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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: 316  (26/04/07)

Berezovsky makes hollow boasts
The exiled tycoon, Boris Berezovsky, boasted in mid-March from his exile in England that he is organising a revolution in Russia to overthrow the Putin regime since there is no other way to remove Putin. Revolution invariably involves the use of force, he says. He claims to be financing the affair from London and to be in touch with top people in the Kremin, who are ready to strike.

He retracted the claim to be about to employ violence a few days later aware no doubt of the huge embarrassment he was causing the British government. According to the UK's asylum laws he was in the clear, since he was not threatening British subjects with force. But things could be made very sticky for him for all that.

The episode recalls the behaviour of Trotsky in the 1930s, who most unwisely threatened Stalin with a violent overthrow from within by Trotskyite sympathisers in the Kremlin, the bureaucracy, the party elite and the armed forces. Trotsky's Bulletin was regularly making these threats. Stalin's paranoia and repression was only increased, leading to the great purges of personnel in all these institutions as the decade wore on. 

One can only hope that Putin realises that Berezovsky is talking through his hat. Any serious conspirator would hardly broadcast the matter to the world beforehand. He is just trying to vex his archenemy, whom he feels he created in the first place before they fell out. To ignore the business entirely would be the wisest course after the initial fully-justified rebuke. 

Whatever one may think of Putin he is undeniably popular, what with the economy on the mend, whereas Berezovsky and his ilk, Khodorkovsky et al, are loathed as the prime beneficiaries of what is popularly perceived as a scam, the privatisations of the 1990s, in which Russia was fleeced of its state assets for a song. In addition, Putin appears to be 'removing' himself next year, when there is to be a new presidential election for his successor.

The robber barons give way to the robber boyars
In fact the present decade has seen the old robber barons either chased out, imprisoned or thoroughly intimidated and subdued to the Kremlin's will. They have been replaced in positions of power and wealth by the siloviki, the robber boyars of the security services, who are dear to Putin's heart, his old pals from the days of the KGB.

They were much less prominent under Yeltsin and decidedly resented the way the likes of Berezovsky enriched themselves, wanting to have a go themselves. Putin is giving them their head here. Yukos, for instance, has been handed over to state-run companies, Gazprom and Rosneft to the fore. A new dispensation has side-lined the old guard, often Jewish, and brought on the Russian KGB veterans.

Berezovsky is right out on limb. He can forget about his revolution being abetted by Kremlin inmates.

The looming succession problem 
There is a change of guard looming all the same, if Putin sticks to his word that he will not attempt to change the constitution and stand for a third term next year, when presidential elections are due. He seems to mean it, which does not preclude him coming back in 2012 or 2016. The constitution only forbids three consecutive terms.

The two front-runners to succeed him are the hard-line Minister of Defence Sergei Ivanov and the reformer Dimitri Medvedev, both now deputy prime ministers under a figurehead premier. Whichever receives Putin's endorsement would certainly win. Medvedev would be the choice of the West. For that very reason he might well not make it. Russia is turning very much against the West these days, above all the US.

Bush will still be in the White House next year, while US troops will still be in Iraq and Afghanistan. Moreover, there are plenty of other contentious matters too. 

The new Cold War? 
There is even talk of a new Cold War, what with Putin's creation of a 'managed' democracy, in other words an authoritarian regime with a democratic facade, Potemkin democracy, with nothing liberal about it. But Russians seem to accept the authoritarian regime with a thin democratic facade, that they now have. They associate Western-style liberal-democracy with the bad old days of Yeltsin, when the economy plunged 45% in the 1991-1998 period and the 1998 crash that wiped out their savings. It was in the 1990s that the likes of Berezovsky came to the fore.

The intent of the Bush Administration to station anti-missile defences in the Czech Republic and Poland is deeply resented by the Kremlin and the Russians at large. Bush certainly knows how to bring things to a head right around the globe. 

Washington claims that the defences are directed against Iran of course. Why not then place them in Russia as Putin suggested? 

But that would be to put them under the control of Moscow to be used or not used on their decision - hardly an option whoever they are intended against.

Prague and Warsaw are of course viscerally anti-Russian and regard the defences as a sign of US commitment to them. Their countries, however, will logically now be targeted by Russia's missiles, that makes their security less, not more. All in all, the West is not showing much sense here. The sooner a new administration comes to power in the US, the better for us all.

                                           *******

Death of a flawed hero
There is no doubt that Boris Yeltsin was an exceptional man who lead an extraordinary life. He had an abundance of moral and physical courage, an elan and flair in a crisis, great daring, determination and stamina, an imposing presence and a typically Russian love of drama, if not on occasion melodrama, that could descend to bathos.

This was especially so when he was under the influence. But he shared this trait with a greater man, Winston Churchill, who several times addressed the House of Commons when the worse for wear through drink (though not in wartime). Yeltsin did not have Churchill's intellectual qualities - it is inconceivable that he could have written great books or produced the ready Churchillian flow of wit and ideas. 

Nevertheless, he joins the ranks of the giants of the twentieth century all right, indeed of history. He joins the company of Robespierre and Danton, Lenin and Trotsky, Stalin, Churchill and Roosevelt. His name of course will be forever associated with his arch-enemy, Gorbachev, who vowed to keep him out of power in Moscow, once he had resigned from the Politburo in 1987. That resignation was a gamble that came off.

The great difference between these two was that Gorbachev did not really know what he was doing, as the Soviet period came to an end. Yeltsin always did. He took gamble after gamble that came off. He had sensed the public mood better than Gorbachev, with his communism with a human face. Yeltsin resigned from the communist party altogether in 1990, positioning himself as the leader of the anti-Soviet opposition and the true leader of Russia. Nationalism would finally rout communism, he was convinced, which it duly did.

But it should always be remembered that it could only have happened because of Gorbachev, who allowed elections to the Russian parliament and presidency - and did so when he must have known who would benefit most. This showed a great largeness of spirit. In that regard history is surely going to treat the last Soviet president more kindly than his compatriots. 

The huge irony is that he was far more of a liberal and a democrat than Yeltsin, while he profoundly disliked violence. The Chechen War would have been inconceivable under Gorbachev. But he knew he was too unpopular to win an election himself, which he never risked. Nevertheless, the Westerners who thought him one of their own were not wrong. Barbara Bush was being just a little premature when she said on a visit in 1990: "Moscow is now in the Free World." If by 1991 it was, this was every bit as much due to him as to Yeltsin.

But was it?

                                       ******

Yeltsin's undeniable historical greatness is due to what he achieved heroically up to 1991. Thereafter the flaws became more evident. 

But there he was, the first properly elected leader of Russia. The freedoms that glasnost had introduced were widened, while the Duma became a proper parliament of a sovereign nation. The Baltic states were freed. All due to Yeltsin. 

It was very much an embryonic affair, but was it a fledgling Western liberal-democracy - of course a la Russe? 

Let us question this first in a wider context of what constitutes wise Western governance.

The ten commandmants of wise governance in the West
1) Always be prepared to consider an alternative point of view, as regards both ends and means. Bear in mind Churchill's dictum re the Pax Americana (and he was no anti-American): "The Americans can always be relied on to do the right thing - after exhausting all the alternatives!" 

Well, excepting when by then it is too late!

2) Be open to criticism from all quarters, even the most profane, in that regard.

3) Be wary of deliberate or unwitting destruction; for it is easier by far to destroy than create, as the Americans have discovered in Iraq. 

4) If bent on change, which may have to involve some destruction, give people time to adapt.

5) Don't harass people regardless. Let them cultivate their gardens, if legitimately acquired. 

6) Avoid the extremes as the natural habitat of fanaticism and folly - excepting when it is necessary to follow Voltaire's advice and 'fight fanaticism fanatically.'

7) Don't appease dictators (unless, it has to be said when they are enemies of the West's enemies at the time).

8) Avoid cronyism and favouritism, nearly always breached however in any kind of regime

9) Hand over to a successor who can abide by these precepts, a tall order of course 

10) Actually there is a wicked tenth precept - break any of the above rules when the exceptional occasion demands it. 

Dictators have no scruples of these kinds, obviously. Western governments heed the tenth all the time, say that of Thatcher.

How did Yeltsin's governance fare here?
He broke most of them, and handed over to someone who has broken them all. Nobody could say that Putin is a Westerner. 

Yeltsin espoused early on, as had Thatcher, the policies of shock therapy and monetarism, moreover with the same TINA-like obstinacy. Western experts themselves, Jeffrey Sacks and academic economists with little knowledge of Russia, but bristling with eternal verities, to the fore, were responsible for this disaster, that immediately unleashed rip-roaring inflation and a collapse of output, such as the UK, in milder fashion, experienced in 1979-82 (although putting three million out of work). Thatcher herself is deemed a wizard in Russia and her example was followed readily. Precepts 1) and 2), 3) and 4) were ignored - and with zest, breaching 6),

Still 5) was respected. If people managed to keep going under the onslaught, it was literally because they were able to cultivate their gardens and allotments. 

Then came the Chechen War in 1994, breaching 6), as well of course as 3). Afterwards came the crash privatisation, contravening 4), 6) and 8) as it so happens, the whole ending in the disastrous collapse of the rouble and the economy in 1998, involving the flouting of several of the above, inadvertently, but inexorably from the previous breaking of rules. 

Appeasing dictators is now the politically correct creed, after the debacle in Iraq, so flouting 7) is not too heinous, which Yeltsin did re, as it happens, Iraq, as elsewhere.

As for 8) and 9), nearly everybody breaks them so that it would be unfair to berate Yeltsin unduly here. Churchill after all gave us Eden and Thatcher Major.

Yeltsin's successor, Putin has gone the whole hog and contravened 5), the only one Yeltsin respected. At least he has done so metaphorically by revisiting the privatisation deals of the 1990s, the break-up of Yukos, the hounding of civil rights groups, etc. 

                                    ******

To sum up, Yeltsin lost his sure touch once in the Kremlin at the end of 1991. His boldness became rashness, guided by Western gurus who were militant ignoramuses that obviously had not done the elementary thing of consulting the successful Chinese model. Where the CCP proceeded cautiously and gradually, everything was done in a mad rush in Russia. 

Giant companies were not sold off in an organised manner, with proceeds going to the taxpayers, as in West Europe, rather the Harvard and Chicago advice was followed, that turned out to be very much a la Russe in application. Cronies of the inner circle acquired huge assets in secretive deals for next to nothing. Ordinary folk got a mockery of an amount in terms of vouchers, losing the fruits of their long labours. A terrible social polarisation ensued, with 95% becoming destitute as the economy halved in size. 

The Chinese are often said to have got it right by liberalising the economy before the polity. Actually that was not an option in Russia, ensconced in a command system for far longer, where reforms were always shelved in the end, whether the ideas of Professor Vargas under Khrushchev, or rather after his fall in 1964, or those of Gavril Yavlinsky's under Gorbachev. The Chinese have long been brilliant at business, whereas the Russians never were, even before 1917.

The real point to learned from China was that it had done things gradually. The Chinese consulted British and German economists, who had had experience of moving from a state-controlled to a market economy after the Second World War. They advised that price and other controls should be lifted gradually and ditto any transition to private enterprise. 

The Russians turned to US advisers, who advocated doing everything in one big bang, the results could not have been more disastrous. 'Steady-state economic reform' is far superior to 'big bang reform.'

Altogether low marks in this governance test for the latterday Yeltsin, but a "Great man in history" award for the earlier Yeltsin, as the leader of his people out of communism. 

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AVIATION & SPACE

Russia drafts space programme up to 2040


The space exploration programme for the period until 2040 will soon be submitted to President Vladimir Putin, Federal Space Agency head, Anatoly Perminov, said, Interfax News Agency reported.
"We were ordered to draft a comprehensive space exploration programme for the period until 2040 by March. We have done that. It is being coordinated in the ministries," Perminov said.
Once that is done the program will be presented to Putin. "I think that will happen in the near future," he said. He said it would be unethical to discuss details of the hitherto unapproved programme.
"I can only say that the programme for the period until 2040 stipulates the development of new spaceships, which means we will also need new rockets. The question of new launching facilities will naturally come up," Perminov said.
These things are interrelated, "and we will have to make a whole chain," he said.

Aeroflot submits bid to acquire Alitalia stake

Russia’s flagship carrier Aeroflot has submitted a bid to buy a stake in Italy's Alitalia carrier, the company's Deputy Director General, Lev Koshlyakov, said, Interfax News Agency reported.
"Aeroflot has sent a bid for a tender, which is to be accepted by the Italian finance ministry," Koshlyakov said. He confirmed that the bid had been submitted jointly with Unicredit bank.
Aeroflot said it will bid, together with Unicredit, a bank, for the state's stake in Italy's Alitalia, Sergio Ermotti, the head of the investment and banking department at the bank, said at a briefing in Milan, Bloomberg reported, cited by Interfax.
Aeroflot will have a 95 per cent stake in a consortium to be established to bid for the stake, and the Italian bank will have a five percent stake.
The Italian government owns 49.9 per cent of Alitalia and decided at the end of last year to put the shares up for sale. So far, 11 companies have applied to bid. They include Texas Pacific Group of the United States, Italy's Unicredit SpA and Management & Capitali SpA and Carlo Toto, owner of Italy's number two carrier Air One. Bidders must be prepared to buy at least 30 per cent plus one share in Alitalia.
The board of directors at Aeroflot has not discussed the acquisition of shares in Italian carrier Alitalia, two sources at the Russian flag carrier's board told Interfax.

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BANKING

Russia’s VTB aims for London listing

Shares in Vneshtorgbank (VTB), Rusisa’s second –largest bank, have gone on sale to Russians, as the business prepares for its £4bn listing in London and Moscow. The flotation, set for early in May, will be the first foreign listing by a Russian bank, The Times reported recently.
The lead managers Deutsche Bank, Goldman Sachs, Citi-group and Renaissance Capital hope that the deal will avoid the problems that have afflicted recent Russian bank share offerings. The initial public offering (IPO) of Rosbank was pulled last year. A £6bn share offering by Sberbank, the state banking monopoly, in March was generally seen as a flop.
Sberbank’s offer was criticised by analysts for being too closed to foreign investors. It did not do a roadshow, it paid the lead managers, JPMorgan and Credit Suisse, a pittance, and the bank’s chief executive, Andrei Kazmin, gave conflicting information to the market. In the end, the shares were allocated mainly to Russian oiligarchs with close links to the bank’s management, such as Suleiman Kerimov, the Daghestani tycoon, who built a big stake in Sberbank with money borrowed from Sberbank.
Even the Kremlin admits that Sberbank deal was very “unusual,” as Sergei Storchak, the Deputy Finance Minister, told The Times. Mr Storchak is confident that VTB, in which the Finance Ministry is the main shareholder, will be more popular with foreign investors.
He said: “I think it will be a very foreign-investor-friendly deal, more so than the Sberbank IPO. Knowing Andrei Kostin (VTB’s chief executive), and how global and cosmopolitan in his outlook he is, I think he will be very successful in attracting foreign investors.”
Mr Kostin, who worked at the Russian Embassy in London in the 1980s, describes himself as “an experienced fox.” The VTB chief adds: “This will be a GDR (global depository receipt) listing in London, unlike the Sberbank deal, so it will be as easy as buying shares in a British company.”
VTB is enjoying increasing dominance in Russian banking. According to its 2006 results, it made net profits of £608m, up 130 per cent. The boost is mainly from consolidation of backs that it acquired last year, including the Moscow Barodny Bank in London.
The Kremlin keen for an international banking champion, has funded some VTB acquisitions, and some analysts and investors say that the bank makes decisions for political reasons.

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ELECTRONICS

Hitachi could produce equipment for NPPs

Japan's Hitachi has not ruled out the possibility that it could produce equipment in Russia for nuclear power plants, Hitachi managing director Sedzo Saito said following talks with Russian nuclear officials. "If it's mutually advantageous economically, then such a possibility exists," he said, New Europe reported.
Russia and Japan need to conclude an intergovernmental agreement on the peaceful use of nuclear energy to develop cooperation, and this document could be signed before the end of 2007, he said.
Other potential areas of joint activities in the nuclear sphere could include the import to Japan of enriched uranium from Russia, the participation of Japanese companies in the construction of nuclear power plants in Russia and joint participation in providing equipment to nuclear power plants in third countries, he said.
Masao Nivano, senior managing vice president of Tosiba, also said Russia and Japan have good prospects for cooperation in nuclear issues. "If Japan is to develop nuclear energy and increase the share of nuclear generating in the country's energy supplies to 38 percent, we need to seriously think about fuel provisions, and Russia could be an important partner here," he said.

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ENERGY

Rusal joins Russia in nuclear project

The Russian atomic energy agency and the aluminium giant, Rusal, announced plans to build a nuclear power plant and an aluminium smelter in the country’s Far East, the International Herald Tribune reported on April 10th.
Rosatom and United Company Rusal will conduct a feasibility study by the end of the year and then establish a timetable for construction of the plant and smelter, foreseen under a joint agreement on long-term investment projects, the two said in a statement.
The project would help to meet a target set by Presidential Vladimir Putin of raising the proportion of nuclear-generated power by 2030 to at least 25 per cent, as well as helping to meet Rusal’s large electricity requirements.
The statement said that the project would be configured as a public-private partnership, enabling Rusal and Rosatom to seek government financing earmarked for infrastructure development.
“The program will provide a platform for an economic upturn across large areas of the country,” the head of Rosatom, Sergei Kiriyenko, said.
The statement did not say exactly where the two facilities would be situated.
Russia has 31 reactors at 10 nuclear power plants, accounting for about 17 per cent of the country’s electricity generation.
First Deputy Prime Minister Sergei Ivanov reiterated that the first floating nuclear power plant, to provide power for the Artic port of Severodvinsk, should go online in 2010 and said that there were plans for seven such plants along Russia’s northern and eastern coasts, the Interfax News Agency reported.
Rusal combined its assets in March with a rival, Sual, and the Swiss-based commodities trader Glencore International, creating United Company Rusal and surpassing Alcoa of the United States as the largest aluminium producer.
The company operates in 17 countries across five continenets.

E.ON, BASF, Gazprom set good cooperation example

Russian Industry and Energy Minister, Viktor Khristenko, said the work of E.ON and BASF with Gazprom sets a good example of cooperation. The Yuzhno Russkoye field was discussed during a Russian-German energy forum in Moscow on April 13th, Khristenko said. "We recalled the work of E.ON with Gazprom. I consider that to be an example of cooperation, as these relations are an example of dividing asset exchange risks in different areas of the energy chain," he said.
The asset evaluation work continues, the minister said. "The companies have set a timeframe - the first half, and I hope they will keep to it," he said, Interfax News Agency reported.
"Gazprom and E.ON signed an agreement in early July 2006 whereby the Germany company receives 25 per cent minus one share in the Russian Yuzhno-Russkoye field development project and Gazprom 50 per cent minus one share in each E.ON Foldgaz Storage and E.ON Foldgaz Trade of Hungary, and 25 per cent plus one share in E.ON Hungaria.
Several months prior to that, Gazprom signed a similar agreement with BASF AG. According to the agreement, Gazprom increases its stake in Russian-German joint venture WINGAS to 50 per cent minus one share. Gazprom also receives a stake in one of the Wintershall AG (BASF subsidiary) companies, managing shares in geological exploration and production assets in Libya. BASF/Wintershall receives 25 per cent minus one share and 10 per cent non-voting shares in Severneftegazprom (the company developing the Yuzhno-Russkoye gas and oil field). In addition, Gazprom and BASF will set up the joint venture WINGAS Europe on a 50:50 basis to trade natural gas in European countries.

Doha gas forum fails to produce cartel deal

Representatives of gas exporting countries meeting in Qatar on April 9th failed to agree a cartel deal, Russian Industry and Energy Minister, Viktor Khristenko, said, Interfax News Agency reported.
Asked whether the group signalled the beginning of a gas cartel's formation, Khristenko said: "This (the group) is a place that ensures the realisation of decisions for those who are capable of making them. In this case, it's up to the ministers to decide. No decisions requiring a cartel agreement were made at the forum," Interfax News Agency quoted him as saying.
The group's membership is yet to be determined and "proposals from corresponding ministries of the forum's participants are yet to follow," the Russian minister said.
In Khristenko's opinion, the group's members should be not lower in rank than deputy minister or department head. The group will convene at least six times in 2007, he said.
Khristenko told reporters Russia could host the next forum of international gas exporters.
Meanwhile, a source on the Russian delegation to the forum of gas exporting countries in Qatar said the unification of gas exporting countries is inevitable in a globalising market. "Some organisation must appear given that the market is globalising," Interfax News Agency quoted the source as telling journalists on April 9th.
The formation of such an organisation should begin with pricing, he said. "It does not matter who initiates the formation of the cartel. Russia could play a leading if not dominating role in the process (of market studies, possible unification)," the source said.
The delegation member said that an understandable and transparent mechanism of pricing that would suit both producers and consumers of natural gas is necessary today.
South American countries and Iran support the idea of a gas cartel. Argentina, Bolivia and Venezuela already have a gas cartel, Bolivian Minister of Hydrocarbons Carlos Quiroga said. "It is called the Organisation of Gas Exporting and Producing Countries in South America and regulates gas prices," he said. A similar organisation should be formed on a global scale, the minister said.
A gas cartel needs to be formed first, and then its possible regulation of gas prices discussed, Iranian Petroleum Minister Kazem Vaziri-Hamaneh said. "We have heard that Russia is interested in forming 'a gas OPEC.' The issue needs to be discussed," he said.
Assessing the forum, EU Energy Commissioner Andris Piebalgs said he has taken note of the decisions taken during the forum aiming to further examine such issues as the gas forum’s performance, future developments and gas pricing. 
The Commissioner in a statement issued on April 10th in Brussels said he "will follow very closely" the activities in this framework and will further discuss the forum’s decisions in the framework of the existing bilateral energy dialogues. He stressed the importance of continuing dialogue between energy consuming, producing and transit countries aiming to ensure stability, predictability and transparency in the global energy market. 
Russia’s deputy chairman of the Russian State Duma committee for energy, transportation and communications, Sergei Shishkaryov, said the forum has generated good prospects for cooperation not only in gas pricing, but also in developing new technologies to produce and transport gas.
"Gas exporters have no fewer reasons to protect their interests than their 'oil colleagues,'" the MP said on April 10th commenting on results of the sixth meeting of the forum.
"Studies of price formation is the first stage of cooperation at a new level within the framework of the forum," he said. "Good prospects for cooperation on the development of new technologies to produce, liquefy and transport natural gas, as well as the establishment of a transparent market, can be seen," he said.

Rosneft, BP to start drilling Sakhalin IV wells

Russian oil company Rosneft and British Petroleum are to start drilling the first two wildcat wells at the West Shmidtovsky section of the Sakhalin IV project in June 2007, Alexander Kalschikov, director of the well construction department at Sakhalin projects, which manages Rosneft's Far East licenses, said, Interfax News Agency reported.
It is planned to drill at well at the Medved (depth – three kilometres) and Toiskaya (depth 3.6 kilometres) sections. The sea depth in this area is over 100 metres and the drilling site is 50-60 kilometres from shore, north of Sakhalin in Russia's economic zone.
Kalschikov also said Rosneft and BP have submitted projects for drilling wildcat wells in 2008 at the East Shmidtovsky section of the Sakhalin V project, at public hearings. Hearings were held last week in Yuzhno-Sakhalinsk, in Okha and in the village of Nekrasovka in Okha district. He said Dalmorneftegeofizika also carried out 3D seismic exploration work at the East Shmidtovsky section in 2005-2006, and that in 2008-2009 drilling of wells is planned at the Lisa, Glenskaya and Kuegda sections.
Ecological monitoring will be carried out as part of the project - both local and production. The well drilling plans were prepared by NPO Burovaya Tekhnika and SakhalinNIPImorneft, and for the ecological part of the project - by REA-Consulting and Frekom. Based on information from the first wells drilled a decision will be reached on the need to drill additional wells.
Drilling will be carried out from the Legend drilling rig. "This drilling rig has been working for us for three years already, and we have signed a new contract with Transocean for 2008," he said. Rosneft is also carrying out geological exploration at the section jointly with BP.
Kalschikov also said that this year no exploration wells would be drilled at the Kaigansko-Vasyukansky section at Sakhalin V.
Drilling work at the Veninsky section of the Sakhalin III project has been put back to 2008. "Due to the fact that the programme of geological exploration work was changed, exploration drilling at the north-Veninsky structure of the Veninsky block is planned for 2008," Kalschikov said. Information received from the drilling of wells at the South-Aiyashsky structure in 2006 will be reinterpreted this year and additional 3D seismic exploration work will be carried out. "As the license for the project ends in 2008, we have asked the natural resource ministry to extend the license to 2010," Kalschikov said.

Voith Siemens to supply equipment for Uglich plant

HydroOGK and Germany's Voith Siemens Hydro Power Generation signed a contract on April 2nd on equipment supplies for Uglich Hydro Power Plant.
Voith Siemens will over the next 30 months dismantle hydraulic unit No. 2 at the hydro power plant and supply new equipment to install and launch a new unit.
The contract is worth over 1.15 billion roubles, or 33.2 million Euro. The new hydraulic unit will have 70 megawatt capacity, five megawatts more than the existing unit, HydroOGK reported.
Uglich Hydro Power Plant was launched in 1940 and it is one of the oldest hydro power plants in the Volga-Kama cascade. It has 110 megawatt capacity. A hydraulic unit is being replaced at the plant for the first time.
HydroOGK plans by 2011 include replacement of over 20 hydraulic units, 40 hydraulic turbines and 45 power unit transformers. The company plans to spend 45.8 billion roubles and increase capacity by 199 megawatts.

Atomenergomash, Alstom setting up joint venture

Russia's Atomenergomash and France's Alstom have agreed to set up a joint venture to manufacture steam turbines for Russian nuclear power plants. The joint venture will be based in Russia, and the Russian company will have a 51 per cent stake in it, the Federal Atomic Energy Agency said, New Europe reported.
Atomenergomash CEO Kirill Komarov and Alstom Chairman Patrick Kron signed the accord on April 2nd, the agency said.
The joint venture will be based on the premises of the ZIO-Podolsk machine building plant. The investment may amount to 300 million euro. The agreement stipulates that Alstom will transfer the production technology for Arabelle half-speed turbines and generators.
Atomenergomash will provide a workshop of 60,000 square metres. "The partners will offer turbine islands for nuclear power plants," the press release said.
Half-speed turbines produced by the joint venture will be installed in nuclear power plants under construction in Russia and abroad. It will do away with the deficit of modern half-speed turbines in Russia.
"The new company will have a charter capital of about 100 million Euro," Komarov told a press briefing in Moscow.

Chevron to finance Gazprom Neft exploration

Chevron is to finance additional exploration at four sections belonging to Russia's Gazprom Neft, within the framework of the joint venture North Taiga Neftegaz, Interfax News Agency reported.
According to the Gazprom corporate newspaper, this involves licenses belonging to Gazprom Neft, and also to its subsidiaries Noyabrskneftegaz and Meretoyakhaneftegaz. Gazprom Neft did not specify the names of these fields to Interfax.
Gazprom Neft and its two subsidiaries have a total of 30 licenses in Yamalo-Nenets autonomous district, including three for geological exploration (for the Vorgensky and Aikhettinsky sections, belonging to Gazprom Neft, and for the Karasevsko-Tanlovsky section - belonging to Meretoyakhaneftegaz) and also 15 prospecting, exploration and production licenses and 12 licenses for exploring and production.
The corporate magazine states that the contractor - Obneftegazgeologia - already started drilling at the first section in December 2006, together with Gazprom Neft and Chevron. In the coming months a decision will be reached on the full-scale development of this section, where reserves may "vary from zero to hundreds of millions of tonnes of oil."
The next object to receive attention will be a neighbouring section where two small fields have already been discovered. "Explored ABC1 oil reserves at the second section are not large: not more than 10 million tonnes," the magazine said.
Agreement of a production plan to carry out additional geological exportation work at another area of the second section is currently being finalized.
According to the article, the sides propose to sign several more agreements regarding the management and financing of North Taiga Neftegaz, when the joint venture will be completely set up.
At the moment Gazprom Neft has a 30 per cent stake in the venture. The financing mechanism for the venture stipulates a change in the ownership stakes another two times, as a result of which Gazprom Neft will receive 51 per cent in the venture, and Chevron will have 49 per cent.
"This will only take place after two Gazprom Neft licenses are transferred to the balance sheet of North Taiga Neftegaz together with the corresponding property, which is planned for 2007. Chevron is paying for its stake in the venture with the equivalent cash contribution," the magazine said.
The two other licenses will not definitely become part of the North Taiga Neftegaz project, although the partners do not plan to ignore them.
If a balance of interests is found, it is possible that joint projects between the Russian and US company will not be restricted to North Taiga Neftegaz, and may spread outside Russia, the article said.

Stroytransgaz, Saudi Aramco to build pipeline

The top managers of Russian company Stroytransgaz and the Saudi state oil company Saudi Aramco signed a contract to build an oil pipeline from Sheiba to Abkaik in the Eastern province of Saudi Arabia on March 31st, New Europe reported.
Stroytransgaz said in a statement that the contract was signed by its First Vice President Yevgeny Lavrentyev and Saudi Aramco Vice President Ali al Adjmi.
The ceremony took place at the company's headquarters in Dhahran.
Under the contract, which is estimated at over US$100 million, Stroytransgaz is supposed to build a 217-kilometre-long pipeline from the Sheiba oilfield near the border with the United Arab Emirates to the major oil-processing centre of Abkaik in 18 months. The new branch will be laid parallel to an already existing pipeline, which would make it possible to increase the volume of oil transportation. Construction is to begin in mid-2007.

Tatneft, Libya`s NOC sign hydrocarbons contracts

Tatarstan-based oil producer Tatneft and National Oil Company of Libya (NOC) recently signed contracts for the exploration and development of hydrocarbons at three properties in Libya, Tatneft said, Interfax News Agency reported.
Tatneft had won tenders for the three properties, which include seven prospects with a total area of more than 16,000 square kilometres. Tatneft already operates at the No. 82-4 prospect in Libya under a contract signed in December 2005. Safagat Takhautdinov, Tatneft's director general, has said the company might start drilling a first well at the prospect in 2007.

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FOREIGN COOPERATION

Kazakstan sees Russia as strategic partner

Kazak President, Nursultan Nazarbayev, said that command of the Russian language is a valuable asset, since Russia remains Kazakstan's strategic partner. "We reject politicking and empty rhetoric. We can clearly see that Russia will remain our strategic partner for many years ahead," Interfax quoted Nazarbayev as telling members of the scientific community at his residence in Astana on March 27th.
"We have one language after all. Some intellectuals object to the Russian language being used so broadly. I think it is an enormous asset that Kazaks speak Russian so brilliantly - even better than Russians do," he said. "We are partners bound by history. I hope Russia sees Kazakstan in the same way," Nazarbayev said.

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