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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: 314  (22/02/07)

There are plenty of critics of Putin's Russia, mostly in the West. But before considering their point of view, it will be helpful to look on the positive side of the ledger and for what accounts for his enormous popularity, which has never fallen below 70% in the polls.
Who better to give a positive view of things than Putin himself. The Russian Orthodox New Year comes in mid-January, which means that the best time for the annual review of the nation and its dissemination to the Western world is on the first day of February.

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TOUR D'HORIZON
President Vladimir Putin on February 1st rejected Western criticism that he is using his energy policies as a weapon, denounced the deployment of US anti-missile systems in Eastern Europe, and said he didn't believe in conspiracy theories in the poisoning death of a former KGB officer.
Addressing 1,200 reporters at his annual news conference, and then answering their queries for over three hours, both records, Putin rejected allegations in the West that price disputes with Ukraine and Belarus - which triggered interruptions of Russian oil and gas deliveries to Western Europe - amounted to using Moscow's vast energy reserves to achieve political aims. Moscow used to be criticized for subjugating and bullying its neighbours and exploiting them economically. There was much truth in this of course, but at least it provided them in return with cheap and reliable energy. Now it is accepting their independence, but wishes, naturally enough, that they in turn accept the corollary, market prices for energy. 
"The thesis is being thrust on us all the time that Russia is using its old and new economic efforts to attain foreign political goals. It is not so," Putin said. The price increases, he said, are driven simply by Russia's desire to get fair prices for its gas and oil after years of providing energy at below-market prices to former Soviet neighbours. "We're not obliged to subsidize the economies of other countries," Putin said. "Nobody does that, so why are they demanding it of us?"
Putin uses the annual news conference, televised live on two nationwide state-run channels, to burnish his image domestically as a competent, caring president in control of a resurgent country with a growing economy and global clout. He can, indeed, point to a 6.8% GDP growth rate last year and an annual average thereabouts since he took over in 2,000.
He had a lot of luck here of course, the new millennium coinciding with a steep rise in oil prices. But the people are judging by results. Their living standards have doubled in the interim. The salaries of country doctors have tripled, indeed, while every mother of a second child receives a bonus of US$10,000 to spend on its education or the like. 
The fundamentals are being looked after too. A stabilization fund on the Norwegian model to prevent an over-appreciation of the rouble and to have a nest-egg when the oil runs out has been set up, now worth more than US$80bn. Foreign exchange reserves have soared to US$250bn. 
But Moscow's international reputation has been battered by the killings late last year of two critics: investigative journalist Anna Politkovskaya in Moscow and former KGB agent Alexander Litvinenko in London, who blamed Putin for his radiation poisoning in a deathbed statement.
Asked about Litvinenko, who died after someone slipped him radioactive polonium-210 in London last fall, Putin described him as a figure of little importance. "Before being fired from the Federal Security Service, Alexander Litvinenko served in the escort troops and had no access to state secrets," said Putin, himself a former KGB officer.
Litvinenko had accused Putin's Kremlin of involvement in his poisoning and the death of Politkovskaya - which Russian officials deny. In Russia, officials and journalists seem to favour the theory that the killings were committed as part of a plot to discredit the Kremlin.
Putin endorsed neither theory. "Openly speaking, I don't believe in the conspiracy thesis," he said. He declined to speculate how Litvinenko came to swallow the rare radioactive poison that killed him. "Only the investigation can answer that," he said.
Putin rejected Washington's claim that possible deployment of US missile defence sites in central Europe was intended to counter threats posed by Iran and warned that Russia would take countermeasures. US officials have said that proposed missile defence sites in Poland and the Czech Republic would be designed to intercept a missile attack by Iran on Eastern Europe, and would not affect Russia's security.
But Putin said the Kremlin did not trust that claim. "Our military experts don't believe that the missile defence systems to be deployed in Eastern Europe are intended to counter the threat from Iran or some terrorists," Putin said, adding that Tehran currently does not have missiles capable of reaching Europe. "We consider such claims unfounded, and, naturally, that directly concerns us and will cause a relevant reaction. That reaction will be asymmetrical, but it will be highly efficient," Putin said.
Putin said that Russia's latest Topol-M intercontinental ballistic missiles were capable of penetrating missile defences and added that more-effective weapons systems are being developed. "We will have next-generation systems immune to any prospective missile defence," Putin said. While missile defence systems under development will only be capable of tackling ballistic missiles, he said, the new weapons will be capable of changing the altitude and direction of their flight on their way to target. "Missile defence systems are helpless against that," Putin said.
Putin's second term ends in 2008, and the Russian constitution limits presidents to two terms in succession. Russian politics is dominated by talk of his successor.
The Kremlin is widely believed to be grooming two protégés: First Deputy Prime Minster Dmitry Medvedev and Defence Minister Sergei Ivanov. Open support from Putin - who enjoys enormous popularity - for either man would virtually ensure his election.
But Putin remained coy about whom he will support. "There will not be a successor, there will be candidates for the presidency," Putin said, adding that the government must ensure a democratic campaign. "I reserve the right to express my preference, but this will be done only in the pre-election period," Putin said.
At the start of the news conference, the Russian president praised his nation's remarkable economic comeback since the desperate days of the 1990s - the gross domestic product, he said, grew at least 6.7 per cent last year. And there is increased spending on education and public health. But he acknowledged the government has much to do to narrow the gap between rich and poor.
"But we still have to do very much in the social sphere, including resolving one of the main tasks that we have in this area - that is, reducing the gap between highly paid groups of the population and the citizens of our country who still live very, very humbly," Putin said in his opening statement, before taking the first questions from some 1,200 journalists.
Russia's relations with the West are a perennial topic at the news conference, which gives foreign journalists a rare chance to directly ask a question of Putin - and gives Putin a chance to portray Russia, as he often does, as a country under attack from ill-wishers abroad.

Putin singles out US for triggering a new arms race
Something of a new Cold War atmosphere is developing between Russia and the US. Both sides are re-arming. Putin squarely blames the Americans; and there will be many who will agree with him in Europe and elsewhere.
After all everybody knows who is waging two wars beyond its territory (Chechnya is still within Russia). The US had last year a defence budget of US$582bn, 23 times Russia's US$24.9bn and nearly five times China's US$122bn.
Putin delivered the strongest attack of his seven-year presidency on the US on February 10th in Munich, blaming it for fanning conflicts across the world through the unilateral use of 'hyper-force'. He said America was seeking to impose its standards on other nations, triggering new arms races and the spread of nuclear weapons, and threatening Russia through new missile shield programmes, notably in Central Europe. 
In a blistering assault that reflected the Kremlin chief's self-confidence and conviction that he has restored Russia's international clout after years of decline, Putin told a security conference in Munich that America was destroying the international system and seeking to eliminate nuclear deterrence through the uncontained use of its power. 'One state, the United States, has overstepped its national borders in every way,' he told dozens of Western ministers and policy-makers including the US Defence Secretary, Robert Gates, and a likely Republican presidential contender, Senator John McCain.
'This is very dangerous. Nobody feels secure any more because nobody can hide behind international law,' Putin said. 'This is nourishing an arms race with countries seeking to obtain nuclear weapons... We're witnessing the untrammelled use of the military in international affairs... Why is it necessary to bomb and to shoot at every opportunity?' 
The Russian leader accused Washington of plotting to evade its commitments to cut nuclear arsenals - already made through US-Russian arms treaties - and raged against the Pentagon's plans to site parts of its missile shield project in Poland and the Czech Republic. 'I don't want to suspect anyone of aggressiveness,' said Putin. 'But if the anti-missile defence is not targeted at us, then our new missiles will not be directed at you.' 
The tirade indicated that the Kremlin is gearing up for confrontation with the Americans. He did not have a good word to say about Washington's policies. 
McCain told The Observer the speech was 'the most aggressive from a Russian leader since the end of the Cold War', adding that it was confrontational, with some of the observations bordering on paranoia. The US Defence Secretary sat stony-faced throughout Putin's words. 
The Kremlin spokesman, Dimitry Peskov, denied that his leader had intended to be aggressive or confrontational, but said that the time was right for Putin to throw down the gauntlet. On several key disputes dominating the international agenda, Putin came out in flat opposition to the Americans. Russia was supplying Iran with air defence equipment, for example, so that Tehran did not feel surrounded by enemies. 
With the US pushing for independence for the Albanian-dominated province of Kosovo in former Yugoslavia, Putin said he would block independence unless Serbia agreed to it. In Russia, he added, Western non-governmental organisations operated as 'instruments' of Western governments. 
He reserved his bitterest complaints, however, for the US drive to expand NATO into former Soviet Eastern Europe and for the plans to deploy parts of the missile shield in Central Europe. 'Why do you need to move your military infrastructure to our borders?' he declared. Putin has been incensed by the Bush administration's intention to site missile defence systems in Poland and the Czech Republic. 
The US says the installations are being built to shoot down possible long-range missiles fired by Iran or North Korea. But Mr Putin has dismissed this claim as ludicrous, and has said the real target of the missile shield is clearly Russia and its vast nuclear arsenal. 
Moscow was worried the defence shield in eastern Europe could turn into a Trojan horse. "This is irritating for Russia," said Yevgeny Miasnikov, a senior research scientist at Moscow's Centre for Arms Control. "When the Soviet Union collapsed a vacuum was created in the countries of the former Warsaw bloc. The US has tentatively moved into the vacuum and is creating infrastructure that might threaten Russia. The Bush administration's system is not justified. Iran doesn't have a missile capability yet to hit the US. The logical place to put a defence system would be in Turkey, or in Russia itself." 

Big rise in military spending raises fears of new challenge to West
Even before Putin's Munich speech concerns were growing in early February over a new bout of East-West confrontation, after Russia unveiled a big increase in military spending in the wake of the American decision to site parts of its controversial missile defence system in eastern Europe. 
Russia's hawkish defence minister, Sergei Ivanov, revealed an ambitious plan for a new generation of intercontinental ballistic missiles, nuclear submarines and possibly a fleet of aircraft carriers. Moscow also intended to revamp its early warning radar system. This major overhaul of Russia's military infrastructure would cost US$189bn over eight years, he said, adding that he wanted to exceed the Soviet army in "combat readiness." The sharp rise in expenditure comes at a time of growing coolness in US-Russian relations.. 
In his speech to Russia's parliament, Mr Ivanov announced that the military would get 17 ballistic missiles this year, compared with an average of four in recent years. The plan envisages the deployment of 34 new silo-based Topol-M missiles and control units, as well as another 50 such missiles mounted on mobile launchers by 2015, he said. Russia has already deployed more than 40 silo-based Topol-Ms. 
Writing in a Munich newspaper on February 8th, Mr Ivanov said: "The deployment of American missile defence in Europe has not only a military but also a symbolic significance. Fifteen years after the end of the Cold War a situation is obviously being created in which the continent again can only manage with American protection and with reinforced American military presence." 
In 2002, Mr Putin and George Bush signed a treaty obliging both sides to cut strategic nuclear weapons by about two-thirds by 2012. But Russian-US ties have since worsened steadily over disagreements on Iraq and other global crises, and US concerns about an authoritarian streak in Russia's domestic policy. 
The modernisation of the armed forces has been made possible by Russia's spectacular economic resurgence based on oil and gas revenues. After the Soviet Union's demise, Russia's vast military economy collapsed. The squeeze continued in the 1990s, but since 2000 spending has gone up, with this year's budget of US$31bn almost four times the amount spent in 2001. 
Russian defence analysts point out, however, that defence spending is still well below that of the mid-1980s Soviet Union.

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SOME OUTSIDERS' VIEWPOINTS
There is a time bomb ticking away that is potentially lethal for Putin and his administration. It is a work which has just been republished that is a dagger pointed right at the heart of the legitimacy of the Putin Kremlin. er-ups rarely work - although this is a speculative proposition, since if they do, by definition nobody apart from their perpetrators gets to know about them.

A Russian doll of cover-ups 
Still one concerning Russia has every sign of unravelling right now. It is actually a case of a cover-up within a cover-up, as with a Russian doll. 
The book has come out in a revised form and is aimed directly at undermining the Putin Kremlin, Blowing up Russia: terror from within. It is co-authored, being by Alexander Litvinenko and a historian, Yuri Felshtinsky, based in the West since 1978. There is much more interest this time than last time in 2002, because the former was assassinated last year, probably by his former colleagues and fellow spooks in the KGB, whose domestic successor is the FSB. 
The Russian authorities vigorously deny this. They are not going to admit that some KGB type could have conducted an assassination on foreign soil. They still do not own up to the attempt on Pope John Paul II in 1981 by a Turkish proxy. They are refusing to allow the extradition of a key suspect, Andrei Lugovoi, a former bodyguard in the KGB, who met Litvinenko on November 1st in a hotel bar in London with a Russian business associate. He appears to have left traces of polonium 210 all over the place before and after the encounter. He claims that he, and fellow businessman, Dmitri Kovtun, who did also, were framed.
There are good reasons to suppose that he may be right, although it is possible both he and Kovtun were in on the plot. The British police have worked out how Litvinenko came to imbibe the radioactive substance. Kovtun had a co-traveller, who was present at the meeting with Litvinenko, This mysterious figure, called 'Vladislav'by police, who have identified him as the real poisoner, a hired killer, travelled on two false passports and stayed at no hotel, while he had the ideal opportunity to have administered the poison when he prepared a cup of tea, which the unsuspecting spook took in a fourth floor room in the hotel, to which they had repaired in order for him to make a special proposal to the victim. A very special tea.
The Russians are saying that they would not even consider the request for extradition for anyone involved unless Boris Berezovsky, the oligarch in exile in the UK and a benefactor of Litvinenko's, indeed the publisher of the book, is extradited first. They must know that this is quite impossible since he has political asylum. It would be contrary to ancient legal custom to hand him over - and, even if he did not have asylum, it would only be in the power of the courts, not of the government, to do so. 

The voice of Litvinenko from beyond the grave
And what would have been the motives of the killing? Firstly, Litvinenko had defected to the other side, thereby forfeiting his right to life according to the KGB code. Secondly, he was involved in a far greater treason - the implication of the Russian state or its more dubious appendages in criminal activity of a high order, namely the slaughter of its own people for cynical political ends.
A confirmation of the first point came in a BBC Newsnight programme on February 7th, when his former commander in the FSB, Alexander Gusak, called him 'a direct traitor,' who had shopped various Russian agents to the British. Under Soviet law he would have received the death penalty; under Russian law now twenty years.
Gusak headed what Litvivenko described as a 'death squad.' He confirmed himself that a superior officer had instructed them to kill Berezovsky in 1997. He added that "If the director of the FSB, Nikolai (Kovalyov) had personally given me the order, I would have carried it out - without written instructions. I loved Kovalyov." This all rather bears out Litvivenko's claims that the FSB is a murderous organization and that it perhaps was responsible thereby for Putin's assumption of power. 
His book reiterates charges by now well-known that the FBS engineered the deaths of more than 300 in apartment block bombings in September, 1991, allowing Putin to win popularity by starting the Second Chechen War in December and to succeed Yeltsin the next year. From being on 2% in the polls in August 1999 he was elected by a landslide in March 2000.
Litvinenko is unlikely to dent Putin's popularity seriously in the immediate term. Russians are now concerned about bread and butter issues, not political shenanigans in or around the Kremlin. Some might even admire Putin for his ruthlessness here, if he personally had a hand in it, which is not at all likely. Nor is it that he had a hand in Litvinenko's death. 
Putin makes a credible case that Litvinenko was a low level operator and it is more likely that his murder was commissioned by others than the president of the Russian Federation
Not that it will have been entirely in vain. It gives historians of the future new evidence to weigh up Putin and assess his record. 
The events of 1999 need to be put in a context. They were not the first time that FSB faking of terrorist attacks has been suspected - just the first with such momentous consequences. The story is a tangled one - too much so to be repeated fully here. But it is highly plausible that various acts of terrorism committed in Moscow in November 1994, attributed to Chechen terrorists to prepare the public for the First Chechen War, launched in December, were in fact FSB operations. 
One on November 18th miscarried, a bomb going off too soon, before the train due to cross the rail track arrived. The perpetrator's body found one hundred metres away was that of a Russian, Captain Andrei Shchelenkov. He was in the employ of an oil company, Lanako, an organisation wholly staffed by agents of the Russian counter- espionage services under a certain Maxim Lazovsky, a highly valued agent of the Moscow Region Department of the FSB.
A series of explosions similar to the 1999 ones had occurred in 1996, prior to Yeltsin being narrowly re-elected against the odds. Litvinenko's advice to his co-author, unlike him able to visit Moscow, was; " Find out everything you can about Lazovsky. He was an FSB operative and he was in charge of the terrorist campaign of 1996. If you understand Lazovsky, how he worked, how his organization was built up, you will understand everything. But, Yuri, be careful. If anyone finds out you are investigating Lazovsky, they will kill you, since they will figure out very quickly that you are interested in 1999, not 1996. But the key to everything is Lazovsky and his system."
As for 1999, indeed, there was an owner of a small food-distribution shop in one of the apartment blocks blown up who was from the North Caucasus, Alhemez Gochiyaev, but was a Karachai, not a Chechen. He was accused of the bombing at first, but was a hardly plausible suspect and the charges were dropped. He agreed to collaborate with the authors from hiding. 
Three Duma members who began to investigate the matter and the bombings generally have been killed, two shot, Sergei Yushenko and Vladimir Golovlyov, and one poisoned, Yuri Schekochikhin. But there is no solid proof that the FSB were responsible. Russia has become so lawless anyone could have been. 
There is an extraordinary testimony by Vladimir Kondratiev, a former FSB operative and member of its top secret Department K-20, he claims, who was the explosives expert in the first bombing in Moscow, organized by a special force, set up to implement, 'Hiroshama,' the series of bombings as a whole. In March 2001 he wrote a letter of penitential confession, entitled 'I bombed Moscow, 'which he sent on the internet to the electronic bureau, FLB, of the Federal Investigative Agency. They told the FSB, who promptly dispatched two computer experts to download it. They have not been heard from subsequently.
The special force was recruited from inmates of penal colonies, mostly from the Caucasus, plus a few special agents, such as Kondratiev. He was obliged to be part of the operation on pain of 'being silenced forever.' But after the first bombing he could take no more. 
"The day after the bombing, I went to the site of the operation, intending to assess the implementation and analyse the results. I was shaken by what I saw there…I had blown up buildings before, but they were not people's houses, and they were not in Russia. But here I had blown up a Russian house and killed Russian people, and the Russian women weeping over the Russian corpses were cursing the one who'd done this in my native language. And standing beside them I could physically feel the curses enveloping me, sinking into my head and my chest, filling my body, infusing every cell. And I realized that I WAS CURSED!"
He asked to be moved to another section on the grounds of mental and physical exhaustion. He was suspended and decided to go to his country dacha to recover. On the way, the brakes failed in his car, something that had never happened beforehand, as he took great care of them; and he realized that they were trying to eliminate him. Being a pro, he knew what to do and drove his car straight into a river to defuse any bomb. He left Russia that very day, with enough to start up a business in a foreign country, where he lives under an assumed name, his neighbours being totally unaware of his past. 
By fleeing he saved his life. For there are indications that everyone else directly involved has been killed, a logical procedure, as also doubtless their killers. 
Disposing of the Caucasus criminals would have been the easiest to do. It is not surprising that the master of operations, Lazovsky himself, has been shot. This happened in 2001. 
The most suspicious incident of all remains the 'training exercise' carried out in Kazan just after the bombings. Local police discovered explosive materials being put in the basement of an apartment block by FSB agents, a fact not denied by the organization. Its head, Nikolai Patrushev, said that it was an experimental training exercise to test local reactions. But then the story was changed. One thing is for sure - the bombings stopped.
What then started was a ridiculous string of training exercises, the planting of damp squib bombs and the like all over the place, as if to show that the Kazan affair was simply the first of a series of tests of the vigilance of the police and public. Putin went onto the air and said that they had passed the first test with flying colours - but the subsequent ones showed that further vigilance was necessary - needless to say against Chechens. What better way than to re-occupy Chechnya?
To the Russians conversant with their history, this has the smack of official obfuscation and nasty stuff from way back. The FSB is after all the heir to a long line of secret police forces, the Cheka, OGPU, NKVD, etc in Leninist-Stalinist times and the KGB from 1954, that carried out many a clandestine, sanguinary operation in their time, such as the assassination of Mayor Kirov of Leningrad in the city in 1934, that set off Stalin's great purges. Kirov was very popular, the one real rival to the dictator. Disposing of him and blaming it on a common criminal killed two birds with one stone. Few historians doubt that it was done directly on Stalin's orders.
He was in a long Tsarist tradition here. The readers of The Secret Agent by Joseph Conrad will take the point.
Putin is a different personality. Those with a strong interest in him winning could have done it for him without his knowledge. But he must have long since suspected this. He prefers not to think about it. Two things are for sure, no trial of Chechen terrorists has taken place indicting them for the deadly deeds; and they have never been backward beforehand about claiming responsibility for ghastly outrages, yet have never claimed those of 1999. The bombings were just a little bit too convenient for the Kremlin to have been accidental.
There is another significant fact, a consignment of 5,000 copies of the first edition of Blowing up Russia were impounded in 2002 by Russian custom officers, while the second edition is still banned in Russia. 

The detonators of the time-bomb ticking away?
Somebody is very frightened it will all get out. It already has in the West.- big time! Will it ever in Russia?
Hollywood has taken the story up. Its studios are in a race to bring out the first film on the affair. Michael Mann, who was behind Miami Vice and The Aviator, has been offered US$1.5m by Columbia Pictures for Death of a Dissident, written by the spy's widow, Maria.
They face competition from Johnny Depp's company who want to make Sasha's Story; The Life and Death of a Russian Dissident, written by Alan Cowell, the New York Times London bureau chief. Sasha was a nickname of the agent. 
A third film, Blowing up Russia, is being made by the Beverly Hills-based Braun Entertainment Group. It is to be a spy thriller based on Litvinenko's book, relating the whole saga. This could surpass anything that Graham Greene or John Le Carre thought up; and it's for real.
No wonder that the Kremlin has let it be known that it will take steps to prevent all three productions from being seen in Russia. But that will only add to their allure and within Russia, give them samidzat status. The publishers of Blowing up Russia put Banned in Russia on the cover. Rather an obvious ploy for anyone seeking to distribute any of the three films in Russia.

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ENERGY

Norlisk To spin off power assets


Russian metals giant Norlisk Nickel said recently that it would spin off its power assets, worth US$2.5bn, before the end of this year, as the firm's key owners accelerated their divorce and speculation grew over a possible take-over bid, the Financial Times reported on February 6th.
The statement came just after Mikhail Prokhorov, the company's co-owner, said he would sell his half of a combined 54.8% stake in Norlisk to partner Vladimir Potanin and stand down as its chief executive as part of a broader carve-up of their assets. Prokhorov is to take over the firm's power and hydrogen fuel cell assets.
The division of holdings comes amid increasing speculation the Kremlin could seek to take control of Norlisk, which produces one-fifth of the world's nickel output, as it strengthens its grip on the country's strategic resources.
Analysts said the split could ease the way for Mr Potanin to sell Norlisk to a state-controlled firm such as diamond monopoly Alrosa.
Mr Potanin did not rule out the possible nationalisation of his group in an interview published in the Russian edition of Newsweek recently. When asked about the possibility of the state buying Norlisk shares, he said: "If that happens, I will not see it as a personal tragedy, but as a change in the business climate."
These moves follow Mr Prokhorov's detention in January by French prosecutors, who questioned him as part of an investigation into alleged organised prostitution in the French ski resort of Courchevel. He was released without charge. But Mr Potanin, one of the savviest oligarchs in Russia, admitted that the incident had sped up his decision to go.
"This scandalous situation sped up the announcement, which we made in order to close the chapter," Mr Potanin said in remarks broadcast on Russian television.

Gazprom to begin direct gas deliveries to Italy 

Gazprom is planning to start delivering gas directly to Italian consumers in April 2007, deputy chairman of the Russian company Alexander Medvedev said. "This involves delivering 100 million cubic metres at the first stage," the Gazprom official said in an interview with Italy's L'Espresso weekly on February 2.
The volume of deliveries will gradually increase. "The goal is to reach the level of 3.5 billion cubic metres. However, this requires time," he said, adding that Gazprom hopes to acquire 10 per cent of the Italian gas market.
An Italian partner to work with has yet to be chosen, Medvedev said. "We have a good choice of potential partners, including the most famous - Enel and Edison," he said. 

Lundin Petroleum to triple investment in Russia

Lundin Petroleum will triple investment in Russia projects to US$113 million this year, the Swedish company said in a statement. The company plans to invest US$40.1 million in hydrocarbons extraction and US$73 million in exploration in Russia. The drilling work programme envisages the drilling of seven exploratory and operating wells at the Ashirovskoye field in Orenburg region, seven operating wells at the Sotchemyu-Talyu field and two operating wells at the North Irael field in Komi. Lundin plans to continue drilling at the Ashirovskoye and Caspian fields in 2008-2009. Lundin plans to increase daily output to 5,500 barrels of oil by the end of 2007 in Komi, to 1,000 barrels in Kalmykia and to 500 barrels in Orenburg. At the Lagansky licensed block (Lundin has a 70 percent participation share and Canada's Arawak Energy - 30 per cent), the company plans to drill two exploratory wells at the Morskaya-1 and Lagansky-1 structures and to carry out 500 linear kilometres of 2D seismic exploration and 200 square km of 3D exploration. 

Russia, India to build new nuclear power reactors

Russia has offered to build several nuclear power reactors for India in a draft agreement signed during the visit of Russian President, Vladimir Putin, in New Delhi on January 25th, New Europe reported.
After wide-ranging talks Putin and Indian Prime Minister, Manmohan Singh, also issued a joint statement promising cooperation on the peaceful uses of atomic energy. 
A memorandum of intent for the development and construction of four additional atomic reactors in the Kudankulam power project in the southern state of Tamil Nadu and at other new sites in India was signed in the presence of Putin and Singh. 
Singh said Russia had agreed to help construct four additional reactors at India's Kudankulam power project. Russia is already helping to construct two reactors at Kudankulam under a 1988 agreement. 
The new reactors can be built only after international restrictions on trading in fissile material with India are lifted by the Nuclear Suppliers Group and the International Atomic Energy Agency (IAEA). 
"India undertakes that the reactor facilities and nuclear fuel supplied by Russia shall remain under IAEA safeguards during the entire period of actual use in accordance with the agreement on safeguards, which shall be concluded between the Republic of India and the IAEA," the joint statement on nuclear energy cooperation said.

TNK-BP holding acquires 50% of Vanyoganneft 

TNK-BP Holding has completed a transaction to buy 50 per cent of Vanyoganneft, in Tyumen region, from Occidental Petroleum, its partner in the joint venture, the Russian holding said in a press release. The transaction was closed on January 18, the release read. TNK-Nizhnevartovsk, a TNK-BP subsidiary, owns the remaining 50 percent stake in Vanyoganneft. The company said earlier that the transaction was worth around US$485 million. According to the annual reserve audit of TNK-BP conducted as of December 31, 2005 by DeGolyer and McNaughton, Vanyoganneft has approximately 25 million tonnes (189 million barrels) of oil equivalent proved reserves and 203 million tonnes (1.4 billion barrels) of oil equivalent proved, probable and possible resources according to criteria established by the Society of Petroleum Engineers, the release said. Vanyoganneft is located approximately 60 kilometres from the TNK-BP-operated super giant Samotlor field in Nizhnevartovsk in the Khanty Mansisk Autonomous District.

Rosneft, ONGC to broaden cooperation

Russian oil company Rosneft and India's Oil and Natural Gas Corporation Ltd. have struck a deal to broaden cooperation by implementing projects in Russia, India and third countries, Rosneft said in a statement.
ONGC Chairman and Managing Director Radhey S. Sharma and Rosneft President Sergei Bogdanchikov have signed a relevant memorandum of mutual understanding.
Rosneft and ONGC will study opportunities for joint exploration, extraction and transportation of oil and gas, as well as other aspects of cooperation, including joint participation in auctions to acquire assets and companies in Russia, India and third countries. The companies have also agreed to jointly assess their possible role in oil refining and retail marketing in India, using their ties with other companies in that country.
Rosneft and ONGC will also set up two working groups, one of which will be responsible for expanding production and the second will be in charge of refining and sales. After choosing a joint project the companies will decide on the structure of the joint venture that could be set up to implement the project.

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MINERALS & METALS

Evraz Group completes purchase of Oregon Steel

Russia's Evraz Group has completed a deal to acquire the US steel company Oregon Steel Mills, Evraz said in a statement. Evraz announced plans to acquire Oregon for US$2.3 billion (US$63.25 per share) last November. The Oregon board of directors unanimously recommended to shareholders to approve the deal, and the deal also received the support of trade unions, and this year Evraz received the sanction of the US foreign investment commission.
The offer to acquire the shares was valid until January 12. By that time the Evraz SPV - Oscar Acquisition, which has now merged with Oregon, had acquired 91.5 per cent of the US company's charter capital. According to the statement, Oregon shareholders that did not offer their shares for sale as part of the offer will also receive US$63.25 in cash for one share.
Evraz President Alexander Frolov was quoted in the statement as saying that he is satisfied with the fact that the deal was closed on schedule. 
He said that the unified company has become a world leader on the market for rails, with a strong position in the two countries with the largest rail networks - the US and Russia. Credit Suisse was exclusive financial advisor to Evraz and the dealer-manager for the tender offer. UBS Securities LLC acted as lead financial advisor to Oregon Steel in the transaction, and KeyBanc Capital Markets delivered a fairness opinion to Oregon Steel's board of directors. Credit Suisse and UBS also organised a one-year syndicated credit of US$1.8 billion, which Evraz is using to finance the deal.

OMK'S Vyksa plant targets 16% more pipes in 2007

The Vyksa Steel Plant (VMZ), a unit of the United Metallurgical Company (OMK) from the Nizhny Novgorod region, aims to produce 1.778 million tonnes of pipes in 2007, Vladimir Kochetkov, VMZ's managing director, told reporters. This would represent a 15.7 percent-increase in production for VMZ, which turned out 1.536 million tonnes of pipes in 2006. Kochetkov said VMZ planned to produce 982,095 tonnes of large-diameter pipes, up from 843,140 tonnes in 2006; 447,500 tonnes of crude steel, down slightly from 477,635 tonnes; and 800,000 railway wheels, down from 805,379 tonnes. Kochetkov said the Vyksa plant supplied 207,944 tonnes of pipes 1,420 millimetres in diameter for Gazprom's Nord Stream gas pipeline; 186,605 tonnes of 1,067-millimetre pipes for Transneft's Eastern Siberia - Pacific Ocean oil pipeline; and 45,730 tonnes of 820-millimetre pipes for Rosneft's Vankor gas condensate field in 2006. He said the contract with Rosneft had now been completed. VMZ also supplied 27,431 tonnes of 610-millimetre and 720-millimetre pipes for the Kovykta gas condensate field under a contract with TNK-BP. Kochetkov said VMZ would continue to supply pipes for the overland section of the Nord Stream pipeline this year and intended to bid at a March tender to supply pipes for the pipeline's underwater stretch. He said VMZ had already applied to bid at the tender and was buying additional equipment and training staff to produce underwater pipes. VMZ will also continue to supply pipes for the ESPO pipeline this year, and that the deliveries would include 1220-millimetre pipes from the end of January. VMZ has signed two contracts with Gazprom to deliver pipes for the Nord Stream overland section: one for 107,000 tonnes and the other for 170,000 tonnes. The Transneft contract is for around 200,000 tonnes of pipes.

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