FREE GEOPOLITICAL NEWSLETTER

russia  

For current reports go to EASY FINDER

RUSSIA


  
  

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 433,491 346,520 310,000 16
         
GNI per capita
 US $ 2,610 2,140 1,750 97
Ranking is given out of 208 nations - (data from the World Bank)

Books on Russia

REPUBLICAN REFERENCE

Area (sq.km)
17,075,400

Population
143,782,338

Principal 
ethnic groups 
Russians 82%
Tatars 3.3%
Ukrainians 2.7%

Principal towns 
Moscow (capital)
St Petersburg
Novosibirsk 
Nizhni Novgorod 
Yekaterinburg 
Samara 

Currency 
Rouble

President 
Vladimir Putin



Update No: 310  (26/10/06)

The death of a heroine
Anyone who respects free speech and a free press must be downcast at the latest event out of Russia, the assassination of a great investigative journalist and a great woman, Anna Politkovskaya. She was gunned down in the stairs of her apartment building on October 7th in what was clearly a contract killing, four bullets from a silenced Makarov pistol, one to the heart and three to the head. The pistol was left disdainfully on the floor to make the fact plain, with four empty cartridges. 
The threat is plain as day. Anybody attempting to introduce free speech and democracy into Russia can count themselves as corpses ahead of time.
She had a great heart; but even more damaging to the powers that be - she had a threefold great head. She knew too many of the evils of the current regime. She was the thirteenth Russian investigative journalist to die since 1991. Another great woman investigative journalist was Galina Starovoitova, a leading liberal deputy and human rights campaigner, shot dead by gunmen, again in the stairs of her apartment building in St Petersburg in November, 1998, for knowing too much.
One lesson of super-importance to learn for the promoters of liberal-democracy in Russia is not to live in apartment blocks. 
The Russian gangsters are the worst in the world. They do not abide by the seemingly forgotten elementary principle of chivalry, that one does not attack, yet alone, kill women. 
Gorbachev condemned the killing as a "blow to all democratic, independent press, a grave crime against the country and all of us." 
The former Soviet leader, who part-owns the biweekly Novaya Gazeta where Politkovskaya worked, said the newspaper would conduct its own investigation into the murder.
She had lived with death threats for seven years, but continued to dig deeper into the ongoing human rights abuses in Chechnya. She survived a poisoning attempt in 2004 when she was en route to investigate the Beslan tragedy. At the time of her death she was researching allegations of torture. She had refused invitations to leave Russia, saying: 'The main thing is to get on with my job, to describe the life I see, to receive visitors every day in our editorial office who have nowhere else to bring their troubles, because the Kremlin finds their stories off-message, so that the only place they can be aired is in our newspaper, Novaya Gazeta.'

                                           ******
She was not a political person, and refused invitations to stand for the Duma. Her own words in Another Sky provide the best insight into why she continued writing, her remarkable stamina and her extreme courage: 'I have merely reported what I have witnessed, no more than that. I have written and, less frequently, I have spoken. I am even reluctant to comment, because it reminds me too much of the imposed opinions of my Soviet childhood and youth. It seems to me our readers are capable of interpreting what they read for themselves.'

Putin about Politkovskaya: "Her influence on politics in Russia was minimal" 
The Kremlin at first said nothing. Then two days later Putin described her death as 'tragic,' hyperbolic hypocrisy from his point of view. 
"Whoever did it and for whatever reason, the crime should be punished," Vladimir Putin was quoted as saying on the murder of Politkovskaya at a news conference in Dresden on October 10th. Earlier, the Russian president had had a phone conversation with US President George Bush, who perhaps prodded him into a display of grief.
As the Russian president is quoted as saying, it was the murder of "a human, a woman, a mother and was directed against our country, against the current authorities and Russia in general, and the Chechen republic, by which the reporter was professionally pre-occupied." At the same time, Putin noted that "Politkovskaya's influence on politics in Russia was minimal," Ekho Moskvy reports. Indeed, alas. It does not seem to have occurred to him that this is an indictment of his regime.
The farewell ceremony was held on October 10th at Troekurovo Cemetery in Moscow. CNN (USA) was broadcasting the ceremony live; several thousand people participated in the ceremony. The subject of Politkovskaya's murder was the main subject of discussion on the Russian internet for the fifth day running. This indicates the possibility that even if her life's "influence on Russian politics was minimal," her death's influence may not be! 
Putin promised a full investigation. The problem is that everything to do with Chechnya is shrouded in mystery. It is pretty sure that nothing will come of it.

The heart of the matter
The very legitimacy of Putin's rule is tied up in the most intimate fashion with Chechnya. A series of bombings in August-September 1999 of apartment blocks, in which over 300 died, was imputed to the Chechen separatists and used to justify the launch of the second Chechen war in a decade in December. Putin, then premier, but with only a two per cent approval rating in the polls, was promptly catapulted to supreme power, which he still exercises, becoming president on Yeltsin's retirement in January 2000.
The attribution of the outrages to Chechen terrorists was always highly questionable. For a start they never claimed responsibility, despite not being bashful about having done even more gruesome things, such as a series of killings in the 1990s in Southern Russia and later the Moscow theatre attack and the Beslan affair. It would have been completely irrational for them to have perpetrated the atrocities in 1999 since that pre-empted a Chechen referendum on independence in 2001, which they would have clearly won. No evidence ever turned up that Chechens were the culprits.
It is still an article of faith that they were responsible. It has to be, given the claim that they propelled Putin to power. As Bush and Blair are discovering to their eternal discredit, it is unwise, as well as immoral, to base the case for war on a pack of lies. An enterprise badly begun, on wrong premises, can only too easily turn deeply awry.
In Putin's case the point is not coming home because, unlike the Anglo-Saxons, he does not face a free press by and large. He has seen to that over the last six years. Novaya Gazeta is now virtually a lone voice, perhaps protected by the full support given it by Mikhail Gorbachev, who increasingly looks like the only decent ruler Russia had for a long while. While derided by the populus, there is still a lingering respect for him in the Kremlin as the real architect of the new Russia, of which they are the great beneficiaries.

A booming economy
For of course the popularity of Putin, an undoubted fact, is based on a successful resurgence of the Russian economy in his time after the disasters under Gorbachev and Yeltsin. Putin has had that great boon for any politician - luck.
The six years of Putin's presidency have seen Russia's economy do very well. Russia is booming on the back of high global oil and gas prices, indeed high primary commodity prices. The Moscow bourse has risen 1,800% since 1999 and boasts a market worth US$950bn. 
Russia is now cushioned by a current account surplus of 10% of GDP and the world's third biggest reserves of $260bn, rising at $12bn per month. It is unrecognizable from the basket case of 1998, when the rouble crashed; it then had only $14bn of reserves and defaulted on US$40bn of bonds. But it is all premised on those oil prices etc. 

Coming trouble ahead in the economy?
There are signs, indeed sins, of overreach. Who in the US in the 1920s saw what was coming?
The real worry is that the US economy itself could suffer a major reversal, affecting the whole world, as in 1929. There are built-in checks to prevent a massive slump as in the early 1930s, with fateful consequences in Germany and so the whole world. 
But there are very disturbing indications that an upheaval of sorts is on the way. The Bush Administration is one of the most profligate in living memory. As Ambrose Evans-Pritchard of the Daily Telegraph, hardly an alarmist source, puts it: "The US needs nearly one trillion dollars of foreign money each year just to stand still (in financing its twin deficits in the federal budget and current account). The risk has moved from the outskirts to the aorta of the capitalist system."
From which it could then return to those very outskirts, including Russia! 
All that would be needed to trigger off a calamity is for one of the booming Asian giants to go bust. China is growing at 10% and India at 8%. But the former has huge social and environmental problems, while the latter has a horrendous fiscal deficit of 9.3%. 
Japan has not emerged from the fiscal woods yet and would be immediately vulnerable to a downturn on the mainland, as would Taiwan and South Korea. It is their surpluses, along with those of the oil producers, including Russia, that are feeding the US's hunger for credit. Any disruption of the process could see a crash of the dollar, a stiff rise of interest-rates and a world financial and commercial crash. Can the merry-go-round of credit really go on forever?
The future may come to curse the Bush Administration here. But the process began earlier, although it has certainly been exacerbated by its upsurge in spending, notably on its wars, and its fiscal laxity generally. If this analysis is sound, the repercussions will come to be felt world-wide, and especially in the virtual mono-commodity economy of Russia, so overwhelmingly dependent on exports of energy.

The death of a banking supervisor and supervisionary
Russia is producing the best and the worst at the moment - great reformers and visionaries and yet great scoundrels who try their best to kill them.
There was another assassination in Russia, a month before in September, every bit as revealing as that of Politkovskaya. That was of Andrei Kozlov, the first deputy chairman of the Central Bank, one of the architects of the country's banking system. He had supervised the banks, revoked licenses, enforced the money-laundering law, and was very uncompromising and tough in dealing with bankers. 
Andrei Kozlov was not well liked in the banking community, although his high level of professionalism was generally acknowledged. One Central Bank colleague of his recalled that during the summer crisis of 2004, when several banks had their licenses withdrawn, a caged goat was driven in an open Gazel van before the windows of the Moscow City branch of the Central Bank (not even where Kozlov's office was situated) - giving a clear hint [Kozlov's name calls to mind a goat in Russian] to the functionary who spoiled the lives of many an unscrupulous banker. But deep down everybody understood: the Central Bank, through Andrei Kozlov, was only laying down the ground rules. Perhaps they were rough-edged, but Russia's banking system needed to be civilized, purged of crime, and made stable and transparent. In effect everything was being done for the good of the ordinary client and customer. 
Specialists say that nearly half the requests for opening criminal cases against money laundering came from the Bank of Russia, with the rest furnished by the Federal Financial Monitoring Service. And someone got his revenge. And revenge, as a Mario Puzo character said, is a dish best served cold, although the killing may have been an "emotional" backlash following a conversation or an event involving Kozlov. 
Throughout Russian history very few attempts have been made on the lives of top-ranking financial executives. In the late 1990s Deputy Finance Minister Andrei Vavilov's car was blasted, and shots were fired into a window of the apartment of the then Central Bank chairman Sergei Dubinin. But that was a different era with different motives, and the memory of those incidents has faded. Not because such practices have gone out of use, but simply because offenders have not taken issue with state representatives and regulators. Here we have a cold-blooded, blunt and well-calculated shooting of one of the main civil servants in the Russian banking and financial field. 
The system is cleaning up its act, becoming civilized and turning its face to the clients. It has ceased to be exclusively for money-laundering and has gotten more competitive. It is now a place for rank-and-filers who solve their daily problems by means of banking tools. The Russian banking system is also becoming more transparent for both the domestic and foreign users of its services: in recent years Russian banks have started introducing International Accounting Standards (IAS). These indicators help to regulate bank activity more competently, and enable market players to better see their headaches and ways of dealing with them. 
There is, of course, a certain amount of resistance. That is inevitable. No one, however, could forecast that the resistance would toughen: a reply to the rehabilitation of the system was a pistol shot ... But this will change nothing about the banking system. The only pity is that such a dear price - a human life - has to be paid for progress.

                                        ******
It is the fiftieth anniversary of one of the great events of the twentieth century, Nikita Khrushchev's secret speech to the 20th Congress of the Soviet Communist Party. It was not to remain secret for long. Here are two recollections of the speech, one by Gorbachev, Khrushchev's spiritual heir, and the other by Sergei Khrushchev, his son:- 
Below, RFE/RL presents recollections of Nikita Khrushchev's 1956 speech to the 20th congress of the Communist Party of the Soviet Union by former Soviet President Mikhail Gorbachev and Sergei Khrushchev, Nikita Khrushchev's son. "A POWERFUL TEXT": Former Soviet President Mikhail Gorbachev, speaking about the secret speech in 1994, on the occasion of the 100th anniversary of the birth of Nikita Khrushchev:
"I was among those who were acquainted -- after all, not everyone was -- with the speech. At the time, I was the deputy chief of the agitation and propaganda department of our region's Komsomol. I had the opportunity to be invited to the party's district committee, where I became acquainted with this text. 
This acquaintance took place in a closed environment, and the speech was taken away five days later. This is why, after I read it, I never saw it again until perestroika. Later, many found out about the text, but slowly. In the West, on the other hand, it was published and became popular. 
It was a powerful text. It isn't marked by strong analysis, or a deep approach to the roots of all these phenomena, like why the personality cult became possible -- you won't find these things there. But there is something there that moves and touches the soul. It talks about what was happening to us, what was happening to people, to outstanding people -- how they left and were turned to sand and everything vanished...and people's fates.... 
This is simple and terrifying. In that sense, the speech creates a strong impression. 
I remember how my grandfather was arrested. When the revolution happened, his family got land, and it was apparent to them that it was theirs to manage. So he became a communist. He created kolkhozes [collective farms]; he was the chairman of a kolkhoz for many years. Then, suddenly, in 1938, he is an enemy of the people! This is why, in this sense, I was prepared for the speech and interpreted it differently than others. But even I was haunted by the question: Was it really like that? Can it be?
My grandfather, who survived torture, returned to the village alive. The grandfather Raisa Maksimovna [Gorbachev's wife.] was also a peasant and was shot as a Trotskyite. It was a shame, because he did not know what a Trotskyite was. This was in the Altai region. 
I interpreted it to some extent as -- yes, this is what happened, this is what happened in my family, and this is what happened in the entire country. It was a tragedy, many people died, a nation was drained of blood and, to a certain extent, decapitated. The intellectual part of the army, and of the politicians, and the administrators was annihilated, decimated -- and the artistic intelligentsia.... 
But around the world, I noticed a shocking confusion. It was hard not to believe, but some still didn't. Can it really be that it happened this way? But the most important question that arose was: Why did all this collapse and why in this way? 
I think this is exactly what Khrushchev must be credited with. They say he trembled while he read the speech, but he read it nonetheless. I think this is where we begin our difficult, dramatic separation from Stalinism and everything it bore. 

"TO TELL THE TRUTH": In February 1996, RFE/RL correspondent Vladimir Tolz spoke with Sergei Khrushchev, Nikita Khrushchev's son, about his recollections of the 1956 secret speech. 
Sergei Khrushchev: I found out about the speech not from my father, but later, when people came and said, "You know, there was this report...." Then I rushed to him with questions.

RFE/RL: And what did he tell you?
Khrushchev: He actually didn't tell me anything. He said, "Well, you know, we decided that we had to..." -- I forget his exact words now -- "tell the truth." He probably said it a bit differently, but in any case he gave me the text and said, "Here, read it. I'm tired of talking...."

RFE/RL: Do you remember your impression? Was it somehow discussed in your family?
Khrushchev: It wasn't even discussed in our family. We all kept to ourselves because we all had -- I assume -- thoughts of our own about the matter. For me, it was the end of the world. Later, when I asked my father about this and he told me about his friends who died, I became an anti-Stalinist, and it seemed to me at that moment that it would be impossible to resurrect the name of Stalin and speak of it positively. But as you see, we were all wrong about that.

« Top

CREDIT RATINGS

S&P upgrades Tomsk region to ruA+

Standard & Poor's Ratings Services has raised its Russia national scale rating on the Tomsk Region, in western Siberia, to ruA+ from ruA, the ratings agency said in a press release, New Europe reported.
"The upgrade reflects the region's growing revenues, debt structure improvements and commitment to maintain low debt and sound financial performance," said Standard & Poor's credit analyst Boris Kopeykin. The rating on Tomsk, one of the most developed industrial regions in the Russian Federation (foreign currency BBB+/Stable/A-2; local currency A-/Stable/A-2; Russia national scale rating ruAAA/-/-), remains constrained by the region's strong exposure to a single taxpayer, oil company Tomskneft - a subsidiary of OAO NK YUKOS (D/-/-); dependence on federal-government decisions; and low investment.
Tomskneft provides about 25 per cent of Tomsk's revenues, which highly exposes the region to oil price swings and developments in the YUKOS case. The company cut capital expenditures in 2004-2005, which contributed to the low 0.1 per cent growth in the region's gross regional product (GRP) in 2005.

« Top

ENERGY

Gazprom to explore Stockmann field alone 

Russia will exclude foreign companies in the development of the giant Stockmann gas field in the Barents Sea as a future energy source for Europe, the head of the semi-state gas company Gazprom, Alexei Miller, said in Moscow on October 9th, New Europe reported. 
Potential overseas partners had failed to offer a sufficient share of their assets in exchange for a stake in the project to tap the natural gas deposits off north-west Russia, Miller told the Russia Today television channel. 
Foreign companies would only be allowed to take part in tenders for construction of related infrastructure, he said. 
The five companies that vied for a stake in Stockmann in recent years were Norway's Hydro and Statoil, ConocoPhillips and Chevron of the United States, and France's Total. 
It was initially planned to liquefy the gas and ship it to the lucrative US market. But at talks with the leaders of Germany and France in September, Russian President Vladimir Putin unexpectedly announced that the gas would be exported to Europe via the North European Gas Pipeline that is now under construction. 
Observers linked the decision to growing political tensions between Moscow and Washington. 
Laying beyond the Arctic Circle, the Stockmann field holds an estimated 3.7 billion cubic metres of natural gas. Combined with exports from other Russian gas fields, the deposits would cover Europe's gas needs for the next 50 to 70 years, according to the Russian leader.

Gazprom signs memorandum on cooperation with Repsol 

Gazprom CEO, Alexei Miller, and Repsol President, Antonio Brafau, have signed a memorandum on mutual cooperation in oil and gas projects, Gazprom's press service said, New Europe reported.
The memorandum stipulates that the two companies will study the possibility of joint cooperation in Europe, Latin America and Africa in addition to liquefied natural gas (LNG) projects with the use of Russia's resource base, including the Baltic LNG project. "The sides will set up a coordinating council for the successful realisation of the memorandum," the press service said.

Gazprom to discuss 2007 gas supplies with Georgia 

Georgia and Russia's Gazprom will discuss gas supplies to Georgia for 2007 in December - before contracts for the current year expire, Georgian International Gas Corporation (GIGC) said recently, Interfax News Agency reported.
The corporation said the volumes and prices of the supplies would be discussed. Georgia is due to receive around two billion cubic metres of Russian gas at US$110 per 1,000 cubic metres in 2006.

Gazprom approach puts pressure on TNK-BP

Gazprom, Russia's gas monopoly, recently confirmed its interest in buying a stake in TNK-BP in an apparent bear hug on the private Russian shareholders in the 50:50 Anglo-Russian oil joint venture. The move would mark further consolidation of oil assets in state hands ahead of the 2008 presidential elections, the Financial Times reported on Sept 29th.
The move comes amid mounting pressure on BP's Russian venture over its licence to develop the giant Kovykta gas field in Eastern Siberia. Alexander Ryazanov, the chief executive of Gazprom Neft, the oil arm of Gazprom said: "If the shareholders think about this, we would be the first to be interested."
TNK-BP has a market capitalisation of US$40bn, but Mr Ryazanov said finding the money would not be a problem for Gazprom given its cash flow and borrowing power. Gazprom already owns the Sibneft oil company, which it bought from Roman Abramovich for US$13bn last year.
However, Gazprom could face a challenge from Rosneft, the state oil company, which is also believed to be eyeing TNK-BP.
A person close to BP said it was clear to the company that within two years it would have a new state partner - the only question being whether it would be Gazprom or Rosneft.
The Russian shareholders are Mikhail Fridman's Alfa Group and Access-Renova, a partnership between Viktor Vekselberg and Len Blavatnik. The Russian tycoons and BP have an agreement that the venture's shape cannot be changed before 2007.
TNK-BP has come under pressure from the Russian authorities over the past few weeks in what appears to be an attempt by the Kremlin-backed companies to persuade BP to change this agreement. Russian prosecutors and the country's minister for natural resources have threatened to withdraw TNK-BP's licences to develop a giant Kovykta gas field in Eastern Siberia, one of the company's most prized assets.
They cite TNK-BP's alleged failure to fulfil the terms of the licence, under which Kovkykta is supposed to produce some 9bn cubic metres of gas for the needs of Ikrutsk region this year. However, TNK-BP estimates the demand for gas in the region could reach 2.5bn cubic metres of gas by 2008-2009.

Russian gas subsidy move boosts JKX

JKX Oil & Gas almost tripled its underlying profit as it benefited from the recent move by Russia to end gas subsidies to its former Soviet satellite and increased production, New Europe reported.
But the company, which has all its reserves in Ukraine, warned it was struggling to expand its licence portfolio in the former Soviet republic because the state was reluctant to relinquish control over further strategic assets.
The company managed to secure one exploration licence in January - the first in 12 months - in a country that has been dominated by Russian and Ukrainian producers and where rival Regal has suffered a challenge to the ownership of its assets.
His comments came as JKX reported a jump in pre-tax profit from US$14.5m to US$56.4m (£29.6m) in the six months to June 30th. The numbers were skewed by the writing back of a US$15.2m impairment charge in the period, leaving underlying profit almost trebled.
Revenues jumped to US$60.6m (US$23.8m) as production rose to 10,664 (7,521) barrels of oil equivalent per day. Three wells were brought on stream in the first half, while a further two started producing since the half-year end, lifting current production to 12,000 boepd against 11,067 at the end of December.
The move by Russia at the end of last year to scrap cheap gas to the Ukraine meant JKX could sell its gas at higher prices, with the average price up 54 per cent to US$2.69 per thousand cubic feet.
JKX was also helped by an increased oil to gas mix (45:55 against 27:73), which allowed it to tap into the strong oil price. The average realised oil price rose 24 per cent to US$52.05 per barrel.

Timetable for Bushehr reactor launch agreed with Iran 

Russia and Iran signed an agreement cementing the timeframe for the overdue launch of the Bushehr nuclear power plant next year and paving the way for further joint nuclear projects, government officials were cited by press reports as saying in Moscow on September 26th. The document "envisions the supply of fuel in March, the physical launch in September 2007, and the energy launch in November 2007," the Itar-Tass news agency reported, citing consultations between heads of the respective nuclear authorities.
At talks in the Kremlin, the Security Council Secretary, Igor Ivanov, said Russia would make good on its promises about the completion of Iran's first 1,000-megawatt reactor, which has been hampered by repeated delays on the Russian side. "A concrete plan for the construction of the nuclear reactor in Bushehr has been laid out and we will strictly abide by our agreements," Ivanov told Gholam-Reza Aqazadeh, Iran's vice-president and head of its Atomic Energy Organisation. Moscow was satisfied with the development of ties with Tehran and was interested in furthering the "spirit of friendship," Ivanov told Aqazadeh. Frustrated at the hold-ups, Iran has recently stepped up pressure on Russia to provide exact dates for the start of the power plant in southern Gulf port. 
Initially, Russia pledged to begin the first phase of the project in early 2000, but delayed the launch several times. The United States opposes Russia's close nuclear cooperation with Iran and accuses Tehran of using the technology to develop weapons of mass destruction. Meanwhile, the deputy head of the Iranian Atomic Energy Organisation spoke of expanding joint work in the field. "With the finalisation of the timetable for starting the Bushehr power plant reactor, we want Russia to cooperate with Iran in further nuclear projects in the future," Mohammad Saeidi told state-television from Moscow. "The Russian government itself is committed to implementing the (Bushehr) agreement and the Russian decision to continue nuclear cooperation with Iran is serious," Saeidi said. Russia has previously offered to build several more reactors for civilian power generation in Iran. Under the plans for Bushehr, Russia will supply the fuel rods on the condition that the spent rods are later returned for disposal. Sergei Kiriyenko, head of Russia's nuclear power agency Rosatom, has repeatedly stressed that delivery of the fuel would not take place earlier than six months before the unit is powered up. 

Russia has long-term plans to privatise Rosneft fully 

Russia has long-term plans to privatise oil company Rosneft, an advisor to President Vladimir Putin said on September 17th in the Black Sea resort of Sochi. "In three to 10 years, (Rosneft) will be completely private," Igor Shuvalov said. Following the successful initial public offering of 14.8 per cent of Rosneft's shares which generated US$10.6 billion in income, more of the company was expected to be sold off on the stock exchange. No one shareholder is allowed to possess more than 10 per cent of the company's shares, New Europe reported.

Russia, Hungary considering expansion of gas pipelines 

Russia and Hungary are discussing the expansion of gas pipelines and storage facilities in Hungary, Russian President, Vladimir Putin, said after talks with Hungarian prime minister, Ferenc Gyurcscany, in Sochi on September 18th, Interfax News Agency reported.
Putin said the fuel and energy sector is a priority for Russian Hungarian relations. He also said that Russia and Hungary are discussing projects in electricity. "We have noted the growing activity by Hungary's MOL in the Russian energy sector," Putin said. Moscow and Budapest "are also talking about mutual interest in developing transport infrastructures" in Hungary, he said. "This could include large logistic centres with the participation of other countries such as Ukraine and the European Union," Putin said. Russian-Hungarian trade reached a record six billion Euro last year and Hungarian exports to Russia have grown 74 per cent since the beginning of the year, he said. "This shows the openness of the Russian market for Hungarian goods," Putin said. We are far from being satisfied with this level, he said. "Therefore, our discussions centred on large joint cooperation projects that will significantly increase the base of economic mutual action once they are implemented and will help our trade turnover," he said. Putin pointed out that Hungary was interested in priority national projects being implemented in Russia. Hungary has also expressed a desire to join in on implementing national projects concerning agriculture and new housing, Putin said. 

Gazprom to establish relations with Petronas 

Russian gas giant Gazprom plans to develop cooperation with Malaysian state oil company Petroliam Nasional Berhad (Petronas), the Gazprom press service said after a meeting between Gazprom Deputy CEO, Alexander Medvedev, and Petronas Vice President for Gas Business, Wan Zulkiflee Wan Ariffin. To begin with the sides are discussing the possibility of signing a memorandum of understanding, with the subsequent setting up of working groups for various areas of cooperation. It is planned to develop multilateral cooperation in the oil and gas sector based on the joint implementation of projects in Russia, Malaysia and in other countries, New Europe reported.
The participants in the meeting also discussed cooperation in the exploration and development of oil and gas fields in Central Asia, potential for partnership in the production and supply of liquefied natural gas; and cooperation in projects to build underground gas storage facilities, Gazprom said.
At the moment the only example of cooperation between Gazprom and Petronas is participation in a consortium for the development of the second and third phases of the South Pars field in Iran. Petronas is taking part in oil and gas projects in Uzbekistan and Turkmenistan. A year ago Petronas bought four per cent of British gas and electricity supplier Centrica - a company that the market has for a long time considered to be of interest to Gazprom.

Gazprom board approves oil strategy

The board of directors of Russian gas giant Gazprom approved the company's oil business strategy at a meeting on September 27th. This strategy involves reaching annual production of 80 million tonnes of oil by 2020, with annual growth in production of four per cent, Gazprom said recently, New Europe reported.
Gazprom owns over 75 per cent of shares in Gazprom Neft, formerly Sibneft. The plan to reach annual production of 80 million tonnes of oil in 2020 involves the gradual launch of production at all Gazprom Neft's explored fields (including 50 per cent stake in Slavneft), the development of Gazprom reserves and the expansion of the resource base.
"In the area of oil refining and sales, Gazprom Neft activity will be aimed at expanding oil refining capacity, exporting part of the oil produced, achieving synergy with Gazprom's refining assets, and developing its retail network," the press service said. The Gazprom Neft investment program will be totally financed from the cash flow generated by its own activity, without using Gazprom funds.

First Sakhalin-1 oil to be sent to Japan

The first consignment of export oil from the Sakhalin-1 project will be sent to a refinery in Japan, Exon Neftegas President, Steven Terni, said on September 27th, New Europe reported.
Oil is currently being loaded onto the first tanker at De Kastri. A special fleet of Afremax-type double-hulled tankers with a capacity of 100,000 tonnes each will transport oil from De Kastri year-round. Planned daily exports of Sokol blend oil amount to up to 250,000 barrels. "This means that on average one full tanker will leave the terminal every three-four days," Terni said. He said the light Sokol low-sulphur oil would be an easily refined crude for oil refineries in the North Asia region. Production at the Sakhalin-1 project is expected to increase to 30,000 tonnes of oil per day by the end of 2006, all of which will be exported. Sakhalin-1 participants include Exxon Neftegaz Limited (30 per cent), India's ONGC (20 per cent), Rosneft (20 per cent), and Japan's SODECO (30 per cent).

Russia to export 54.21m tonnes of oil outside CIS

Russia plans to export 54.205m tonnes of oil outside the CIS in the fourth quarter this year, compared with 55.9m tonnes in the third quarter, with exports to the CIS of 9.9m tonnes, a source in the Russian Industry and Energy Ministry said, Interfax News Agency reported.
According to the export schedule, supplies through Novorossiisk will amount to 11.4m tonnes, Tuapse - 1.23m tonnes, Germany - 5.976m tonnes, Poland - 4.935m tonnes, Gdansk - 1.864m tonnes, the Czech Republic - 1.35m tonnes, Slovakia - 3.7m tonnes and Primorsk - 17m tonnes. No supplies are planned via Butinge in Lithuania. Oil supplies on this route were halted by an accident on the Druzhba pipeline in July. Supplies to Belarus in the fourth quarter are planned at four million tonnes.

Tekhsnabexport to export spent nuclear fuel

Russia's OAO Tekhsnabexport has signed a contract on exporting 2.3 tonnes of spent nuclear fuel from a research reactor in Serbia, the company said, Interfax News Agency reported.
Tekhsnabexport won a tender announced by Serbia and has signed a contract for the first preparatory stage. The first stage is expected to last about 18 months, Tekhsnabexport said. Within this period the spent fuel will be audited and prepared for delivery to the Mayak Production Association. The current project is a part of a Russian-US programme on the return of spent nuclear from research reactors to Russia. About a quarter of the total costs will be covered by the United States, the company said.

« Top

FOREIGN TRADE

Zimbabwe, Moscow sign deals worth US$300 million 

Zimbabwe and Russia have signed agreements to encourage investment worth US$300 million in tourism, aviation and power generation, it was reported on October 10th. The agreements came at the end of a week-long visit by a 48-member Russian business delegation comprising both business representatives and journalists who were in Zimbabwe to explore areas of possible Russian investment, New Europe reported. 
The state-run companies that signed agreements with Russian investment company Rusavia Trade included the Zimbabwe Power Company, Hwange Colliery Company, the Zimbabwe Tourism Authority and the Civil Aviation Authority of Zimbabwe, the report said. 
Rusavia Trade specialises in construction and air transport but will subcontract some of its work to other Russian companies, the report said. 
An official from Rusavia Trade was quoted as saying his company already had experts working on plans to expand an airport in southern Zimbabwe to international standards. 
Similar expansion is planned for the airport in the key resort of Victoria Falls in northwestern Zimbabwe, said the official, Yury Panchenko. 
"We are going to subcontract some of the business deals that we would have clinched here to the specialised companies in Russia," he added. 
The Russian business delegation has also pledged to construct a railway line linking Harare to Chitungwiza a sprawling working class dormitory town south of the capital. The delegates also showed a keen interest in investing in power generation, tourism, coal mining and banking, the report said. 
Russia has been a long-time ally of Zimbabwe. It supported the country's war of independence from white minority rule, and provided education to many ruling party cadres in the post-independence era. 
President Robert Mugabe, whose government has been condemned by Western nations over its human rights record, has called on Zimbabweans to look elsewhere, including Asia for new business partnerships and potential investors.

Trade turnover with China to reach US$60bn soon

The target of increasing annual trade turnover between Russia and China to US$60bn will be achieved in the near future, Russian Presidential Chief of Staff, Sergei Sobyanin, said at a meeting with Chinese State Council Secretary General, Hua Jianmin, in Beijing on September 26th, according to the Vesti-24 TV channel.
Bilateral relations between Russia and China will be developing in all sectors, Sobyanin said. The two countries will increase cooperation in the energy sector, nuclear power engineering, space exploration, aviation and other high technology areas, he said. Relations between Russia and China are strong thanks to successful contacts at the top level and the appropriate implementation of documents signed by the two countries, he said.

« Top

MINERALS & METALS

Polymetal, Anglogold form JV

Polymetal and Anglogold Ashanti will invest US$15 million in a joint venture in Russia in 2007, Vitaly Nesis, Polymetal's CEO, said. The resources will be used for geological exploration, he said, Interfax News Agency reported.
"We will look at sites that will be put up for auction next year, but we don't have any concrete plans yet," he said. The joint venture is not planning to work outside of Russia yet, he said.
Polymetal, Russia's biggest silver and second biggest gold producer, is forming a joint venture with AngloGold Ashanti, the world's third biggest gold producer, for operations in Russia and is transferring a number of Russia-based assets to the joint venture, the companies said in statements. The companies have launched a 50/50 Strategic Alliance with AngloGold Ashanti to cooperate in exploration, acquisition and development of gold mining assets within the Russian Federation, Polymetal said in a news release.
On September 21st 2006, the companies' CEOs signed an agreement establishing the formal terms governing their cooperation in the Strategic Alliance, the release said. Polymetal and AngloGold Ashanti will participate in the Strategic Alliance though a Joint Venture company (JV), each party will hold 50 per cent in the JV, the release said. The agreement provides for joint identification, acquisition and development of attractive gold mining projects in Russia, the release said.
In terms of the Strategic Alliance, it has been agreed that the JV's interests in Russia will be divided into three broad regions, the release said. Polymetal and Anglo Gold Ashanti agree that the companies will jointly pursue the prospective exploration and development of gold opportunities in the Russian Federation within the entire Siberia Gederal District and the Far East Federal District of Russia and including, the regions of Yamal Nenets, Khanty Mansi, Tyumen and Kurgan but excluding, certain areas (Magadan, Sverdlovsk, Kamchatka, Irkutsk Regions, Khabarovsk, Chukotka and Koryakiya Territories), as Exclusive Areas where the companies will only pursue gold mining opportunities through the Strategic Alliance, the release said.
In other areas either AngloGold Ashanti or Polymetal may pursue a gold mining opportunity solely and independently, but not together with a third party as part of a consortium, unless the Strategic Alliance elects not to pursue such opportunity, the release said. It is proposed that the Strategic Alliance will be equally held by AngloGold Ashanti and Polymetal and will initially hold two assets to be provided by AngloGold Ashanti and two Greenfield exploration projects to be provided by Polymetal, the release said.

RusAl boosts 2004-2013 investment up to US$16bn

RusAl, one of the world's top three aluminium producers, has increased its investment programme for the period 2004-2013 to in excess of US$16bn. RusAl originally anticipated that the programme would cost US$8-10bn, Pavel Ulyanov, the company's deputy director general for corporate development strategy, said, New Europe reported.
The programme calls for investing US$4.6bn in bauxite and alumina assets, US$6.2bn in smelting, US$5.2bn in energy and more than US$500m in the environment, Ulyanov said. This will be financed "by various means, including re-investment profit and a possible Euroband issue," Ulyanov said.
Ulyanov did not say when the possible Eurobond issue might be placed. He did say that the company would contemplate an IPO if bonds could not generate the desired level of investment. The investment programme targets alumina production to rise to eight million tonnes and aluminium production to grow to five million tonnes.

« Top

« Back

 


 
Published by 
Newnations (a not-for-profit company)
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com