recordings of these communication sessions several times. But we received a denial of connection of the Russian military with what was happening and it happened in a very offensive and derisive manner. Commander of the detachment Chistousov cynically said that the Georgian counter-intelligence mixed up places and that it would have been better to look for a spy in the Georgian units. Ostensibly, according to the Russian border service, specified radio station belonged to one of the Georgian units and it was from there that intelligence in favour of the separatists was being carried.

Irritation of the Russian military was quite understandable. And especially after the failure of the GRU spy. It was clear that, despite the promise of neutrality, the Russian security services continued to cooperate with the Abkhazian side. Intensity of communication sessions particularly increased in mid-April and an operator regularly transmitted information to the enemy about locations of Georgian anti-aircraft artillery units, movement of armoured vehicles and troops, transportation of military cargo, situation in Sukhumi, etc. Co-operation with the Abkhazian side was clearly evident as part of the radio messages were transmitted to "one hundredth" which was the call sign of Sergei Shamba. But we lacked evidence necessary for criminal persecution and we could not get more. Therefore, the Information and Intelligence Service of Abkhazia has decided to bypass the formal side of things and establish a radio operator, to arrest him outside a military unit and then put the command of the Russian military unit before the fact.

As a result of operational and technical measures we managed to succeed in establishing one of the radio operators, get in contact with him and fraudulently lure him out of the location of his unit. The radio operator was a Russian border guard Sergeant Alexander Lunev, born in 1973, a native of Lisichansk in the Lugansk oblast. After several days of shadowing a group of surveillance registered Lunev among Russian soldiers who temporarily left the territory of their unit and went into town for shopping. The

surveillance team informed an action team about this, after which the radio operator was arrested without any noise.

A tape recording of materials that he sent was given to a sergeant in the Information and Intelligence Service of Abkhazia. Lunev was forced to confirm that it was his voice that was recorded on the tape and that it was he who conducted these communication sessions. The radio operator also said that during his duty staff officer often brought previously compiled radiograms, which were then transmitted to "sixth". There often were dispatches for "one hundredth" as well. Names of "sixth" and "one hundredth" were unknown to Alexander Lunev. The sergeant acknowledged that his actions undermined defence capability of Georgia, but said that he acted because he was under orders from the command, with no personal intentions and goals.

The same day chairman of the Information and Intelligence Service of Abkhazia Major-General I. Keshelava officially invited commander of the Sukhumi border unit Colonel Chistousov and his deputy Colonel Sayganov. Russian officers were told that the actions of Lunev showed signs of a crime that damaged combat effectiveness of the Armed Forces of Georgia and it was specified in the 66th article of the Georgian Criminal Code. Chistousov and Sayganov were also told that since the extracted materials are not sufficient grounds for criminal prosecution it was decided to issue official warning to Lunev. Anxious colonels who were in an awkward position calmed down when they learned that we were not going to arrest the sergeant and issue charges against him.

Russian officers also rightly understood our warning. Colonel Chistousov promised an internal investigation and stern actions against his subordinates who were directly involved in espionage against Georgia, who extracted intelligence information, prepared and broadcasted radio messages. The commander of the border unit also promised that his part would strictly observe neutrality and perform only their direct responsibilities for protecting the state border of Georgia. Preventive measures carried out by the Information and Intelligence Service of Abkhazia were recorded on magnetic tape and the fact itself was highlighted in the media.

It should be noted that the case of Lunev was a result of tightening our control for maximum protection against leakage of intelligence information. This issue has been on the agenda after the Information and Intelligence Service of Abkhazia identified and detained Russian spy Alexander Sitnikov. At that, clear support for the Abkhazian separatists from the commander of the Sukhumi border unit Colonel Chistousov and his deputy Colonel Sayganov, as well as Generals Chindarov, Sorokin and Alekseev of Russian military forces in Gudauta was established.

The Club of Experts have already written that after the collapse of the Soviet Union Moscow not only did not eliminate departments of the KGB that oversaw the Georgian direction, but on the contrary, it formed a single centre, under the direct authority of which was put special structure of the Transcaucasian Military District (ZakVO). Its main task was to implement agent-operative work taking into account realities formed in the South Caucasus, in particular, in Georgia. Such activities did not pose any difficulty for

the Russian security services, especially in regions where Russian military base, structural units of the Russian Armed Forces and border troops were deployed.

Abkhazia particularly stood out in this regard. Russia had the following in the region: the Gudauta military base and landing-assault division that was introduced there to perform a special mission; secret laboratory of Eshera; assault battalions in areas of tourist facilities and lighthouse in Sukhumi... and of course, border troops of the FSB, which controlled the entire Abkhazian coast from Psou to the village of Primorskoe in the Gali district. During the war Activities of the Russian special services in Abkhazia were controlled mainly from Gudauta where all intelligence information flowed. The situation was complicated by the fact that the headquarters of the Sukhumi border detachment of FSB was located in the rear of Georgian troops, near the front line and practically served as agents. It was a good cover, which allowed the Russian military to camouflage all actions against Georgia under arrangements for the border protection.

It is difficult to imagine how the Georgian side even managed to defend Sukhumi in an environment where the enemy was aware of all tactical movements of our forces, manoeuvres, delivery of military goods, etc. Meanwhile, in the rear of the Georgian troops armed forces of Loti Kobalia acted clearly treacherously and in favour of the enemy. They systematically prevented military provision to our troops, not to mention treacherous orders from Kobalia, because of which units of supporters of the first President of Georgia left the front line without authorization. In this situation, all our attempts to resist the enemy that advanced from all sides were inefficient and almost devoid of meaning. However, the Information and Intelligence Service of Abkhazia still spared no effort and energy to, if not, stop, at least expose as much as possible alliance between Russia and the Abkhazian separatists and make facts confirming this alliance a subject of international discussion. 

National Economic Trends

01/14 11:44   Russian imports from non-CIS countries up 36% at $197 bln in 2010 – FCShttp://www.interfax.com/news.asp

Russia's Jan-Nov trade surplus up 24% to $147.6 blnhttp://en.rian.ru/business/20110114/162142030.html

12:17 14/01/2011

MOSCOW, January 14 (RIA Novosti) - Russia's trade surplus widened 24% in January-November 2010 to $147.6 billion, the Federal Customs Service said on Friday.

"The trade surplus amounted to $147.6 billion, or $28.6 billion more than in January-November 2009," the service said.

Surplus in trade with non-CIS countries rose in the first eleven months by $29.4 billion to $126.2 billion, while surplus in trade with CIS countries fell by $0.8 billion to $21.4 billion.

Russia's exports increased 30.8% year-on-year to $350.1 billion, including $301.6 billion exports to non-CIS countries.

The main export item to non-CIS countries was fuel and energy, which accounted for 70.6% of the sales compared to 69.7% year-on-year.

Russia's imports rose 36.3% year-on-year to $202.4 billion.

On Thursday, Russia's central bank said that the country's 2010 trade surplus increased $37.6 billion to $149.2 billion, while the current account surplus soared 50% to $72.6 billion.

TABLE-Russia monetary base hit 5.91 trln rblshttp://in.reuters.com/article/idINLDE70D07020110114

Fri Jan 14, 2011 12:39pm IST

MOSCOW, Dec 31 (Reuters) - Russia's monetary base rose to arecord high of 5,912.8 trillion roubles ($196.1 billion) on Jan.11 compared with 5,635.7 trillion roubles on Dec. 27, thecentral bank said on Friday.…

Russia: grain export absence is not only the negative role, but also the positivehttp://www.agrimarket.info/showart.php?id=102886

01/14/2011 09:37  

Grain export absence in Russia plays not only the negative role on the market, but in particular, plays the positive role for grain producers, stated Sergey Derjavin, the Head of the Agricultural Department of CJSC “SGS Vostok Limited”.

According to him, a lot of producers during the slack period started worrying about the applied agrarian technologies during agricultural commodities growing, effecting grains quality a lot. And first of all, it is soils fertility issue, on which depends not only yield,

but also gradity of grown wheat. Some producers started applying new technologies, and finally may receive grain harvest volume increase till the level of 30%.

Business, Energy or Environmental regulations or discussions

Uralkali, Mechel, Polyus Gold: Russian Stock-Market Preview http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aiE5f6uTy1D0

By Anna Shiryaevskaya

Jan. 14 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close in Moscow.

The 30-stock Micex Index fell 0.6 percent to 1,749.75, the first decline this year since Russian trading resumed on Jan. 11 after public holidays. The dollar-denominated RTS Index rose 0.5 percent to 1,878.14.

OAO Uralkali (URKA RX): Uralkali said ISS Proxy Advisory Services recommended that shareholders of Uralkali and OAO Silvinit vote for a proposed merger between the two. Uralkali, Russia’s largest potash producer by market value, rose 1.5 percent to 223.61 rubles.

OAO Mechel (MTLR RX): Copper fell for the first day in three in New York on concern demand may wane as growth slows in China, the world’s biggest consumer of the metal. Russia’s biggest producer of coal for steelmakers declined 1.5 percent to 955.11 rubles.

OAO Polyus Gold (PLZL RX): Gold futures fell for the first time this week after government bond sales in Portugal and Spain eased concern that the European debt crisis will spread, eroding the appeal of the precious metal as a haven. Shares of Russia’s biggest gold miner fell 2.4 percent to 1,882.14 rubles.

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

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

Last Updated: January 13, 2011 22:00 EST

Micex starts trading in Belarus's bonds

http://www.rbcnews.com/free/20110114105509.shtml

      RBC, 14.01.2011, Moscow 10:55:09.Russia's Micex stock exchange has launched trading in Belarus' series 01 non-convertible interest-bearing certificated government bonds worth RUB 7bn (approx. USD 233m) today.

      As reported earlier, Belarus's two-year bond issue was placed on Micex on December 23, 2010. The annual rate of the first coupon was set at 8.7 percent. The rates of the second through eighth coupons are equal to that of the first coupon.

Russian IPOs: a cheat sheet for investorshttp://blogs.ft.com/beyond-brics/2011/01/14/russian-ipos-a-cheat-sheet-for-investors/

January 14, 2011 7:00 am by Courtney Weaver

While bankers were quick to herald the return of Russian oligarchs and billion-dollar City listings last year, this year the wise ones are greeting forecasts of $30bn in equity issuance with a bit more caution.

To be sure, the $1bn listing of internet power group Mail.ru last November has done much to revive the market. Mail.ru’s London-listed depositary receipts are now trading at close to $42, nearly double the initial $27.70 share price, and the frenzy has sparked talk that Russian internet search engine Yandex is planning to follow in Mail’s footsteps.

Yet the group was one of the few to make it out of the door, and the only Russian company to price at the top of its indicative range. While the UK shares of Transcontainer, the rail freight provider, and St Petersburg grocer O’Key now trade a comfortable 25 per cent and 30 per cent above their late autumn initial share prices, there were just as many Russian companies that stumbled before they reached the market.

So which of the planned Russian IPOs, now eleven and counting, will actually make it out of the gate this year? beyondbrics presents a cheat sheet to help you distinguish the ducks from the swans.

Rule No 1: Pricing is everything

While City investors may have been willing to pay a pretty price for any company hailing from Novosibirsk or Novokuznetsk three years ago, in 2011 investors are more savvy and more apt to do their homework. Investors are only going to buy in if it’s at the right price and there’s a cushion for shares to rise afterward.

Among the contenders hoping to raise $1bn or more are EuroSibEnergo, the electricity producer controlled by Oleg Deripaska; Moscow airport Domodedovo; and Metalloinvest, the metallurgical group controlled by Arsenal shareholder Alisher

Usmanov. But if Mail.ru and O’Key are any example, big natural resources companies are not all investors are thinking about.

Rule No 2: It’s not all about the oil

While there are many traditional resource giants on the list including Koks, the pig iron and coking coal group, and Severstal Gold, a number of standouts on the list have nothing to do with oil, gas or mining. Yevroset, Russia’s biggest handset retailer and a pioneer on Russia’s retail market, is planning to list up to 30 per cent of its shares in a London listing, while telecoms monopoly Svyazinvest is preparing to list a soon-to-be-created entity as part of the government’s asset sale programme.

Rule No 3: Don’t call it a comeback

2010 saw many Russian companies that planned to list pre-crisis creep back to the market again, yet most scuttled away just as soon as they got to the door. 2011 will see the return of some of these contenders including EuroSibEnergo and Metalloinvest. But as Usmanov himself has made clear, these companies will only look to the equity markets if they think the timing is right. Russian media group Prof Media proved last year that funding is often cheaper through loans or on the debt market, and other companies hoping to revive pre-2008 bids, like Nomos Bank, which is aiming to raise $600m in a dual London-Moscow listing, according to Reuters, may find that the timing is still not right because . . .

Rule No 4: Investors have a longer memory than you think

EuroSibEnergo delayed its $1bn-plus Hong Kong listing in November as it waited to finalise a stake sale to China’s Yangtze Power. But as the utility seeks to raise the money it needs to pay back debt and fund future development, it will need to be mindful of the experience of the main Deripaska show, Rusal, which has given investors a rocky ride when it listed in Hong Kong last January. Shares in the debt-saddled Rusal plunged close to 40 per cent in the first six months, only climbing back to the initial share price at the end of the last year. Today the shares are 8 per cent above the offering price, a blip of hope for the EuroSibEnergo’s of 2011 – and the investors buying them.

Palladium to Jump on Auto Sales, Russia, Ikemizu Says (Update1) http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=avEwEBW883c8

By Aya Takada and Yasumasa Song

Jan. 14 (Bloomberg) -- Palladium may extend a rally this year as surging car sales in China boost demand, while supply from top exporter Russia may drop as stockpiles dwindle, the head of commodity trading in Japan at Standard Bank Plc said.

The metal, used in pollution-control devices, may reach $1,000 an ounce for the first time since 2001, when the price jumped to an all-time high of $1,125, said Bruce Ikemizu, who’s traded commodities for more than 24 years. Palladium traded at $808.75 an ounce today.

Precious metals have advanced as the European Union bailed out Greece and Ireland, prompting investors to seek a haven against weaker currencies and financial turmoil. Last year, gold rallied 30 percent, silver 83 percent, platinum 21 percent and palladium almost doubled as the Federal Reserve kept borrowing costs low and bought bonds to boost growth.

“Car sales expansion will boost palladium as the industry is the biggest consumer,” Ikemizu said in a Jan. 12 interview in Tokyo. “Supply may become unstable as stockpiles of the metal held by the Russian government may have almost depleted.”

Palladium for immediate delivery touched $823.95 an ounce yesterday, the highest level since March 2001. The price, which has quadrupled in the past two years, advanced as the global economy recovered from recession, boosting industrial demand.

Vehicle Sales

The metal will extend a rally as a recovery in U.S. vehicle sales adds to continued expansion in emerging markets, including China and India, boosting demand amid uncertainty about Russian shipments, Ikemizu said.

China’s vehicle sales will grow by about 10 percent to 15 percent this year after jumping 32 percent to 18.06 million units in 2010, according to the China Association of Automobile Manufacturers.

Russian supply increased 2.1 percent to 3.71 million ounces last year, representing 52 percent of global supply, according to a November report from Johnson Matthey Plc, a London-based refiner. Of Russia’s total, 1.01 million ounces was drawn from stockpiles, the company estimated.

OAO GMK Norilsk Nickel, the world’s biggest palladium producer, said last month it expects Russia’s state repository Gokhran to sell “insignificant” amounts in 2011 before exiting from the global market in 2012. The company may also supply the metal to exchange-traded funds, it said.

“Russia is said to be completing palladium sales from the state reserves,” Ikemizu said. “There are concerns about supply” as the nation’s shipments may become as small as its production level, he said.

2001 Record

Palladium soared to a record in January 2001 as disruption to Russian shipments spurred speculators on the Tokyo Commodity Exchange to buy back contracts. The bourse was the largest for palladium futures at the time. The most-active contract jumped to an all-time high of 3,710 yen a gram on Jan. 29, 2001. It rose 2 percent to 2,178 yen yesterday.

Palladium supply exceeded demand by 45,000 ounces last year, the smallest amount since a shortage in 2000, according to the Johnson Matthey report. Sales from Russian state stockpiles were the third-biggest contributor to world supply after mine output from Russia and South Africa, it said.

Electric Cars

“Palladium may drop to around $750 if the U.S. government takes steps to promote sales of electric vehicles, which do not emit exhaust gases and do not require palladium-based auto- catalysts,” Kazuhiko Saito, chief analyst at Tokyo-based broker Fujitomi Co., said by phone.

Ford Motor Co., the second-largest U.S. carmaker, introduced its first electric car this month, following rival products from Nissan Motor Co. and General Motors Co. last year.

Sales growth for conventional, fuel-powered vehicles may also boost platinum to as high as $2,000 an ounce this year, Ikemizu said. The price, which was at $1,804.38 an ounce today, gained to $1,829.50 yesterday, the highest level since July 2008.

Platinum is unlikely to drop to less than $1,600 an ounce given the costs to produce the metal in South Africa, the world’s biggest supplier, he said. The metal is mainly used for catalysts in diesel vehicles, which are popular in Europe.

“Palladium will benefit more from car-sales growth as it is more affordable than platinum,” said Saito at Fujitomi. “Platinum isn’t used much as an auto catalyst in China, where demand for jewelry fabrication is strong.”

To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net; Yasumasa Song in Tokyo at ysong9@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Last Updated: January 13, 2011 21:09 EST

VimpelCom, Wind to Review New Deal This Weekend, Vedomosti Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=afUEDeNeXByA

By Ilya Arkhipov

Jan. 14 (Bloomberg) -- VimpelCom Ltd. will discuss a revised offer for Wind Telecom SpA when the boards of the two companies meet Jan. 16, Vedomosti reported, citing unidentified people familiar with the matter.

A new deal may include more preferred shares for Egyptian billionaire Naguib Sawiris, who controls Wind, formerly known as Weather Investments SpA, the Moscow-based newspaper said. VimpelCom shareholder Telenor ASA of Norway rejected VimpelCom’s $6.5 billion offer for Wind last year.

The revised deal may exclude Sawiris from the board of the new company, though additional preferred stock would give him a greater voting share without the right to dividends, according to the newspaper.

To contact the reporter on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editor responsible for this story: Brad Cook in Moscow at Bcook7@bloomberg.net

Last Updated: January 14, 2011 00:40 EST

Vimpelcom board to review Sawiris deal Sunday-papershttp://af.reuters.com/article/egyptNews/idAFLDE70D09M20110114

Fri Jan 14, 2011 7:57am GMT

MOSCOW Jan 14 (Reuters) - Vimpelcom's (VIP.N) board will on Sunday discuss a revised deal for Naguib Sawiris' telecoms assets that will see the Egyptian tycoon get no seats at the merged company's board, Russian newspapers reported on Friday.

The new offer is designed to secure the support of key Vimpelcom shareholder, Norway's Telenor (TEL.OL), which last month opposed the $6.6 billion bid for control of Egypt's Orascom Telecom (ORTE.CA) and Italy's Wind. [ID:nLDE6BK03A]

Kommersant and Vedomosti quoted unnamed sources as saying Sawiris will instead receive more economic rights through a new issue of preferred shares which have the same voting rights as ordinary shares but provide no dividend payments.

Sources told Reuters last year the company could issue 305.6 million preferred shares to public investors as well as Sawiris. [ID:nLDE68C0N6]

Kommersant also wrote that under the new scheme Sawiris will take on the risk related to the possible nationalisation by the Algerian government of Djezzy -- Orascom's biggest single source of revenue. [ID:nLDE7090ZT]

The paper added that the value of the deal could also be adjusted.

Vimpelcom and Altimo both declined comment.

Telenor was not immediately available for comment. (Reporting by Maria Kiselyova, Editing by John Bowker and Hans Peters)

Russia's Inter RAO to buy Nortgaz for $1.5 bln – paperhttp://in.reuters.com/article/idINLDE6BC0FK20110114

11:42am IST

MOSCOW, Jan 14 (Reuters) - Russia's state-controlled power trader Inter RAO has agreed to purchase a 49 percent stake in gas producer Nortgaz for $1.5 billion, Vedomosti newspaper reported on Friday.

Sources told the business daily that the deal would be announced in the coming days, but only after Russia's state-owned energy giant Gazprom , which owns 51 percent in Nortgaz, agrees to it.

Inter RAO will buy the stake from the British holding company Redi, controlled by Farkhat Akhmedov.

Nortgaz's gas reserves are located in Russia's Arctic Yamal Nenets region. In 2010 the company produced 3 billion cubic metres (bcm) of natural gas and plans to increase this to 4 bcm this year. (Writing by Jessica Bachman; Editing by Muralikumar Anantharaman)

Russian Railways assesses controlling stake in Freight One

http://www.rbcnews.com/free/20110114102658.shtml

      RBC, 14.01.2011, Moscow 10:26:58.State-owned railroad monopoly Russian Railways estimates the value of a 50-percent plus one share stake in its subsidiary Freight One at between $5bn-$6.5bn, company's President Vladimir Yakunin told reporters yesterday. "It is still early to announce the exact value, but I can cite a range of $5bn-$6.5bn for the stake," Yakunin said, adding that the decision on the date and method of sale would be made by the government.

      According to Transportation Minister Igor Levitin, his ministry proposed selling either 50 percent plus one share or 75 percent minus one share of Freight One, a major Russian rail freight operator, sometime in the first half of this year.

      The government is considering options for selling the shares: through an IPO or to a strategic investor. "If the Economic Development Ministry decides that the appraisal of Freight One does not fully reflect the stake's value, 10 to 15 percent of shares could be floated and then the remainder of shares would be sold based on the IPO results," the minister explained.

January 14, 2011 10:18

RZD values 75% of Freight One at $5 bln-$6.5 bln (Part 2)http://www.interfax.com/newsinf.asp?id=214833

MOSCOW. Jan 13 (Interfax) - Russian Railways (RZD) (RTS: RZHD) has valued the 75% stake in subsidiary Freight One that it plans to sell in 2011 at $5 billion-$6.5 billion, RZD chief Vladimir Yakunin said at a briefing on Thursday.

"I can specify the range in which we figure the company's value is. It is from $5 billion to $6.5 billion for that controlling packet being offered for sale," Yakunin said.

However, Russian Transport Minister Igor Levitin has pointed out that no final decision has yet been made on how to sell the 75% stake. He said his ministry thinks it will happen during H1.

Foreigners Eye Moscow Airport http://www.themoscowtimes.com/business/article/foreigners-eye-moscow-airport/428836.html

14 January 2011Interfax

Foreign airport operators are showing interest in the management of Sheremetyevo International Airport, Transportation Minister Igor Levitin said Thursday.

"An assessment is underway of Terminal D and Sheremetyevo's assets," he said.

Levitin said an expert estimate had shown that it is impossible to separate the management of Sheremetyevo and Terminal D. "The experience this winter has shown that," he said.

A managing company will be brought in for the combined asset after a total assessment is completed, Levitin said. "Major European operators and from Southeast Asia [the

operator of the Singapore airport] have been in contact, as well as American operators," he said.

Levitin also said the main fault of Aeroflot’s management during the mass flight delays from Dec. 26 to 29 was its inability to make temporary flight schedules, even though they had aircraft and crews.

The minister said, “This matter will be considered at the next board of directors meeting.”

Levitin also said that although foreign airlines had delays, in contrast to Aeroflot, they gave their passengers objective information.

Rosatom to energise market with debut loan http://www.euroweek.com/Article/2749193/Channel/2021/Rosatom-to-energise-market-with-debut-loan.html

Issue: 1187 - 14 January 2011

Russian nuclear power company Rosatom is in talks with four banks for its debut syndicated loan. The state-owned firm will syndicate a $400m loan with a margin of 225bp, though the company may increase the transaction to $500m. BTMU, Deutsche, Nordea and Société Générale are in talks with the borrower to lead the deal. ..

Sedmoi ‘to Buy’ Mosmart http://www.themoscowtimes.com/business/article/sedmoi-to-buy-mosmart/428864.html

14 January 2011

Alexander Zanadvorov, main owner of the Sedmoi Kontinent supermarket chain, has agreed to buy the smaller Mosmart chain for $498 million, sources said Thursday.

Zanadvorov will finance part of the acquisition with a loan of almost $333 million from Sberbank, which currently owns 50 percent of Mosmart. Zanadvorov owns 96 percent of Sedmoi Kontinent.

The other shareholders in Mosmart, which estimated its 2010 sales at $333 million, are Bacarella Holding investment fund and Cyprus-based Sarnatus Trading. They represent the interests of Russian businessmen.

(Reuters)

Aeroflot to spend $10 million on free tickets for victims of December flight delayshttp://rt.com/news/line/2011-01-14/#id1199

RT News line, January 14

Aeroflot is to pay 10 million US dollars as compensation to passengers who suffered during flight delays in late December. A representative of the company announced the compensation would be given in the form of a registered voucher that can be exchanged for one free airplane ticket during 2011. He also said that compensation would be given only to passengers whose flights were delayed from December 25 to 29 for more than eight hours. However, the sum stipulated in the voucher will not include airport fees. According to Aeroflot estimations, passengers on 198 flights, that is almost 24,000 people, may claim compensation for December delays caused by electricity outages in Moscow airports.

Russia: Light vehicle market expands 30% in 2010http://www.automotiveworld.com/news/emerging-markets/85456-russia-light-vehicle-market-expands-by-30-in-2010

By: David Isaiah, Friday, January 14, 2011, AutomotiveWorld.com

Sales of new passenger cars and light commercial vehicles in Russia rose by 30% year-on-year in 2010 to 1,910,573 units. Comparatively, the country's automotive industry had accounted for sales of 1,465,742 light vehicles in 2009.

According to the Association of European Businesses Automobile Manufacturers Committee (AEB AMC), last year light vehicle sales in Russia showed growth for nine months out of twelve.

"A strong December showing growth of 60% brings the full-year market volume to 1.91million units, up 30% compared to 2009. The recovery of the Russian market has continued to exceed our original forecast and has developed a clear positive trend from April of 2010. The AMC forecast for 2011 is 2.24 million passenger cars and LCVs sending a clear signal that Russia's progress to be number one market in Europe is back on track," said AEB AMC chairman David Thomas.

Sales at AvtoVAZ/Renault-Nissan topped Russia's light vehicle market, accounting for 697,901 units. This was 42% more than their combined sales in Russia last year, of 490,625 units. General Motors followed in second place, selling 159,376 vehicles (+12%), while Volkswagen Group managed 131,312 units (+40%).

Among the major vehicle manufacturing groups operating in Russia, only Mazda (-19%), Honda (-22%) and Subaru (-11%) posted declining figures from 2009 levels.

By brand, AvtoVAZ's Lada was the most popular, accounting for sales of 517,147 vehicles last year (+48%). Chevrolet followed, selling 116,233 units (+11%), while Kia managed 104,235 light vehicles (+49%).

The four most popular cars in Russia in 2010, by way of sales volume, were all Lada-branded units. The Lada 2105/2107 led this list, posting sales of 136,006 units, up 102% year-on-year.

"2010 was very encouraging and as the economy improved, on the back of stronger oil prices, consumer confidence has started to come back. The outlook for 2011 is positive provided that the economy and the rouble continue to strengthen. The extension of the utilisation programme and the presidential loan scheme is also welcome, although it is worth noting that over 80% of sales on the utilisation programme has gone to the cheaper domestic brands," said Mark Ovenden, vice chairman of AEB AMC.

Published on Friday, January 14, 2011

Prosperity Capital Management buys 5.64% in RGI developer - paperhttp://en.rian.ru/business/20110114/162141750.html

11:40 14/01/2011

MOSCOW, January 14 (RIA Novosti) - Prosperity Capital Management investment firm branched out into real estate in the fourth quarter of 2010 by acquiring a 5.64% stake in RGI International property company, RBC Daily said on Friday.

RGI International Prosperity bought the shares on the open market, RBC said.

Before the acquisition, Prosperity Capital Management's portfolio included food and retail firms, as well as telecoms and power companies stakes, RBC Daily said. In the construction sector, Prosperity Capital Management is a minority stakeholder in Iskitimtsement cement plant, controlled by RATM Holding's owner Eduard Taran.

RGI International is owned by D.E.S. Commercial Holding, which holds a 40.22% stake, Synergy with a 22.25% stake, Morgan Stanley with a 6.6% stake, Kensington Gore with a 5.38% stake and Lansdowne with a 4.76% stake. The remaining 20.8% is free float.

The developer's five projects are estimated at $759.2 million. The firm is to build 1.4 million square meters of residential and commercial property, with the lion's share to be constructed in the mass housing segment, which is new for the developer.

For the Record http://www.themoscowtimes.com/business/article/for-the-record/428866.html

14 January 2011

U.S. grain distributor Cargill said its profit more than tripled, reaching $1.49 billion, in the three months ending Nov. 30, up from $489 million a year earlier, thanks to the company’s quick work to meet Egyptian demand for wheat imports with European Union grain after a drought curbed supplies from the Black Sea region. (Bloomberg)

Raspadskaya said in an e-mailed statement Thursday that raw coal output slumped 32 percent to 7.16 million tons last year, with fourth-quarter production at 1.27 million tons, an increase of 15 percent from the previous three-month period. (Bloomberg)

City Hall is seeking to sell its 22.32 percent stake in oil producer and refiner Sibir Energy, valued at an estimated $900 million, and is starting talks with Gazprom Neft, which controls Sibir, Kommersant reported, citing unidentified sources. (Bloomberg)

Uralkali, Russia’s largest potash producer, said its trader Belarusian Potash agreed to a six-month supply accord with China to deliver 600,000 tons of the crop nutrient at $400 a ton, including freight, with an option for 120,000 additional tons, Uralkali said Thursday in a regulatory statement. (Bloomberg)

LUKoil said in a statement Thursday that oil output fell to 96 million tons last year, while gas output rose more than 12 percent to 20 billion cubic meters. (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

Russia's Transneft Q3 net down 15 pct, revenues uphttp://af.reuters.com/article/energyOilNews/idAFLDE70D01U20110114

Fri Jan 14, 2011 5:27am GMT

MOSCOW Jan 14 (Reuters) - Russia's state-owned oil pipeline monopoly Transneft (TRNF_p.MM) saw its 2010 third quarter net profit fall 15 percent year-on-year to 31.65 billion roubles ($1.05 billion), the company said on Friday.

In the same period in 2009 the company reported a net profit of 37.26 billion roubles.

The company's revenues for the July-September period, however, increased 27.4 percent to 113.6 billion roubles compared to 89.15 billion roubles during the same period in 2009.

(Writing by Jessica Bachman; Editing by Alexei Anishchuk)

14.01.2011

CEO: Transneft May Acquire Vankor-Purpe Pipeline in Kozmino Tradehttp://www.oilandgaseurasia.com/news/p/0/news/10308

Rosneft could give the Vankor-Purpe oil pipeline to Transneft in return for the Kozmino crude loading port, Transneft CEO Nikolay Tokarev said.

According to Tokarev, Rosneft could use Kozmino to load regional refineries which the oil company is planning to build.

However, Tokarev clarified that Transneft is looking at several ways to acquire of the pipeline.

Copyright 2010, Oil and Gas Information Agency. All rights reserved.

Transneft Blasts $4Bln ‘Information Campaign’ http://www.themoscowtimes.com/business/article/transneft-blasts-4bln-information-campaign/428838.html

14 January 2011Combined Reports

Allegations that $4 billion was stolen from Transneft during construction of the Eastern Siberia-Pacific Ocean pipeline, or ESPO, were triggered by Russia's expansion into new energy markets, Transneft president Nikolai Tokarev told journalists Thursday.

Tokarev said there were similar "information campaigns" during the construction of the Baltic Pipeline System and at the beginning of the ESPO pipeline project.

"They wouldn't let us build. We were left dangling," Tokarev said. "Thanks to those projects, Russia has received serious economic and political benefits, including an outlet to the Asia-Pacific market," he said.

Tokarev acknowledged some irregularities in the ESPO project.

"There were problems and shortcomings, but they were discovered independently by Transneft itself. All of the information was dispatched to the appropriate agency," he said. As a result, Transneft was able to recover $333 million from contractors.

"We estimated that at least $4 billion was stolen throughout this entire episode," Alexei Navalny, a Transneft shareholder, said on his blog, where he has published material prepared by Transneft at the request of the Audit Chamber.

A law enforcement source told Interfax at the end of December that searches were being conducted in Moscow in connection with a criminal case on the theft of Transneft money during the ESPO construction. However, he said, the criminal case was opened in 2008 at the request of Transneft's new management, "long before the muckraking publication by the blogger Navalny."

In February 2009, the Audit Chamber examined an audit of the spending of funds allocated to the ESPO project. It found that Transneft had concluded 83 no-bid contracts totaling $2.6 billion, and that contractors violated the terms of their contracts. The Audit Chamber forwarded the findings to Transneft.

Tokarev also told reporters that Russia is likely to resume oil deliveries to Belarus by Tuesday, but has alternate supply routes available in case the dispute over prices continues.

"I think that by the end of the week the talks will be completed, prices agreed, and by Monday or Tuesday oil shipments to Belarus will take place," he said.

Energy Minister Sergei Shmatko told reporters Thursday that Russia could resume oil supplies to its neighbor within a week. Russian oil flows to Belarussian refineries, which have a daily capacity of 360,000 barrels, have been halted since Jan. 1 while price talks continue with Russian oil companies. Oil flows to Europe remain unimpeded.

With both sides now in a customs union, together with Kazakhstan, as of Jan. 1 Belarus no longer has to pay Russia's oil export tariff. But traders say Russian companies have halted supplies in an attempt to get Belarus to pay higher oil prices.

About 40 million tons (about 800,000 barrels per day) of Russian oil is pumped to Europe annually via Belarus. Low gas and oil prices from Moscow are crucial for Belarussian President Alexander Lukashenko's efforts to keep the country’s ailing economy afloat.

Meanwhile, Rosneft and Transneft may swap infrastructure assets, RIA-Novosti said Thursday, citing Tokarev. Transneft may trade its rail terminal at the port of Kozmino in the Far East for Rosneft’s link from its Vankor field to the operator’s trunk pipeline in Purpe, the news service said.

(Interfax, Bloomberg)

Transneft head Nikolai Tokarev confirmed Thursday that former spy Natalya Pereverzeva is working as his assistant, Gazeta.ru reported. On Wednesday, a company spokesman denied that Transneft had an employee named Natalya Pereverzeva, which is the name she was known by after her “deep cover” identity as Patricia Mills was exposed in the United States. She is married to Mikhail Kutsik, who was exposed as a spy at the same time.

Russia presents new draft of Samsun-Ceyhan agreement to Turkey - Transnefthttp://en.rian.ru/business/20110113/162132390.html

Russia handed a new draft of the Samsun-Ceyhan pipeline agreement to the Turkish government in December, Russian oil pipeline monopoly Transneft's President Nikolai Tokarev said on Thursday.

"The Russian side presented our draft of the cooperation agreement when we were in Istanbul in late December, so we can see that cooperation on the project is tangible. The emphasis is on development of a normal economic model," Tokarev said.

Some difficulties remain, but the participants are working hard to overcome them, Tokarev said.

"The participants, as part of the working group, are meeting almost every month, attracting experts and consultants. This is already not just a conversation, as it was last year. Today we have already made all the calculations," Tokarev said.

The Turkish side has proposed another meeting again in Istanbul in late January, Tokarev said but declined to comment on likely topics for discussion.

In September, Tokarev complained that Turkey was offering Russia unfavorable terms for the project. Moscow then presented Turkey with a draft agreement offering oil supplies of 25 million tons per year, well below the initially agreed volume of 60-70 million tons.

Russian Deputy Prime Minister Igor Sechin said in December that Russia and Turkey hoped to agree on investment in the Samsun-Ceyhan oil pipeline project before the middle of March.

The Samsun-Ceyhan pipeline is designed to carry 60-70 million tons of oil per year from the Turkish port of Samsun on the Black Sea to a Mediterranean terminal in Ceyhan to ease tanker traffic burden in the Bosphorus and the Dardanelles straits.

MOSCOW, January 13 (RIA Novosti) 

Burgas-Alexandroupoli project still on – Transneft http://english.ruvr.ru/2011/01/13/39625461.html

Jan 13, 2011 17:54 Moscow Time

The trans-Balkan Burgas-Alexandroupoli oil pipeline project has not been not suspended, but no practical work on it is currently being done, the head of the Russian oil monopoly Transneft said on Thursday.

Nikolai Tokarev pointed the finger at Bulgaria, which he said is yet to repay its hefty debt on the project that is being carried out by Bulgaria, Russia and Greece.

The project aims to pump Russian oil from the Bulgarian Black Sea port of Burgas to the Greek port of Alexandroupoli.

TNK-BP May Halt Ukraine’s Linik Refinery, Zerkalo Nedeli Reports http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aTwSxI2mvSK4

By Daryna Krasnolutska

Jan. 13 (Bloomberg) -- TNK-BP may halt its Linik refinery in Ukraine if an economic union between Russia, Kazakhstan and Belarus starts, Executive Director Felix Lunev said in a column in weekly newspaper Zerkalo Nedeli.

Belarus wouldn’t have to pay duties on Russian crude for processing within the union, Lunev wrote in the article published today on the newspaper’s website. Refineries in Belarus would have a cost advantage of more than $130 a metric ton of oil-based products over their Ukrainian counterparts, Zerkalo reported, citing TNK-BP data.

The Linik refinery, which is further from Ukrainian capital Kiev than the OAO Mozyr Oil Refinery in Belarus, would be unable to compete and may halt as early as the first quarter of this year, Lunev said.

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net

Last Updated: January 13, 2011 13:04 EST

14.01.2011

Losses Could Suspend Operations at LINIK Refinery in Ukrainehttp://www.oilandgaseurasia.com/news/p/0/news/10309

TNK-BP could suspend operations at its LINIK refinery in Lysychansk, Ukraine, if it is unable to compete with cheaper fuel imported from Russia and Belarus, TNK-BP Ukraine Executive Director Feliks Lunev said in an interview published on Zerkalo Nedeli.

Luneva said that only imposing import unties would allow Ukrainian producers to compete as equals with fuel made in neighbouring countries which get Russian oil at far lower prices.

"I want to be as straightforward as possible: if the situation does not change, then losses will stop the LINIK refinery in the first quarter. Introducing duties is a matter of life or death to Ukrainian refiners", he said.

Copyright 2010, Oil and Gas Information Agency. All rights reserved.

Norway’s $186 Billion Gas Loss to Cement Russian Grip on Supply http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aSsEWp7Xmfdg

By Marianne Stigset and Ben Farey

Jan. 14 (Bloomberg) -- Europe may face a shortfall of Norwegian natural gas as soon as 2015 after the country slashed its estimate for undiscovered resources because of a dearth of discoveries from companies such as Royal Dutch Shell Plc.

Europe’s second-largest supplier yesterday cut its estimate for gas yet to be discovered by 31 percent, or 570 billion cubic meters. That’s equal to more than five years of production at current rates and would be valued at about $186 billion based on today’s prices at the U.K’s trading hub.

“This will rack up the pressure on the European Union to develop and secure access to reliable energy,” Thina Saltvedt, an analyst at Nordea Markets in Oslo, said by e-mail. “The EU will be forced to increase imports from the Middle East and Africa to compensate for and reduce Russia’s domination.”

Shell, Statoil ASA and other companies have been finding smaller and smaller amounts or striking out in drilling off Norway, casting in doubt Norway’s status as reliable supplier of the fuel and its goal of transforming itself into a gas nation as oil production

slumps. The troubles may help Russia, Europe’s biggest supplier, cement its grip on the market and provide an opening to exporters from the Middle East, where Qatar has become the largest producer of liquefied natural gas.

“It is the estimates for the gas resources in the North Sea and the Norwegian Sea that have been written down,” Bente Nyland, head of the Norwegian Petroleum Directorate, said yesterday in an interview in Stavanger, estimating a potential decline in gas production after 2015. “Our gas production will go down and other countries will pass us by.”

Undiscovered Gas

Norway’s undiscovered gas resources may total 1.26 trillion cubic meters, down from an estimated 1.82 trillion cubic meters last year. The country had total gas proven reserves of 2 trillion cubic meters in 2009.

As fields in the North Sea become depleted four decades after Norway first discovered oil, companies are moving north into the Norwegian Sea and the Arctic Barents Sea. Norway is counting on gas output to make up for declining oil production, which has dropped 50 percent in the past decade.

The “revised estimate of undiscovered reserves should be taken seriously, although it should also be remembered that it’s part of their job to be ultra-cautious in assessing the nation’s future hydrocarbons wealth,” said Patrick Heren, founder of European price-information service ICIS Heren. The implication may be that exporters in Central Asia or the Middle East will find it easier to sell their gas in Europe, he said.

Challenges

Statoil, Norway’s biggest oil and gas producer, has a goal of maintaining Norwegian production at current levels until 2020, which Chief Executive Officer Helge Lund on Nov. 3 called “ambitious.”

“Our goal hasn’t changed from what we’ve previously communicated,” Statoil spokesman Ola Anders Skauby said today. “The 2020 target is based in large part on discovered resources. The Norwegian shelf is definitely still interesting to Statoil.”

Shell drilled a dry well at the Dalsnuten prospect in the Norwegian Sea in November, a further blow to its nearby Gro discovery. An appraisal well at Gro had earlier indicated the find could be at the lower end of the 10 billion to 100 billion cubic meters estimate. Total SA also reduced the size of its Victoria field after more drilling in 2009.

Ormen Lange

“The fact that Gro didn’t deliver means that other surrounding prospects also decline and thereby the totality is gone,” said Nyland. “The question is whether Statoil will find profitability in the gas discoveries they’ve made.”

Shell last year had to cut the estimated reserves at its Ormen Lange field, Europe’s third largest, by 24 percent to about 302 billion cubic meters.

Norway may have to pin its hopes on the Barents Sea, where it’s preparing to map out an exploration area after reaching a maritime border agreement with Russia in September. Some seven to eight exploration wells are expected this year in the area, where there has been little exploration to date. So far this year, Eni SpA on Jan. 5 announced a dry well near its Goliat field in the Barents Sea, the directorate said on Jan. 5.

Norway estimates the Barents Sea holds 520 billion cubic meters and the Norwegian Sea 455 billion cubic meters in undiscovered gas resources.

“Most geologists are more optimistic than the Norwegian Petroleum Directorate about the prospects for large gas discoveries in the Arctic, where the Russians have already made a colossal find at Shtokman,” Heren said.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net

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

Last Updated: January 13, 2011 19:01 EST

Russia to draft program for Arctic shelf exploration by 2012http://en.rian.ru/russia/20110114/162137002.html

The Russian government will develop by 2012 a state program for prospecting and extracting mineral resources on Russia's Arctic shelf, Secretary of the Russian Security Council Nikolai Patrushev said.

"The Security Council discussed this issue during a recent meeting and instructed the government to finish drafting and adopt by the end of 2011 a long-term state program for prospecting and extracting mineral resources on Russia's Arctic shelf, Patrushev said in an interview with the Rossiiskaya Gazeta daily published on Friday.

Russia is first in the world in natural gas reserves (24 percent of the total) and 7th in oil reserves (6 percent), but these resources are not renewable.

According to Russia's Natural Resources Ministry, the country is already exploring 75 percent of its oil and gas deposits on the continent. Many of these deposits register 50-percent depletion and low extraction coefficient (30 percent).

"In these circumstances, Russia's continental sea shelf becomes a major source of energy supplies, and its exploration assumes an enormous strategic and economic significance," Patrushev said.

Russian experts estimate recoverable oil and gas resources on the continental shelf at 100 billion tons of reference fuel.

The new program will help focus the efforts of the state and the leading Russian energy companies on efficient exploration of deposits on the continental shelf, Patrushev said.

MOSCOW, January 14 (RIA Novosti)

PRESS-RELEASE 13.01.2011  LUKOIL BOARD OF DIRECTORS SUMMARIZES COMPANY’S PERFORMANCE IN 2010 AND SETS PRIORITIES FOR 2011   http://www.lukoil.com/press.asp?div_id=1&id=3381&year=2011

Today, the OAO LUKOIL Board of Directors held a meeting in Moscow to summarize the Company’s performance preliminary results in 2010 and set priority tasks for 2011. According to preliminary estimates, under the Russian classification, hydrocarbon reserves increment in 2010 reached 123 million tons of reference fuel. Six fields (in the Perm region, Uzbekistan, Egypt and Ghana) and 25 new oil deposits were discovered. All of the deposits are located at the fields of ООО LUKOIL-Western Siberia and within the Perm region. According to preliminary estimates, oil production by LUKOIL (including the share in affiliated companies’ production and overseas projects) came to 96 million tons. As compared with 2009, the oil production somewhat dropped, which was due to the depletion of the Western Siberian fields. Additional oil production achieved through the application of EOR (enhanced oil recovery) methods by LUKOIL Group came to 22 million tons or almost 23% of the total production volume in 2010. According to the preliminary estimates, gas production in 2010 by LUKOIL Group came to about 20 billion cubic meters, which exceeded 2009 level by more than 12%.   The oil stock refining volume at the Company’s refineries is expected to come to 66 million tons in 2010, including 45 million tons at the Russian refineries (including mini-refineries). The total refining volume rose by 5.7% compared with 2009. The production volume share of EURO-3 and EURO-4 compliant automobile gasoline by the Russian refineries of LUKOIL Group in the total production volume rose from 83.4% in 2009 to 91.6% in 2010.

 In 2010 the sales volume of LUKOIL brand EKTO gasolines and diesel fuel rose by 23%. About 2.7 million tons of LUKOIL brand fuel were sold in Russia, while the overseas sales volume is expected to come to 499,000 tons, which exceeds the rate of 2009 more than twofold. In October of 2010 LUKOIL launched a retail sales campaign of EKTO Diesel brand EURO-5 compliant diesel fuel in Russia. This type of fuel is manufactured by the Company’s plants in Nizhny Novgorod, Perm and Ukhta. According to the preliminary estimates, tax proceeds and customs duties transferred by LUKOIL Group to the Russian Federation Budget is expected to be approximately RUR 766 billion in 2010, which exceeds the 2009 level by RUR 256 billion. About RUR 21 billion was allocated towards the implementation of HSE (health, safety and environmental) programs.  The total amount of funds allocated for the implementation of the Annual Coordinating Research and Technology Program totaled RUR 4.2 billion in 2010 as compared with RUR 2.9 billion in 2009. The beginning of oil production at Yu. Korchagin field in the Caspian was one of the major events of 2010. Four wells were constructed at the field in 2010. Their daily production rate exceeds 600 tons of oil. Work at the West Qurna-2 field in Iraq and deep water exploration drilling in the Gulf of Guinea were last year’s major overseas projects implemented by the Company in the Exploration and Production business segment. LUKOIL’s Board of Directors defined the following primary objectives for 2011 and the near future:

·         provide 100% replenishment of production with incremental hydrocarbons reserves and maximum involvement of the reserves into the development process;

·         continue to develop the discovered fields in the Caspian Sea; ·         fulfill the contractual terms and obligations as to the development of the West

Qurna-2 field in Iraq and continue geologic exploration in the deep waters of Western Africa;

·         implement the Program for Utilization of Associated Petroleum Gas;·         continue upgrading the Company’s refineries to ensure compliance with the

technical regulations and production quality enhancement;·         enhance efficiency and improve the refineries’ competitive Solomon

Associates index; ·         strengthen the Company’s positions in top priority regions, and penetrate into

new petroleum product markets;·         develop and implement cutting-edge scientific innovations;·         ensure high level of health, safety and environmental protection.

Gazprom

Gazprom, Rosneft negotiate joint shelf projectshttp://en.rian.ru/business/20110113/162129794.html

MOSCOW, January 13 (RIA Novosti) - Russia's gas giant Gazprom and largest oil company Rosneft are negotiating joint development of shelf projects via their joint venture Rosshelf, Rosshelf Deputy General Director Igor Khvedchuk said on Thursday.

"Rosneft and Gazprom have already created working groups, which must set out goals and instruments of their partnership," Khvedchuk told Gazprom magazine.

Rosshelf, in which Gazprom and Rosneft hold 56.8% and 26.4% respectively, was set up in 1992 to develop the Russian maritime shelf.

In 2006, Gazprom and Rosneft signed a strategic partnership agreement which envisaged cooperation on the country's shelf. In particular, the companies were interested in  development of the Koryakia-1, Koryakia-2 and Magadan-1, Magadan-2 and Magadan-3 areas located on the shelf under the Sea of Okhotsk and the Bering Sea.

"Rosneft has by that time grown and raised the question of working on a parity basis," Khvedchuk said, referring to Rosneft's acquisition of the defunct YUKOS oil firm's assets six years ago. "The deal bogged down again."

After Eduard Khudainatov had replaced Sergei Bogdanchikov as Rosneft head last year, the situation improved, Khvedchuk said, adding he hoped that the companies would come to an agreement.

"Our priority is to get a license to develop Koryakia-1. Severo-Chukotsky and Longo-Chukotsky basins in the Chukchi sea are also very promising... I believe that Koryakia-1 is one of the most promising areas, where we can make important discoveries," Khvedchuk said.

He said that three or four estimates showed that oil and gas reserves of Koryakia-1, located on the north-eastern part of the Okhotsk sea, may amount to about 1.5-2 billion tons of oil equivalent.

"Other projects are a subject of negotiations between Gazprom and Rosneft, but they will concern the Chukhotka Sea for sure," he said.