Books on Russia
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
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
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
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
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
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
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
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
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
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
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
9) Hand over to a successor who can abide by these precepts, a tall order of
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.
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
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
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.
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.
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,"
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
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
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
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
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
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
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
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
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
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.
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.