Books on Russia
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.
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
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
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
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
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
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
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
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.
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
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
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
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
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
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
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
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
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.
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
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
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
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
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 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
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
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
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.