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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)

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Update No: 315  (29/03/07)

The situation in Russia is volatile. Putin, the central player, is wary of all dangers. He trusts nobody, even, as Stalin said, himself.

He must stand down next year according to the constitution. But he is assuredly aware that it only forbids more than two consecutive terms. He could stand again in 2012 or 2016, when he would be only 61, only one year older than when Yeltsin came to supreme power and seven years younger than when De Gaulle, one of his heroes, returned from Colombey-les Deux Eglises to lead France once again.

Tale of three oligarchs
Putin is the creation of the oligarchs, who dominated power in the 1990s, notably Berezovsky and Khodorkovsky. The first he has exiled; the second he has imprisoned.

The oligarchs have got the message: 'Don't mess with the Kremlin.' They are under Putin's thumb, Ambramovich meekly accepting his re-appointment to the governorship of one of the most benighted places on Earth, Chukotka, in the Far East. But then his deputy does the donkey work, while he relaxes on his yacht or whatever, in warmer climes.

Tale of three nations
In the bad old Tsarist days there were two nations, the lords and the serfs, although a very subordinate third stratum appeared in the nineteenth century, the bourgeoisie. Now the latter has taken over, the lords having departed after 1917 having already lost their serfs in 1861 with Alexander 11's emancipation of the same. 

Instead of Russia merely dividing between haves and have nots, it now has another third stratum, the have-yachts. There are some very wealthy people in Russia, such as Ambramovich, who tend to live much of their time abroad; many more now frequenting the more expensive world resorts who are at least cash-rich, more often than not through dubious means; there are professional people and small-to-medium businesspeople (often women) and then the rest, the masses, the have-nots. Actually, they have at least one thing that they did not have before - the vote.

This has changed things dramatically. The powers-that-be court them in pre-election times, such as now (elections to the Duma loom in December and to the presidency in March next year). The oil boom Russia has enjoyed since 2,000, when Putin came to power, has brought an average 6.7% growth in GDP with it. It came, moreover, after the collapse of the rouble in 1998, which saw it fall by a vast 400%. Russia has so far avoided the usual route to 'the oil curse,' an overvalued currency, which hollows out the economy and society. But the advantages of an undervalued currency, which the Chinese are ruthlessly exploiting right now, are exhausted. The rouble is now reflecting the fundamentals more or less. 

The Putin Kremlin is aware of their luck and now of the need to avoid the oil curse. They have established a Stabilisation Fund for the rouble, now worth over US$80bn. It is modelled on that of Norway, worth over US$150bn and destined to grow, serving two key ends, keeping the currency down by buying foreign assets and building up a vast nest egg for when (if), the oil runs out. The other 'beneficiary' of the North Sea oil boom, the UK, spurned such a state approach as 'socialistic' under Thatcher and Major and preferred to expend the tax proceeds of its oil wealth on destroying British export industries by a ruinously high pound and creating a new underclass of three to five million dependent on the dole. Actually, the Norwegian Stabilisation Fund was from the start privatised, being outsourced to seven or more portfolios run by the world's leading investment banks, Lehman Brothers and the like, to see which was the more successful. 

Putin has used tax proceeds rather to double wages and pensions, indeed to triple the desperately low soviet-level salaries of doctors in the state health system. With a new sense of security and new income, it is not surprising at all that his popularity is sky-high, over 70% in polls quite consistently. He is probably the most popular Russian ruler ever since Peter the Great, his hero, the founder of his home city, St Petersburg. 

The people now in charge of Russia are the siloviki, the old-time KGB loyalists, such as Putin himself, mostly indeed from the former capital. If you defect from their number and go and work 'for the enemy', as did Litvinenko for Berezovsky, you do so at your peril. Litvinenko who knew the risks, discovered that certainty before he died in November last year in London.

Whither next?
It is what you do with your power that matters. Putin has the idea that he got it wrong initially. He wanted to cosy up to the US after 9:11 and ceded it rights all over the place, such as withdrawing his military base from Cuba.

The US has relentlessly pressed its advantage of sheer might. It is encroaching again on Russia, like it did on the USSR. His speech in Munich was explicitly directed against the US, in which he said that he was going to be candidly discourteous. He unmasked the US government of George.W Bush as the major public enemy of the world, which it is. Who else starts wars all over the place, which they do not even win?

He is now convinced that Europe is a more worthwhile interlocutor.

Putin's aide calls for intensified Russia-EU dialogue 
Russia and the European Union should start a more active dialogue on contentious issues to avoid creating a dividing line on the continent, a Russian presidential aide said on March 23rd. 

"We have been conducting an insufficiently intensive dialogue on security issues in Europe on the whole, and on U.S. plans to deploy its missile defence system in Poland and the Czech Republic in particular," Vladimir Putin's special envoy on relations with the EU, Sergei Yastrzhembsky, said at a French university. 

The United States said in January it would place elements of its missile defence system in the Czech Republic and Poland to counter possible attacks from Iran or North Korea. Moscow has strongly criticized the move, saying it threatened Russia's security, and warned it could revise its military doctrine accordingly. 

"This problem concerns not only these two countries, the U.S. and Russia, but also NATO, as well as all of Europe," Yastrzhembsky said. He said there are arguable issues in the Russia-EU dialogue, and suggested discussing them. 

Thierry de Montbrial, director of the French Institute of International Relations, said many differences in Russia-West relations are ideological. 

He said a strong power established itself in Russia in 2000, which reminded Western analysts of the Cold War era, and "spoiled the tone of relations." 

Yastrzhembsky said he wishes the EU would play a more significant role on the international scene. 

Russia's foreign minister said earlier Friday that U.S. plans to deploy air defence missiles in Europe could negatively affect Russia's relations with NATO if implemented unilaterally without Russia's involvement or any consideration of collective interests. 

"We are against 'strategic games' in Europe, which could all but create a potential for confrontations and align European policies in accordance with the friend-or-foe principle," Sergei Lavrov said in a newspaper article. 

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ENERGY

Evraz Group wins Kuzbass power plant auction

A company reportedly acting on behalf of number one Russian steel producer Evraz Group won an auction for 93.35 per cent of the shares in the West Siberian CHP plant. One of the auction participants told Interfax that Investenergoproyekt, which won the auction, was acting on behalf of Gazprombank. "We actually used to own Investenergoproyekt, but we sold it to Evraz Group," Gazprombank's press office said, Interfax News Agency reported.
The winner bid 5.95 billion roubles for the shares, which were put up for sale by Unified Energy System, Kuzbassenergo and Siberian Coal and Energy Company (SUEK). The starting price was 5.7 billion roubles. Novosibirskenergo was the second bidder, the source said. UES itself confirmed that Investenergoproyekt won the auction.
The auction took place in Moscow on March 15th. Deutsche Bank, the sale organizer, accepted applications to bid between February 9th and March 9th inclusive. Kuzbassenergo, which owned half of the shares in the power plant, will receive half the proceeds from the sale. The rest will be split between UES and SUEK, which owned 22.97 per cent and 20.38 per cent, respectively.
Russian and foreign companies expressed an interest in the plant in the run-up to the auction. They included EvrazHolding, which is the main consumer of the plant's electricity, RusAl, Mechel, Britain's International Power and Italy's Enel.

New energy horizons for Europe

The European Commission welcomed an intergovernmental agreement to construct a Trans-Balkan pipeline that will be built on EU territory, bypassing the crowded Bosporus Straits. "It is going to alleviate the pressure on a very environmentally-sensitive area and it is going to increase the security of supply by providing an alternative route for the transit of oil. So, however you look at it, it's positive," Ferran Tarradellas Espuny, spokesman for Energy Commissioner, Andris Piebalgs, said, New Europe reported.
A day earlier, at the Presidential Mansion in Athens, Russia, Greece, and Bulgaria in excellent ambience signed an agreement on the construction and operation of the Bourgas-Alexandroupolis pipeline. Russian President, Vladimir Putin, Greek Prime Minister, Costas Karamanlis, and Bulgarian Prime Minister, Sergei Stanishev, attended the signing ceremony, marking a new era for the transport of Russian and Caspian crude to Europe.
Signing the agreement on behalf of the three countries were Greek Development Minister, Dimitris Sioufas, Russia's Industry and Energy Minister, Viktor Khristenko, and Bulgarian Regional Development Minister, Asen Gagaouzov.
The Greek premier, in full command of the signing ceremonies, told a well-attended press conference this "historic day" is the result of intensive preparation leading to the implementation of this strategic project. "This has been a pending issue for 14 years and it is now being managed in the best possible way for the benefit of all," said Karamanlis, who helped overcome last minute obstacles in negotiations.
He pledged that Greece will continue to work on the pipeline at the same intense pace in order to make up for lost ground and complete the work as quickly as possible.
Karamanlis said this project will place Greece and Bulgaria on the energy map. "Apart from individual benefits for individual countries this is a wider issue and a wider project that will be beneficial for the global energy market since it facilitates access to oil and products that are important products."
Putin defined the project's significance for energy security, noting that the Trans-Balkan pipeline will provide an opportunity to think about expanding supplies from the Caspian region through Russian territory.
"We are all equally interested in making this project happen. Bulgaria, Greece and Russia are equally interested in the construction of this pipeline, but, of course, as my colleague - the prime minister of Greece - said this is a project that is interesting for all the energy markets globally because the implementation of this project also provides a scope for further considerations on how oil will be brought further from the Caspian Sea," Putin said in response to questions. "It will be very interesting for US companies, Azeri companies or Kazak companies. This will also increase energy supplies for the global market."
In turn, Stanishev said the pipeline is of geo-strategic significance and will play an important role in strengthening energy security. "This is a new beginning of an era to come which should lead to great infrastructure works and projects which should play a very important role not only in Greece but rather in Europe."
It's notable that the Russian president stressed that the pipeline will be filled with new volumes of oil, which will be transported through Russia among others.
Assessing the Russian president's statements, the EU energy spokesman welcomed the possibility of using Kazak and Azeri oil for the pipeline. "That's perfect. That's reasonable because from a commercial point of view the more people you have using the pipeline, the more money you are going to get. So it will be risky to say they cannot use Kazak or Azeri oil, if they don't have enough oil to fill it," Tarradellas Espuny told New Europe.
The agreement to build the Bourgas-Alexandroupolis pipeline could also have a positive effect for another project, the Chevron-led Caspian Pipeline Consortium (CPC) -- operating the pipeline running from the Chevron-led Tengiz field in Kazakstan to the Black Sea.
The CPC partners - Kazakstan and Chevron - have been asking for Russia's permission to double the size of CPC capacity. "Russia has blocked that pipeline's capacity expansion until the Bosporus pipeline is agreed because otherwise that oil from the Caspian would be competing with Russian oil trying to get out of the Bosporus," Chris Weafer, chief strategist at Moscow's Alfa Bank told New Europe. Speaking telephonically from Washington DC, he said, "Russia has been telling Chevron: 'If you want permission for the doubling of the pipeline you have to lean on the US State Department to put pressure on Greece and Bulgaria to agree on the pipeline.'"
Washington, which backed a competing Trans-Balkan pipeline -- the Burgas-Vlore oil pipeline project - has eased its reservations about Bourgas-Alexandroupolis, realising that a bypass of the crowded Bosporus Straits, where tankers sometimes have to wait inline for 10 days, was long overdue.
Just a few days before Russia, Greece and Bulgaria signed the agreement for the construction of the Bourgas-Alexandroupolis pipeline, US Deputy Secretary of State Matt Bryza, who visited Turkey and Greece, said Greece and Bulgaria are US' allies in NATO and American companies are interested in the pipeline, so Washington does not oppose the pipeline.
Asked if American companies would participate in constructing the Bulgarian portion of the pipeline, the Bulgarian development minister told journalists in Athens it would be decided by the time construction is set to begin. He noted, however, that transit fees would be collected by Bulgaria.
Meanwhile, Bryza has urged diversity and multiple means of transport of hydrocarbons. The US opposes Russia's proposal to participate in the Turkish-Greek-Italian pipeline deal, which will transport natural gas from the Caspian region and the Middle East to Europe. Putin's visit to Greece followed his trip to Italy where Russian gas giant Gazprom and Italy's ENI finalised the details of a major gas deal.
Politicians, company executives and analysts alike believe the Bourgas-Alexandroupolis pipeline is ready to move forward. Transneft CEO, Semyon Vainshtok, told journalists in Athens that Russia, Greece and Bulgaria will form an international company and register its head office. According to the intergovernmental agreement, the international company will be registered in a European Union member state. A tender will then be held to conduct a survey and a feasibility study, and construction will start after it has been completed. This will all be done "within a very short time, in less than a year or two," Vainshtok said. Asked if everything will go well, Vainshtok said he is certain since Russian oil will be flowing through the pipeline.
Commenting on the agreement, Alfa Bank's Weafer said: "Everybody believes it's a done deal. In terms of the political decision to do it, I don't see any further obstacles. It looks like all parties have finally agreed ... Even the US now wants it done."

LUKoil to hold talks on West Qurna-2 project in Iraq

A team of experts from LUKoil planned to make a working visit to Iraq at the end of March or the beginning of April to hold talks on implementation of the West Qurna-2 project, LUKoil President, Vagit Alekperov, said, New Europe reported.
"We plan that the working visit of LUKoil Overseas (the LUKoil operator in extracting projects abroad) to Iraq will take place at the end of March - the beginning of April," he said. The company is conducting a steady dialogue with the provincial government in south Iraq, he said. "The company is ready for the speedy implementation of the project," he said.
In Alekperov's opinion, LUKoil will be able to get down to work at the field in 26 months.
In March 1997 a consortium of LUKoil (68.5 per cent), Zarubezhneft (3.25 per cent), Mashinoimport (3.25 per cent) and the Iraqi Oil and Gas Ministry (25 per cent) signed an agreement on the development of the West Qurna-2 field on production sharing terms. The PSA was to expire in 2020.
Proven recoverable reserves at the field amount to about 6 billion barrels of oil. Some 4.8 billion barrels of oil and 56.4 billion cubic metres of natural gas may be produced during the licensed development of the field. Developing the field will cost an estimated US$ four billion.
The sanctions imposed on Iraq after the Gulf War prevented Russian companies from implementing oil projects in Iraq. However, at the end of 2002, Iraq said it was cancelling the West Qurna-2 contract because LUKoil was not implementing the terms of the contract. LUKoil continues to treat the contract as being valid.
Earlier it announced plans to hold talks with the new Iraqi authorities about resuming the project and, if negotiations succeed, it plans to transfer 17.5 per cent of its stake to ConocoPhillips.

Rostekhnadzor approves Sakhalin II platform

Russian Federal Ecological, Technological and Nuclear Oversight Service (Rostekhnadzor) Director, Konstantin Pulikovsky, has approved an expert review on the safety of a new oil platform for the Sakhalin II project, the service said in a statement.
Rostekhnadzor also issued permission for the use of the LUN-A platform. The platform is designed to operate 21 wells and to produce over 6,000 tonnes of liquid hydrocarbons and 52 million cubic metres of natural gas per day, New Europe reported.
The concrete base for the platform was produced by Finland's Quattrogemini Oy, and the upper construction - by Samsung Heavy Industries Ltd (South Korea).
"The LUN-A platform is the largest facility of its kind on Russian territory, located in an area of difficult geological and natural-climatic conditions. According to the requirements of Russian legislative acts, when designing and building the platform all the necessary technical solutions were implemented to ensure the technological reliability, and industrial and ecological safety of its systems," the press release said.
Drilling of the first wells from the platform is planned in the second quarter 2007. In June 2006 Rosprirodnadzor approved the project to build well Number eight at the Lunskoye field, as part of the second phase of the Sakhalin II project.
In August 2006 project documents for the construction and operation of LUN-A wells at the Lunskoye fields received positive environmental expert review until 2016. In summer 2006 the project's operator Sakhalin energy installed the Lunskaya-A platform at the Lunskoye field off the Sakhalin coast.
The platform will produce most of the natural gas to be supplied to a liquefied natural gas plant build built on the shores of Aniva Bay.

LUKoil strikes oil at Condor block

LUKoil Overseas, the operator of LUKoil's foreign projects, has discovered geological reserves of oil of over 100 million barrels at the Medina structure of the Condor exploration block in Columbia, LUKoil said in a press release. At the moment the field is being prepared for commercial development, New Europe reported.
However, according to the statement, the project has already started to provide financial yields - about 4,000 barrels of Colombian high quality Vasconia oil produced during testing of the Condor-1 well, have been sold to North American consumers. "This is the first oil strike in history by a Russian oil company in the Western Hemisphere," the press release said. LUKoil Overseas and Ecopetrol signed a contract for the Condor bock on April 7, 2002. The block area amounts to 3,089 square km. The share of LUKoil Overseas in the project is 70 per cent, and Ecopetrol - 30 per cent. LUKoil Overseas Colombia Ltd. is the operator of the project.

Transneft adopts plan for oil pipeline bypassing Belarus

The technical board of Russian state oil pipeline operator Transneft approved on February 5th a plan for an oil export route bypassing Belarus, Transneft President, Semyon Vainshtok, said, New Europe reproted.
A pipeline that would link Unecha, a town near the Belarusian border in Bryansk region, to Primorsk, a Baltic coast town in Leningrad region, would have an initial annual capacity of 50 million tonnes, Vainshtok told Russian television. "From February 9-15 we will be presenting the project in the regions of Bryansk, Leningrad, Pskov, and Novgorod. After these presentations, on the 12th, 896 explorers are to leave for the proposed route of [the pipeline]. We will have deadlines as tight as possible as regards designing and construction under this fairly difficult project," he said. "We have not yet determined how much it will cost. But it can be said even now that it will be very expensive. My colleagues and I have been discussing this - if we didn't run such risks with neighbouring states, we wouldn't have to spent this amount of money," Vainshtok said.

Russia, Greece, Bulgaria endorse pipeline agreement

Russia, Greece and Bulgaria endorsed the Bourgas-Alexandroupolis oil pipeline agreement in the Bulgarian coastal city of Bourgas. Russian Deputy Industry and Economy Minister, Andrey Dementiev, Greek Secretary General of the Development Ministry, Nikos Stefanou, and Bulgarian Deputy Regional Development Minister, Kalin Rogachev, signed the document, Focus news agency reported. 
The pipeline project would strengthen Bulgaria's positions on the European energy market, Rogachev said. 
Stefanou said the project is an alternative way of the Bosporus Straight for transportation of oil from Russia and the Black Sea to EU countries. The route is safe and offers opportunities for high economic effectiveness. 
The agreement between the three governments will be signed in Athens after which an international project company will have to be set up. 
Construction works will start in the beginning of 2008 and have to finish within shortest terms, Stefanou said. 
One of the participants in the project - Russian oil company Rosneft - said the agreement might be signed in February, but a source in a related Russian department said he doubted that this would be possible, Interfax reported.
The 285-kilometre-long pipeline could initially carry 35 million tonnes of oil annually, but its handling capacity could be later increased to 50 million tonnes. The project is valued at some US$900 million.
Russian President Vladimir Putin said at a press conference two weeks ago the Russian side has made the necessary proposals for the project, all that remains is for them to be agreed by Greece and Bulgaria.

TNK-BP, Gazprom discuss Kovykta agreement

Gazprom and TNK-BP are in consultations about a stake in the Kovykta gas extraction project, chief of Gazprom's Financial-Economic Department, Andrei Kruglov, said during a telephone conference with investors on February 15th, New Europe reported.
"Talks and consultations are under way. It's too early to comment on anything while the talks are still in progress," he said. TNK-BP hopes to clinch a deal with Gazprom towards the middle of the year that would enable Gazprom to participate in the development of the Kovykta gas condensate field with TNK-BP retaining a "considerable" stake in the project.

Ukraine to receive access to gas production in Russia

Ukraine hopes to receive access to production of natural gas in Russia in exchange for access by Russian gas monopoly Gazprom to supplies of natural gas directly to Ukrainian consumers, Ukrainian Fuel and Energy Minister, Yury Boiko, said, New Europe reported.
"I know about agreements between our prime minister and the Russian government regarding Ukraine's participation in gas production in Russia in exchange for the fact that a joint venture is currently operating on the Ukrainian market. That is sufficient," the minister said on local TV on February 14th. Boiko said Germany's Wintershall AG is structuring its relations with Gazprom along the same lines. "Wintershall went down the same road, when it exchanged its share on the market for gas assets in Russia," the minister said.

Lithuania looks past Russia for energy supply sources

Lithuania's president said on February 13th he was working on a plan to circumvent Russia's energy hold on Eastern Europe by opening its ports for oil transports from elsewhere, including the dictatorship of Belarus, which has been under siege from the United States and the European Union. 
Lithuania, Belarus and Ukraine were "looking at alternative routes" using sea transport of energy supplies through its Baltic port of Klaipeda, Lithuanian President, Valdas Adamkus, told reporters in Washington, Deutsche Presse-Agentur (dpa) reported. 
The oil would come from Norway, Venezuela and elsewhere and be shipped inland via rail to "cover the immediate needs for everyone," Adamkus said. The premier revealed that he had discussed the plan with US Vice President, Dick Cheney. The US was critical of anti-democracy trends in Belarus, but Adamkus defended supplying Belarus on humanitarian grounds. 
"Belarus is affected as much as Ukraine in the manipulations by Mr Putin," Adamkus said. "This is not aimed at supporting a regime but rather responding to the needs of the Belarus people." 
Earlier, Adamkus called on the EU to present a common front to Russia on matters of energy and democracy. Adamkus met with US President, George Bush, on February 12th The Lithuanian president has been outspoken against Russia's "monopolistic hands" over its oil and gas supply, with its attempts to control its former Soviet satellite countries - many of which have joined the EU and NATO - by cutting off energy supplies. 
Adamkus outlined to reporters Lithuania's plans for energy independence, starting with a new nuclear reactor due to be opened in 2012 with participation by Latvia, Estonia, Poland and possibly Sweden. 
He said that his country's sale of a stake in the Baltic's only refinery, Mazeikiu Nafta, to Polish refiner PKN Orlen last year had created "some unhappiness" in Russia. Moscow in turn has dragged its feet on repairing an oil-feeder line that Lithuanian engineers could have fixed in "two to three weeks," Adamkus charged. 
Adamkus, who worked for 27 years in the United States as a government environmental protection agent during the Cold War, also warned that plans by Russia and Germany to build a gas pipeline serving German consumers could cause an "ecological disaster." 
The line is to pass underneath the Baltic Sea, where about 40,000 tonnes of chemical munitions were dumped after World War II, including mustard gas, according to the Helsinki Commission. "If they are putting a line under the Baltic Sea and touch the gas and release it, that's a disaster," he said. "It's the responsibility of Germany and Russia if they want to proceed and neglect the dangers." Poland, Lithuania and other transit countries for Russian oil and gas also oppose the Baltic pipeline because it would cut them out of the circuit. Adamkus said Lithuania's "entire foreign policy" was geared to keeping a good working relationship "with our big neighbour, Russia." 
"Russia, they are realists ... we recognise they are a power, and accordingly we are trying to be good neighbours and not create problems." But Adamkus, who supported Ukraine's Orange revolution that turned out a Russia-friendly government, said his country was also working with Ukraine, Georgia, Armenia and Azerbaijan to keep open the way to the future, which is "openness to ideas." 

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FOREIGN INVESTMENT

China may invest over US$130m in Sakhalin projects

Chinese investors are planning to invest over US$130 million in the Sakhalin economy, Igor Shlyakhter, president of the Association of Russian and Foreign Investors, said during a visit to Sakhalin by a delegation from China Development Bank During its visit, which ended on February 8th, the delegation discussed possible investment projects with the Sakhalin administration and representatives from the local business community. "A selection of projects for investment is currently underway. But currently at the forefront are forestry processing, agriculture, coal production, and housing construction, New Europe reported.
One of the conditions of the Chinese investors is that quotas be provided for Chinese workers employed in these projects," Shlyakhter said. As regards forestry processing and coal production, the Chinese investors plan to invest money in these sectors in exchange for receiving supplies of these products to China. He said that the Junhai corporation has been set up in Beijing to handle the practical side of cooperation with Sakhalin region. "This holding company has been set up to unite all the business circles in China interested in cooperating with Sakhalin region and to decide with them on projects in which the China Development Bank will invest," Shlyakhter said. It is planned to start implementing the first projects this year. Shlyakhter added that China Development Bank is participating in financing geological exploration work for the Sakhalin-3 project, through Sinopec. Zhao Jianping, the head of the Chinese delegation, said that Sakhalin region is the first Russian region with which the China Development Bank plans to implement joint projects in five or six sectors: in residential construction, transport and energy, agriculture, forestry, fishing and in telecommunications. "Based on the example of Sakhalin region we want to set up and develop a mutually beneficial cooperation mechanism, which we will then apply to other Russian regions. We plan to work based on the profitability of projects and also on their level of demand at a local level, and the level to which the projects complement both China and Sakhalin region. Another important condition is that the implementation of these projects increase the quality of life on Sakhalin," Jianping said. 

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FOREIGN LOANS

EBRD plans financing for CHTPZ Group

The European Bank for Reconstruction and Development (EBRD) is planning to arrange up to 140 million Euro of financing for the ChTPZ Group, a major Russian steel pipe producer, the EBRD said, New Europe reported.
The EBRD would provide 9-year senior debt financing of up to 140 million Euro, part of which will be syndicated to commercial banks. The proposed project consists of debt financing to ChTPZ Group's Pervouralsk New Pipe Plant (PNTZ) in the Sverdlovsk region to build a steel mini-mill with design capacity of 950,000 tonnes per year to produce billets for seamless pipes. This investment will allow ChTPZ Group to achieve vertical integration in seamless pipe segment, making it almost self-sufficient in billets for seamless pipe production. The project will replace ChTPZ Group's outdated open-hearth furnaces currently in operation at ChTPZ Group's Chelyabinsk Tube Rolling Plant in Chelyabinsk.

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