Russia 090324

Basic Political Developments Karzai Seeks Russia Help to Stay Afghan Leader, Kommersant Says Coalition forces in Afghanistan should fight drug trafficking – Russian drug

service head India, Iran and Russia mull co-op against Taliban Chinese central bank backs Russian idea for new reserve currency Pravda: China to cooperate with Russia against U.S. dollar TVEL signs protocol with India’s NFC on nuclear fuel pellets acceptance U.S. senator seeks missile cooperation with Russia Turkmenistan leader Gurbanguly Berdymukhamedov to visit Moscow on March

24-25 Russia, Turkmenistan to discuss cooperation in fuel and energy sector -

Cooperation in the fuel and energy sector, including the construction of the Caspian gas pipeline, will be among priority issues to be discussed by Russian President Dmitry Medvedev and Turkmen President Gurbanguly Berdymukhamedov on Wednesday.

Ms Tymoshenko to meet Mr Putin on natural gas issues - According to a source at the government that the meeting between the two is tentatively scheduled on April 8th

MT: Putin Wary of Ukrainian Gas Deal RBC: EU-Ukraine gas deal angers Russia FT: Moscow irked at Kiev’s EU overture Russia wants up to 10 submarines in Black Sea Fleet Singapore promising partner for Russia – Lavrov Singapore: Minister for Foreign Affairs George Yeo visits Russia Russian Minister of Foreign Affairs Sergey Lavrov Meets with the Vatican’s

Secretary for Relations with States Dominique Mamberti Norwegian Foreign Minister Jonas Gahr Støre to Moscow Norway Visit to Talk Telenor Telenor’s legal battle is damaging - From what we can tell, this issue is indeed

damaging the image of Russia as a recipient of foreign investment, a Norwegian Foreign Ministry spokesman says the day before Støre and Lavrov meets in Moscow.

Russian MFA Spokesman Andrei Nesterenko Interview with RIA Novosti on the Upcoming Visit to Russia of Norway’s Minister of Foreign Affairs, Jonas Gahr Store

Russia to strengthen strategic nuclear subs Russian subs to delineate Arctic shelf Arctic Cossacks to protect Murmansk border Talk of 'Russian bear' a lot of hot air, Moscow says - A senior Russian diplomat

chided Canada yesterday for criticizing his country's military training flights in the Arctic, accusing Ottawa of overreacting and reviving Cold War political rhetoric.

Russia's economy minister heading for Moldova

Russia, Transnistria to ink economic cooperation pact Transdnestr considers integration into Russia - Relations between Transdnestr and

Russia have experienced somewhat of a renaissance, Smirnov said. Moscow is actually guaranteeing the political and economic viability of the republic where every third adult is a Russian national.

Medvedev to hold security strategy meeting - Russian President Dmitry Medvedev will hold a meeting with the national Security Council on Tuesday to approve a national security strategy up to 2020.

RF Security Council to adopt nat'l strategy for period till '20 Medvedev Orders Russian Grain Company Creation to Boost Exports Medvedev Creates State Firm For Grain Market Purchases Murmansk: New governor to be sworn in on Wednesday - The United Russia

party in Murmansk yesterday approved Mr. Dmitriyenko as new governor Katanandov also on black-list - Head of the Republic of Karelia, Sergei

Katanandov, is said to be on the list of governors expected to be ousted. Medvedev Says Sochi Games Will Be Funded Kremlin critic in ammonia attack - Boris Nemtsov said he was attacked by three

men outside his campaign HQ. He apparently suffered no lasting harm. Russian police arrest Tajik heroin traffickers Chechens in Turkey fear Russian intelligence death squad team French intelligence to help Turkish secret services to investigate Russian hitmen

murders  Russian secret services linked to cyber-attacks against Georgia Trial of Georgian-Armenians accused of spying for Russia to take place in near

future Transformation of Russia’s GRU brigades to be continued, officers leaving for

new place of service Two bombs go off in Makhachkala Russian who says he spied on opposition denied asylum in Finland

National Economic Trends Budget to receive $18bn from Reserve Fund in March Finance minister foresees more bad debt problems Russia finds itself in active stage of crisis – Nabiullina Russian ministers oppose tax increases on business (Part 3) Economy expected to revive in Q4 Micex to float Bank of Russia's bonds Ruble rise checked by Central Bank - The ruble’s attempts to extend gains against

the euro/dollar basket proved futile Crop Sowings Up 2% - Russian winter crop sowings are 2 percent higher than a

year ago, at 17.2 million hectares (42.5 million acres), the Agriculture Ministry said Monday.

State Promises $120Bln In Orders - The state will place orders worth 4 trillion rubles ($120 billion) with domestic companies this year as it seeks to boost the crisis-hit economy, a deputy economic development minister said Monday.

Business, Energy or Environmental regulations or discussions Acron, Norilsk Nickel, Polyus, Rosneft: Russian Equity Preview ‘Take Profits’ in Russian Stocks When RTS Nears 800, ING Says New List of Preferred Firms - The Industry and Trade Ministry has approved a list

of 600 companies that may be eligible to receive state funds during the economic decline, minister Viktor Khristenko told Itogi magazine in an interview published Monday.

Sanderson to appeal Russian ban of chicken plant Russia's richest man proposes rescue plan for RBC - Billionaire Mikhail

Prokhorov, Russia's richest man, has offered to bail out indebted financial news provider RBC, investment bank Renaissance Capital said on Monday, boosting the media firm's stock over 30 percent.

Telenor’s Motion to Stop $1.7 Billion Ruling Rejected by Court Telenor says stay motion rejected by Russian court Norilsk Tumbles Most in a Month After Report of Russian Inquiry Russian authorities to scrutinize Norilsk Nickel deals - paper Renault may block additional issue of AvtoVAZ shares Aeroflot stakeholder will fight removal of CEO

Activity in the Oil and Gas sector (including regulatory) Belarus Seeks to Slash First-Quarter Gas Price, Kommersant Says - Belarus is in

talks with Russia’s natural-gas export monopoly OAO Gazprom to cut the price it pays for the fuel in the first quarter by 30 percent to $148 per 1,000 cubic meters, Kommersant reported.

International consortium will not operate Ukraine's gas transport system-official

Gazprom Gazprom loses powerful European lobby - The resignation of Hungarian Prime

Minister Ferenc Gyurcsany, which is due to be announced today, came as an unpleasant surprise for Moscow. Of all the European politicians, Gyurcsany was one of the most active advocates of the South Stream pipeline project.

Gazprom to eliminate threat of rival EU suppliers - Following a mid-March meeting, Russian Energy Minister Sergei Shmatko and Iranian Oil Minister Gholam Hossein Nozari signed a hydrocarbon memorandum that allows swap operations to Gazprom, which will deliver Turkmen gas purchased by Russia at a premium price to northern Iran in exchange for gas deliveries from southern Iran to Gulf countries.

Ukraine gas pipeline modernization could cost $16 bln – Gazprom Negotiations between Bulgaria and Gazprom are under way - Bulgarian Minister

of Economy and Energy Petar Dimitrov considered in Moscow with Gazprom representatives the tenor of new documents for natural gas delivery.

Financial crisis takes Gazprom off the boil - If the term 'cooking with gas' could be applied to any country's economy, it would be Russia's. During the eight years of Vladimir Putin's presidency, Russia became the world's largest natural gas producer and exporter. Taking the lead was Gazprom, Russia's state-controlled energy giant. But the financial crisis has taken Gazprom off the boil, prompting some analysts to question the influence of the state on the company.

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Full Text Articles

Basic Political Developments

Karzai Seeks Russia Help to Stay Afghan Leader, Kommersant Says

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQjhIp7giPwo

By Denis Maternovsky

March 24 (Bloomberg) -- Afghan President Hamid Karzai is seeking Russian support to stay in power because the U.S. wants him replaced, Kommersant reported, without citing anyone.

Russian Foreign Minister Sergei Lavrov visited Kabul last week and spoke against foreign interference in the presidential elections that are scheduled for August, the Moscow-based newspaper reported today.

Afghan Foreign Minister Rangin Dadfar Spanta is due in Moscow on March 27 for a meeting of the Shanghai Cooperation Organization, a military alliance set up by China and Russia in 2001 to counter U.S. influence in energy-rich central Asia, Kommersant reported.

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

Last Updated: March 24, 2009 01:45 EDT

Coalition forces in Afghanistan should fight drug trafficking – Russian drug service headhttp://www.interfax.com/3/481411/news.aspx

MOSCOW. March 24 (Interfax) - The issue of the continued deploymentof coalition forces in Afghanistan should be contingent on their dutiesand competence in destroying drug crops and drug laboratories, RussianFederal Drug Control Service Chairman Viktor Ivanov said at the meetingof the heads of anti-drug agencies of the Collective Security TreatyOrganization (CSTO) countries in Moscow on Tuesday. "Raw opium production has increased more than forty times since theintroduction of the U.S and NATO troops" in Afghanistan, said Ivanov. Over the past 7-8 years, Afghanistan has turned into a countrywhere "93% of the world's opium poppy crops are located," he said. The growth of drugs trafficking and tension is connected to "the

increasing concentration of foreign troops" in the country, he said. "We predict an aggravation of the drug situation in the northernprovinces of Afghanistan due to the plans to integrate the Taliban inthe Afghan authorities," said Ivanov. The efforts the international community has made to fight drugtrafficking in Afghanistan "have been a fiasco," Ivanov said. "The half-measures taken by the international community will notyield results in 100 years, and the hardest hit will be Central Asia andRussia," Ivanov said. Ivanov also proposed to reconsider the procedures for giving donorassistance to the Afghan authorities. There is a need to create aninternational observer council to monitor the assistance provided by theinternational community to Afghanistan, he said.

India, Iran and Russia mull co-op against Talibanhttp://news.xinhuanet.com/english/2009-03/24/content_11063356.htm

2009-03-24 12:45:07

NEW DELHI, March 24 (Xinhua) -- India, Iran and Russia are considering cooperative actions to contain the rising influence of the Taliban in Afghanistan, reported the local daily The Times of India on Tuesday.

    The three countries will discuss this issue during the Shanghai Cooperation Organization (SCO) ministerial meeting on Afghanistan to be held in Moscow on March 27, said the newspaper quoting unnamed sources here.

    The newspaper also said the three countries are concerned that the deteriorating situation in Afghanistan is giving Taliban and other militant groups "a growing space" in Afghanistan.

    They are also worried about the perspective of the United States and Pakistan arranging the coming to power of some "moderate" Taliban forces in Afghanistan, so that the U.S-led NATO can work out an "exit strategy" to pull out of the country, said the report.

    Both Iran and India will attend the SCO meeting as observers in Russia, the current rotating chair of the six-member organization.     

Chinese central bank backs Russian idea for new reserve currencyhttp://en.rian.ru/business/20090324/120703288.html

BEIJING, March 24 (RIA Novosti) - The chairman of the People's Bank of China has spoken out in support of Russia's proposal to create a new global reserve currency as an alternative to the U.S. dollar, Xinhua news agency reported on Tuesday.

Zhou Xiaochuan wrote in an essay posted on the bank's website that the goal of the international monetary system is to "create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies."

Russia earlier submitted a proposal to the G20 summit that could see the IMF examining possibilities for creating a supra-national reserve currency, as well as forcing national banks and international financial institutions to diversify their foreign currency reserves.

"We believe it is necessary to consider the IMF's role in this process and also define the possibility and the need to adopt measures allowing for Special Drawing Rights (SDRs) to become an internationally recognized super-reserve currency," Russia's proposal read.

Hu Xiaolian, a vice governor of the People's Bank of China, said on Monday that China was ready to discuss Russia's proposal of a new global reserve currency at the G20 summit. During the event, Chinese President Hu Jintao will meet Russian President Dmitry Medvedev and U.S. President Barack Obama.

The G20 summit, involving developed and emerging economies and international financial institutions, will be held in London on April 2 with the aim of finding ways to overcome the ongoing global financial crisis.

China to cooperate with Russia against U.S. dollarhttp://english.pravda.ru/world/asia/24-03-2009/107287-China_Russia_dollar-0

24.03.2009

China supported Russia’s initiative to develop a new global reserve currency as an alternative to the U.S. dollar saying that such a move is necessary in today’s world. Moreover China is ready to discuss this issue at the G20 summit in London, a vice governor of the country's Central Bank said on Monday.

On the one hand Russia should be glad to have such a strong ally; on the other hand there likely will be no actions from the Chinese side because today China holds about $2 trillion in foreign exchange reserves.

"We believe it is necessary to consider the IMF's role in this process and also define the possibility and the need to adopt measures allowing for Special Drawing Rights (SDRs) to become an internationally recognized super-reserve currency," Russia's proposal read.

Hu Xiaolian said that China, which holds about $2 trillion in foreign exchange reserves, was prepared to debate the issue as "the dollar's dominance and U.S. economic woes could entail considerable currency fluctuations and affect the world financial situation."

At the same time, she said that discussion into a new global currency could be started but considering the dollar's status as the current primary currency, "we should focus more on enhancing control over the existing system."

The G20 summit, involving advanced and emerging economies and international financial institutions, will be held in London on April 2, aimed at finding ways to overcome the ongoing global financial crisis, RIA-Novosti reports.

On March 13, China’s prime minister, Wen Jiabao, said he was concerned about the safety of those assets, particularly because huge economic stimulus plans could lead to soaring deficits in the United States, which could sink the dollar’s value.

Should China lose its appetite for Treasuries, the United States’ borrowing costs could rise, making it more costly for Washington to carry out economic stimulus packages and for Americans to pay off their mortgages, nytimes.com reports.

Nicholas Lardy, an economist and China specialist at the Peterson Institute in Washington, said that through its proposal, China was indicating that the dollar’s long dominance was unfair, allowing the United States to run huge deficits by borrowing from abroad, and that the risks to holders of Treasuries were growing.

TVEL signs protocol with India’s NFC on nuclear fuel pellets acceptance

http://www.itar-tass.com/eng/level2.html?NewsID=13710570

MOSCOW, March 24 (Itar-Tass) - Representatives of the Indian company NFC have conducted an inspection of the Mashinostroitelny Zavod (Machine Building Plant) enterprise that is part of the TVEL Company and signed protocols confirming the acceptance of the first batch of uranium dioxide fuel pellets - 30 tonnes.

Atomenegroprom holding reported that the Indian working group’s visit to the enterprise was paid in the fulfilment of a long-term contract on the supply of fuel pellets for nuclear power plants of India that was concluded on February 11, 209 between TVEL and Indian government’s atomic energy department. The Russian company has become the first to sign a long-term contract on nuclear fuel supply to India after the Nuclear Suppliers Group (NSG) on September 6, 2008 lifted restrictions on the supply of uranium, reactors and technologies to India. The total cost of the contracts is more than 700 million US dollars.

The first supply of nuclear fuel to the Hyderabad plant in India will be made in spring 2009. The fuel pellets produced in Elektrostal will be used in Indian nuclear reactors. TVEL also produces and supplies fuel for the Indian Kudankulam NPP that is being built jointly by Russian and Indian specialists.

U.S. senator seeks missile cooperation with Russia http://en.rian.ru/world/20090324/120703816.html

MOSCOW, March 24 (RIA Novosti) - The chairman of the U.S. Senate Armed Services Committee has said the country must seek close missile defense cooperation with Russia as the best means of protection against Iran.

Missile defense has so far been a major obstacle in Russia-U.S. relations, due to U.S. plans to deploy a missile shield in Central Europe, purportedly to defend against Iranian long-range missiles.

Sen. Carl Levin told a missile defense conference on Monday that the United States and Russia should work jointly to weaken the Iranian missile threat.

"U.S.-Russian cooperation on missile defense against Iranian missiles - even if we were simply to begin serious discussions on the subject - would send a powerful signal to Iran," he said. "Iran would face in a dramatic way a growing unity against her pursuit of dangerous nuclear technology."

Russia has consistently rejected the U.S. justification for the anti-missile radar and interceptors planned for the Czech Republic and Poland, and views them as a major national security threat.

However, Levin said that with cooperation the divisive issue could actually improve the atmosphere between Washington and Moscow.

"Missile defense could become a tool for positive change, rather than an impediment to better relations," he said.

At the same conference, Democratic Rep. Ellen Tauscher, a likely candidate for a top nonproliferation post in the administration of President Barack Obama, questioned the need for the missile shield.

"The argument that the U.S. would be naked against an Iranian threat unless we deploy the GMD [Ground-Based Midcourse Defense] system in Europe is simply not right," she said.

Last week Russia welcomed the Czech Republic's decision to put off a parliamentary vote on the ratification of a deal to host a U.S. anti-missile radar.

Turkmenistan leader Gurbanguly Berdymukhamedov to visit Moscow on March 24-25

http://www.itar-tass.com/eng/level2.html?NewsID=13707413&PageNum=0

MOSCOW, March 23 (Itar-Tass) - A package of important documents, specifically, on the transport sector, are planned to be signed during the coming visit to Moscow of Turkmen President Gurbanguly Berdymukhamedov on March 24-25, Palvan Taganov, President of the Turkmen Chamber of Commerce and Industry, said in his report at the Russian-Turkmen economic forum here on Monday.

“A package of important intergovernmental and interdepartmental agreements are expected to be signed, specifically, on the transport sector, on the mutual protection of investments and on the organisation of the direct railway-ferry communication between the ports of the two countries, situated on the Caspian Sea coast,” he said. According to Taganov, “trade turnover between Russia and Turkmenistan amounted to seven billion dollars in 2008 – 42 per cent up against the 2007 figure.” “Now the two countries are developing real cooperation in diversifying mutual deliveries. Russia shows the growing interest in purchasing Turkmen farm produce, textiles, light industry products, chemicals and other goods. Turkmenistan is actively developing cooperation with individual Russian regions,” he said.

Commenting on the implementation of projects in the transport sphere, Taganov stressed that “the agreement on the building of a railway line connecting St.Petersburg and Persian Gulf Countries will make it possible to transport in the future up to 16 million tons of various cargoes a year. “This provides for the building of railway lines connecting Kazakhstan, Turkmenistan and Iran,” he added.

Taganov reminded that the training and maintenance centre of the Russian KAMAZ automobile works, opened in Turkmenistan in 2008, was effectively functioning in that country. “Turkmenistan initiated the holding of a rally by the territory of Turkmenistan, Kazakhstan and Russia in September, this year,” he said in this connection.

Russia, Turkmenistan to discuss cooperation in fuel and energy sector

http://www.itar-tass.com/eng/level2.html?NewsID=13709811&PageNum=0

MOSCOW, March 23 (Itar-Tass) -- Cooperation in the fuel and energy sector, including the construction of the Caspian gas pipeline, will be among priority issues to be discussed by Russian President Dmitry Medvedev and Turkmen President Gurbanguly Berdymukhamedov on Wednesday.

“Cooperation in the fuel and energy sector, including the implementation of the inter-governmental agreement on the construction of the Caspian gas pipeline, and the development of gas transportation capacities in Central Asia will be discussed separately,” a Kremlin official told Itar-Tass ahead of Berdymukhamedov’s visit to begin on Tuesday.

“The heads of state will consider prospects for boosting cooperation in the fields of power generation, agriculture, transport, telecommunications, as well as industrial cooperation and supply of machinery in light of the fact that major Russian companies, such as Gazprom, Russian railways, Lukoil, KAMAZ, Itera, Stroitransgaz, SoyuzNefteGaz, TEOTEK, and others, have established firm positions on the Turkmenistani market,” the official said.

Medvedev and Berdymukhamedov also plan to discuss ways to “intensify cooperation between businesses of the two countries at the inter-regional level, and discuss the experience of Tatarstan, St. Petersburg, the Astrakhan and Chelyabinsk regions in establishing contacts with Turkmenistani partners,” the official said.

The talks will also focus on broader trade and economic cooperation. Russia is first among Turkmenistan’s trade partners. In 2008, it accounted for almost 40 percent of Turkmenistan’s foreign trade.

“An important task at this stage is to increase and diversify trade turnover, which had amounted to 910,2 million U.S. dollar last year, excluding gas, which is twice as much as in 2007,” the official said.

Russian exports are dominated by machinery, equipment and vehicles, chemicals, metals, food and agricultural produce. Import consists mainly of chemicals, textile, and mineral products.

“The agenda of the talks also includes broader humanitarian cooperation, primarily in the fields of culture, sport, education and personnel training,” the official said.

A package of important documents, including those regarding the transport sector, will be signed during the visit, Palvan Taganov, President of the Turkmenistani Chamber of Commerce and Industry, said earlier.

“A package of important intergovernmental and interdepartmental agreements is expected to be signed, specifically, on the transport sector, on the mutual protection of investments and on the organisation of direct railway ferry service between the ports of the two countries, situated on the Caspian Sea coast,” he said.

According to Taganov, “Trade turnover between Russia and Turkmenistan amounted to seven billion dollars in 2008 or 42 percent up from 2007.”

“Now the two countries are developing real cooperation in diversifying mutual deliveries. Russia shows growing interest in purchasing Turkmenistani farm produce, textiles, light industry products, chemicals and other goods. Turkmenistan is actively developing cooperation with individual Russian regions,” he said.

Commenting on the implementation of transport projects, Taganov stressed, “The agreement on the construction of a railway line between St. Petersburg and Persian Gulf

countries will make it possible to transport up to 16 million tonnes of various cargoes a year in the future.

“This provides for building railway lines connecting Kazakhstan, Turkmenistan and Iran,” he added.

Taganov reminded that the training and maintenance centre of the Russian KAMAZ automobile plant, opened in Turkmenistan in 2008, was effectively functioning in that country.

The foreign affairs agenda of the talks will include situation in Afghanistan.

“Special attention will be given to the situation in Afghanistan and interaction within the CIS and the Caspian Five,” the Kremlin official said.

“Given close positions of the two countries on key international problems, the exchange of views will continue on how to coordinate the activities of Russia and Turkmenistan at the global and regional levels on such pressing issues as the fight against international terrorism, illegal drug trafficking, and transnational organised crime,” the official said.

Medvedev and Berdymukhamedov will sign a joint statement on Wednesday.

The statement will reflect the results of top-level negotiations on the whole range of bilateral relations and interaction in the international arena.

“An impressive package of documents is being prepared for signing, including inter-governmental agreements on the encouragement and protection of investments, on railway ferry service through the ports of the Astrakhan transport hub, ion the mutual recognition of diplomas, as well as inter-agency documents on cooperation between the ministries of the interior and agriculture, and the prosecutor’s general offices,” the Kremlin official said.

Berdymukhamedov made two working visits to Russia last year, to Moscow in February and to St. Petersburg in June. This time he will come on a state visit from March 24 to March 25.

Ms Tymoshenko to meet Mr Putin on natural gas issues http://steelguru.com/news/index/2009/03/24/ODczMjc%3D/Ms_Tymoshenko_to_meet_Mr_Putin_on_natural_gas_issues.html

Tuesday, 24 Mar 2009

Ukrainian Journal reported that Ms Yulia Tymoshenko Prime Minister of Ukraine will visit Moscow within the next three weeks for talks with her Russian counterpart Mr

Vladimir Putin on a range of issues, including natural gas supplies.

According to a source at the government that the meeting between the two is tentatively scheduled on April 8th

This will be the first meeting between Ms Tymoshenko and Mr Putin since the two had negotiated in Moscow a natural gas agreement on January 19th that had ended a severe natural gas dispute between Ukraine and Russia.

Putin Wary of Ukrainian Gas Dealhttp://www.themoscowtimes.com/article/600/42/375592.htm

24 March 2009

Combined Reports

Prime Minister Vladimir Putin threatened to review ties with the European Union over gas supplies should Russian interests be ignored and called a plan presented by Kiev on Monday "ill-considered and unprofessional."

Ukraine presented an investment conference with the plan to spend 2.5 billion euros ($3.41 billion) through 2015 to boost the capacity of its Soviet-era gas pipelines from 140 billion cubic meters each year by a further 60 bcm and called for help from European investors.

The country's 1,100 kilometers of pipes transport an average of 120 billion cubic meters of gas a year from Russia to the EU, which consumed 517 billion cubic meters of the fuel last year.

Ukraine, the EU executive and three international banks signed a pledge of cooperation, aimed at encouraging investment and averting a repeat of this winter's gas crisis, which was caused by a price row between Kiev and Moscow.

"We cannot allow our citizens to experience fuel shortages in the depths of winter again," said Benita Ferrero-Waldner, EU commissioner for external relations.

"It seems to me the document about which we are talking is, at a minimum, ill-considered and unprofessional because to discuss such issues without the basic supplier is simply not serious," Putin said in the Black Sea resort of Sochi.

"If the interests of Russia are ignored, then we will have to start re-examining the principles of relations with our partners," he said. "There's no point in deciding the problem of increasing supplies of our gas without us."

Energy Minister Sergei Shmatko, speaking at the conference in Brussels, said the declaration touched on more sensitive issues than just gas.

"It goes far beyond modernization of the Ukraine transit system and talks of the integration of Ukraine into the legal sphere of European system as far as energy," he told reporters.

"The declaration sets up some agreed principles between Ukraine and the EU about changing the whole system of economic relations in the gas sphere," he added. "This is the thing that directly affects the interests of the Russian Federation."

Ukrainian Prime Minister Yulia Tymoshenko described the proposal to modernize the network as a cheaper way of increasing EU gas imports than building pipelines such as Nabucco.

Ukrainian President Viktor Yushchenko said Ukraine's first investment priority was to replace out-of-date facilities, followed by the introduction of a high-precision metering system.

The joint declaration said Ukraine would ensure that the gas network operator would become a truly independent commercial entity, which would provide fair and transparent tariffs for gas transport.

EU-Ukraine gas deal angers Russiahttp://top.rbc.ru/english/index.shtml?/news/english/2009/03/24/24122742_bod.shtml

Russia will have to rethink its ties with European partners if its interests in Ukraine are not respected, Prime Minister Vladimir Putin said in Sochi on Monday. “It is simply not serious to solve the problem of Russian gas supplies without us,” he said, commenting on the Ukraine-EU joint statement on the modernization of Ukraine’s gas pipeline network. The European Union refused to cooperate with Russia in providing loans to Ukraine. “We offered our European partners the chance to join efforts, but they said the European Commission did not have money for Ukraine,” Putin explained. According to Putin, if this is an attempt to take advantage of the crisis and seize control of Ukraine’s gas pipeline system, it is “a bad solution to the problem.” Instead, Putin proposed returning to the idea of an international consortium of Russian, European and Ukrainian companies for the overhaul of Ukraine’s gas pipeline network. A few years ago, Russia, Germany and Ukraine signed a declaration mentioning this opportunity, and the lease by the consortium of Ukraine’s gas pipeline system was even discussed in this respect. Ukraine and the EU issued a joint statement on the modernization of Ukraine’s gas pipeline network in Brussels on Monday. Ukrainian Prime Minister Julia Timoshenko said the document created a political and organizational framework for the reform of the republic’s gas transportation system. The statement makes it clear that the Ukrainian gas pipeline network will remain the property of the republic, Timoshenko stressed. “Both the statement and our work confirm

our willingness to cooperate, bringing the standards of Ukraine’s gas pipeline system and the whole of its energy sector in line with European standards,” she told reporters. The Russian Foreign Ministry criticized the move, however, noting that any actions to modernize Ukraine’s gas pipeline system, if not approved by Russia, could “increase technology risks, meaning the possibility of disruptions in Russian gas supplies to Ukraine and Europe.” Ukraine’s gas pipeline network consists of 38,000 km of gas pipelines, 73 compressor stations with a total capacity of 5,400 megawatt, and 13 underground gas storage facilities.

Moscow irked at Kiev’s EU overture http://www.ft.com/cms/s/0/e6e6cdc2-17e6-11de-8c9d-0000779fd2ac.html

By Joshua Chaffin in Brussels and Roman Olearchyk in Kiev

Published: March 23 2009 20:32 | Last updated: March 23 2009 20:32

Vladimir Putin threatened to review Russia’s ties with the European Union on Monday after Ukraine held talks in Brussels about refurbishing its Soviet-era gas pipeline system.

“If the interests of Russia are ignored then we will have to start re-examining the principles of relations with our partners,” the Russian prime minister said. “There’s no point in deciding the problem of increasing supplies of our gas without us.”

He made the threat after Ukraine and the EU signed a declaration to invest billions of euros in improvements to the ageing transit pipes that carry Russian gas to the EU.

The Russian foreign ministry said keeping Moscow out of agreements over modernising the pipeline “could lead to higher gas costs for Ukrainian and European consumers”, Interfax reported.

Sergei Shmatko, Russia’s energy minister, complained that Moscow had not been consulted. He warned that efforts to overhaul the system without the full participation of Russia, the network’s chief supplier, could lead to more instability. “Such a one-sided approach could cause significant los-ses to EU energy security,” he warned. A third of the EU’s natural gas comes via the Ukrainian system.

Mr Shmatko’s comments came as rivals Victor Yushchenko and Yulia Tymoshenko, Ukraine’s president and prime minister, appeared in Brussels. They promised to stamp out corruption and improve the transparency of the network as they sought to make a case for €5.5bn ($7.5bn, £5.2bn) in fresh investment from western partners.

“We are determined to improve the functioning of the gas market, to root out all kinds of corruption,” Mr Yushchenko told an audience that included big western energy companies and the president of the European Investment Bank.

Russia wants up to 10 submarines in Black Sea Fleethttp://en.rian.ru/russia/20090324/120704829.html

MOSCOW, March 24 (RIA Novosti) - Russia's Black Sea Fleet must have 8-10 submarines in active service and the Navy plans to commission new Lada class vessels to meet the requirement, a senior Navy official said on Tuesday.

The Black Sea Fleet, based in Ukraine's Crimea, currently deploys one Project 877 Kilo class diesel-electric submarine, while an outdated Project 641 Foxtrot class sub is undergoing a long-term overhaul.

"We are planning to deploy additional submarines with the Black Sea Fleet, including new Lada class vessels, but our plans are being hampered by Ukraine, which sees this as the deployment of new weaponry rather than an upgrade of the existing fleet," Vice Admiral Oleg Burtsev, deputy head of the Navy General Staff, told RIA Novosti.

The admiral said that the port of Novorossiisk would be an alternative to the main base in Sevastopol for the deployment of additional submarines when Russia finishes building the necessary infrastructure there.

"The infrastructure is being built under the federal program for the construction of a naval base in Novorossiisk until 2020," Burtsev said.

Russia's Black Sea Fleet uses a range of naval facilities in Ukraine's Crimea as part of a 1997 agreement, under which Ukraine agreed to lease the bases to Russia until 2017.

Ukrainian President Viktor Yushchenko announced last summer that Ukraine would not extend the lease of the base in the Crimean city of Sevastopol beyond 2017, and urged Russia to start preparations for a withdrawal.

After thoroughly analyzing the outcome of last year's military conflict with Georgia, Russia's Defense Ministry had proposed an array of measures to strengthen its troops in the country's southern region, as well as the Black Sea Fleet.

The first Lada class diesel-electric submarine featuring extended noise reduction will be commissioned with the Russian Navy in 2010. It features an advanced anti-sonar coating for its hull, an extended cruising range, and advanced anti-ship and anti-submarine weaponry, including Club-S cruise missile systems.

Singapore promising partner for Russia – Lavrovhttp://www.interfax.com/3/481403/news.aspx

MOSCOW. March 24 (Interfax) - Russia views Singapore as a promisingpartner in the Asian Pacific region and hopes that the Singaporean sidehas similar attitudes, Russian Foreign Minister Sergei Lavrov said. "I am glad that I have a chance to synchronize watches on majoritems on the bilateral agenda, as well as regional affairs in the AsianPacific region. We consider Singapore as a promising partner here,"Lavrov said at talks with his Singaporean counterpart George Yong-BoonYeo. "We are glad to note the increasing mutual interest on theSingaporean side. We think that prospects of bilateral relations arequite good and hope that we will be able to add them an impetus," Lavrovsaid. Yeo noted Russia's role in the increasingly global world.

Singapore: Minister for Foreign Affairs George Yeo visits Russia http://www.isria.info/en/23_March_2009_39.htm

Caption: Minister for Foreign Affairs George Yeo visiting the Trinity Monastery of St. Sergius in Russia on 22 March 2009.

Minister for Foreign Affairs George Yeo is on his first official visit to the Russian Federation from 22 - 24 March 2009. In Moscow, Minister Yeo is scheduled to call on his Russian counterpart, Minister of Foreign Affairs Sergey Lavrov and meet with prominent parliamentarians and businessmen. He is also scheduled to call on the new Patriarch of the Russian Orthodox Church.

Minister Yeo is accompanied by Ministry of Foreign Affairs officials.

Russian Minister of Foreign Affairs Sergey Lavrov Meets with the Vatican’s Secretary for Relations with States Dominique Mamberti http://isria.info/pages/23_March_2009_90.htm

A conversation took place in Moscow on March 23 between Minister of Foreign Affairs of the Russian Federation Sergey Lavrov and Archbishop Dominique Mamberti, the Vatican’s Secretary for Relations with States.

The heads of the Russian and Vatican foreign affairs agencies held an exchange of views on a number of topical issues of mutual interest in international politics, particularly those of a new European security architecture and the financial crisis and the prospects for collaboration within the UN and other international organizations. The problems of regional crises also were touched upon, including the questions of settlement in the Middle East, Afghanistan and the Balkans. There was emphasized on both sides the necessity of collective approaches and the observance of the principle of the rule of international law in solving international problems. The sides noted the coincidence of

their positions on a whole array of world problems, among them counteraction against the new threats and challenges, as well as questions of humanitarian cooperation.

Considerable attention was devoted to the promotion of inter-civilization and inter-church dialogue, and the struggle against the manifestations of extremism and confessional intolerance.

In discussing the bilateral agenda, the main attention was concentrated on the prospects of cooperation in the fields of culture, science and education, in particular, in questions of the preparation of a joint exhibition of Christian art.

Norwegian Foreign Minister Jonas Gahr Støre to Moscowhttp://www.barentsobserver.com/norwegian-foreign-minister-jonas-gahr-stoere-to-moscow.4569806-16174.html

2009-03-23

Norwegian Foreign Minister Jonas Gahr Støre meets with his Russian counterpart Sergey Lavrov in Moscow tomorrow. The two ministers will discuss cooperation between the two neighboring countries, particularly on fields like energy and economy, and also issues concerning the Arctic.

Norway's Foreign Minister Jonas Gahr Støre will be in Moscow on the 24th and 25th of March, the Government's web site reads.

This is Støre’s first visit to Russia this year. A visit to Murmansk and Arkhangelsk was scheduled for January, but Støre had to be replaced by his deputy because of illness.

The upcoming visit to Moscow will be one of several chances for the ministers to discuss cooperation in the high North this year. On the 28th and 29th of April, the foreign ministers from Finland, Norway, Russia and Sweden meet in Tromsø, Norway for the Ministerial meeting of the Arctic Council. On the 14th and 15th of October the foreign ministers will again meet at the Barents Council meeting in Murmansk.

In addition to the foreign ministers meeting with each other, Norwegian Prime Minister Jens Stoltenberg visits Moscow in May to have talks with both President Dmitry Medvedev and Prime Minister Vladimir Putin.

President Medvedev intends to raise issues of energy and of the Arctic when he meets with Stoltenberg, while the latter has said that he wants to discuss both climate changes and energy safety in the north with his Russian college. Last time Jens Stoltenberg visited Russia was in 2007.

Norway Visit to Talk Telenorhttp://www.themoscowtimes.com/article/1009/42/375599.htm

Norwegian Foreign Minister Jonas Gahr Stoere plans to discuss Telenor's ownership dispute of a Russian asset when he meets his counterpart in Moscow as the conflict threatens to rattle investors' confidence in Russia.

The meeting between Stoere and Foreign Minister Sergei Lavrov on Tuesday will touch on cooperation between Norway and Russia in the North and in the Arctic, with topics including energy and commerce, ministry spokesman Bjoern Jahnsen said by telephone from Oslo on Monday. Stoere will seek the opportunity to raise Telenor's troubles with its VimpelCom asset, he said.

A Russian bailiff seized Telenor's 29.9 percent stake in VimpelCom this month, escalating a dispute between the biggest Nordic phone company and Alfa Group, which owns 44 percent of VimpelCom. (Bloomberg)

Telenor’s legal battle is damaginghttp://www.barentsobserver.com/telenors-legal-battle-is-damaging.4569857-16175.html

2009-03-23- From what we can tell, this issue is indeed damaging the image of Russia as a recipient of foreign investment, a Norwegian Foreign Ministry spokesman says the day before Støre and Lavrov meets in Moscow.

Reuters report that the Telenor-issue will be on the agenda when Norwegian Foreign Minister Jonas Gahr Støre on Tuesday is meeting his Russian counterpart Sergei Lavrov.

Norwegian telecompany Telenor, 54 percent state-own, has claimed Russian companies are trying to steal its near 30 percent stake in Russia's second-largest mobile operator VimpelCom with the help of illegal court proceedings in Siberia.

Speaking anonymously to Reuters the Norwegian Foreign Ministry spokesman said “It's an important issue. Minister Støre will bring it up” (...) "From what we can tell, this issue is indeed damaging the image of Russia as a recipient of foreign investment," the spokesman said.

Last week, BarentsObserver reported that analysts said that Telenor’s conflict with Russia’s Alfa Group over control in the VimpelCom company is a test for Russian foreign investment credibility.

Russian MFA Spokesman Andrei Nesterenko Interview with RIA Novosti on the Upcoming Visit to Russia of Norway’s Minister of Foreign Affairs, Jonas Gahr Storehttp://isria.info/pages/23_March_2009_95.htm

Question: The Minister of Foreign Affairs of Norway, Jonas Gahr Store, is visiting Moscow in the next few days. How could you assess the present level of Russian-Norwegian relations and the prospects for their further development?

Answer: Norwegian Minister of Foreign Affairs Jonas Gahr Store will make a working visit to Moscow on March 24-25 at the invitation of the Minister of Foreign Affairs of the Russian Federation, Sergey Lavrov.

Russian-Norwegian relations are on the rise. Inter-parliamentary contacts and collaboration at the ministry/department level are expanding. The juridical base of bilateral cooperation is being strengthened. The agreements on the delimitation of the marine spaces in the Varanger Fjord, on visa facilitation and on admission took effect last year. Approximately ten new intergovernmental and interdepartmental agreements are currently in the stage of elaboration.

The accords reached between Lavrov and Gahr Store in the talks in June 2008 in Kirkenes and Murmansk, to create the most favorable conditions for the development of cross-border cooperation, are being successfully realized. Restrictions have been lifted on the movement of foreign transport on the Kirkenes-Murmansk highway, and a number of settlements in the Murmansk Region have been removed from the border zone regime. An intergovernmental agreement on the procedure for mutual trips of residents of the border territories of Russia and Norway is currently being drafted.

Question: What is the agenda of the upcoming Russian-Nigerian talks?

Answer: The full range of Russian-Norwegian relations is expected to be discussed, including a schedule for further development of the political dialogue, and key aspects of economic and trade collaboration and cooperation in fisheries, energy and environmental protection. Practical matters relating to the Russian economic and scientific presence on Norway’s Spitsbergen Archipelago will be examined. There is to be a conversation about expanding our countries’ interaction in the multilateral regional formats (Arctic Council, Barents Euro-Arctic Council, and Council of the Baltic Sea States).

Considering the upcoming ministerial session of the Arctic Council (April 28-29, Tromso, Norway), a substantive discussion of all Arctic problems is planned. We look forward to the approval at this event of the Russian initiative ‘Developing security systems in the realization of economic and infrastructure projects in the Arctic,’ which envisages monitoring and the prevention and management of man-made accidents and disasters, in particular, at oil and gas extraction and transportation facilities.

In discussing international themes, emphasis is to be placed on European security issues in the context of Dmitry Medvedev’s initiative for preparing a European Security Treaty along with discussing the prospects for development of Russia-NATO relations, the situation in the Middle East, in Afghanistan, around the Iranian nuclear program and other issues.

Question: What are the main directions of bilateral cooperation in the economic sphere?

Answer: Although trade has steadily been growing in recent years, the level achieved in 2008 of US.3 billion dollars (up 45% on 2007) does not yet match the economic potential of Russia and Norway. The full range of issues in economic and trade cooperation is planned to be discussed on May 5-6 this year in Oslo at the 12th session of the Russian-Norwegian Intergovernmental Commission on Economic, Industrial, Scientific and Technological Cooperation.

The strategic energy partnership between our countries is acquiring ever more real content. A vivid illustration of this is the agreement reached between Gazprom and StatoilHydro on the participation of this Norwegian company in the development of the Shtokman Gas Condensate Field.

We are interested in forging close cooperation across the technological chain – from joint production to development of technologies and creation of equipment and capacities for the processing of hydrocarbon raw materials.

On Russia’s initiative, uniform technical measures of regulation of the joint fish stocks in the Barents and Norwegian Seas are being developed, which will help standardize fishing procedures across this water area. In the upcoming talks attention will also be drawn to the incidents of detention of Russian ships by the Norwegian coast guard for insignificant violations.

The Russian side appreciates the participation of Norway in nuclear and radiation safety projects in Northwest Russia and considers that this experience of Russian-Norwegian cooperation can successfully be applied in other Russian regions.

Russia is interested in enhancing the effectiveness and diversification of its presence on Spitsbergen and is disposed toward constructive cooperation with the Norwegian side on practical issues in its materialization.

Russia to strengthen strategic nuclear subs http://news.xinhuanet.com/english/2009-03/23/content_11060174.htm

2009-03-23 23:31:50

MOSCOW, March 23 (Xinhua) -- Russia will strengthen its fleet of strategic nuclear submarines, a senior Navy official said Monday.

    Russia will maintain and upgrade its fleet of strategic submarines, carrying ballistic missiles, as a naval component of the nuclear triad, the RIA Novosti news agency quoted Vice AdmiralOleg Burtsev, deputy head of the Navy General Staff, as saying.

    The nuclear triad refers to the Strategic Rocket Forces, strategic aviation and nuclear submarine fleet.

    "There is no longer any need to equip missiles with powerful nuclear warheads. We can install low-yield warheads on existing cruise missiles," said Burtsev.

    He also said that Russia's new Severodvinsk nuclear-powered attack submarine will be commissioned with the Navy in 2010-2011.

    The new submarine is able to launch long-range cruise missiles with nuclear warheads, and engage hostile submarines and surface warships.

    Russia will also build at least six Borey-class strategic submarines to serve in the Northern and the Pacific fleets, Burtsev added.

Russian subs to delineate Arctic shelfhttp://www.barentsobserver.com/russian-subs-to-delineate-arctic-shelf.4569814-58932.html

2009-03-23 The Navy actively participates in civil programs on Arctic shelf delineation, Deputy head of the Russian General Staff Oleg Burtsev confirmed today.

Vice Admiral Burtsev says to RIA Novosti that Northern Fleet submarines definitely will play a key role in the Arctic delineation process, either with regard to the studies of the shelf, or with the protection of areas adjacent to Russian Arctic waters.

He confirms that the issue of the Navy vessels’ participation in shelf delineation processes now is being elaborated on.

However, despite the new assignments, the Arctic remains important for the Navy first of all because of its military strategic importance, the military leader underlines.

-The relevance of sailing under the ice is dictated not as much by shelf exploration in times of climate change and melting ice and the exploration for hydrocarbons, as by the enhanced concealment, combat stability, the efficient execution of military operations and the use of [our] main weapon – the ballistic missiles, Mr. Burtsev said.

Arctic Cossacks to protect Murmansk borderhttp://www.barentsobserver.com/arctic-cossacks-to-protect-murmansk-border.4569691-16180.html

2009-03-23

The first 15 people from Murmansk Oblast today took their Cossack oath. One of their tasks will be to help guard the border to Norway and Finland.The Cossacks took their oath in the Vesna military compound in Murmashi. They are the first declared Cossacks in Murmansk Oblast, MBnews.ru reports. Another 500 people the region are believed to have a Cossack family origin, the news site reports.

Among the assignments of the regional Cossack movement will be to guard the border to Norway and Finland, Viktor Ignatenko from the Murmansk regional administration says. He confirms that a summer camp will be established near the border station of Lotta.

The Cossack community also plans to engage in fire fighting, street patrolling, as well as give military-patriotic teaching of children and young people, regional ataman Aleksey Zubarov says.

ARCTIC FLIGHTS

Talk of 'Russian bear' a lot of hot air, Moscow sayshttp://www.theglobeandmail.com/servlet/story/LAC.20090324.JETS24/TPStory/National

STEVEN CHASE

March 24, 2009

OTTAWA -- A senior Russian diplomat chided Canada yesterday for criticizing his country's military training flights in the Arctic, accusing Ottawa of overreacting and reviving Cold War political rhetoric.

Dmitry Trofimov, head of the political section at Russia's embassy, told a Commons defence committee that Canadian talk of the "Russian bear in the air" is overblown. "Let us not exaggerate this.

"The only bears which do really matter today are those who are responsible for the slump in our stock markets, whether it's London, New York, Toronto or Moscow."

Mr. Trofimov appeared before MPs yesterday to defend the flights of two Russian Tupelov bombers that approached Canadian airspace on the eve of U.S. President Barack Obama's Feb. 19 visit to Ottawa.

He said anti-Russian talk may score points at home but is counterproductive abroad.

"Besides the rhetoric being useful for domestic purposes, if there are any ... it can hardly be any of help for interstate relations," Mr. Trofimov said.

Flush with money after years of climbing oil prices, a resurgent Russia resumed military training flights along Cold War routes about two years ago.

The manoeuvres have become a source of irritation for the Harper government and, after the Feb. 18 flights, the Prime Minister publicly rebuked Moscow for what he called encroachments on Canadian Arctic territory.

"This is a real concern to us," Mr. Harper told Canadians on Feb. 27, expressing his concern "with increasingly aggressive Russian actions around the globe and Russian intrusions into our airspace."

But Mr. Trofimov played down the military exercises and dismissed accusations the Russians are breaching sovereign territory, saying that all flights remain in international airspace. He pointed out that U.S. and British jets fly in the same northern airspace - veering just as close to Russian territory as Russia's aircraft come to Canada.

He noted that Washington has been silent on the February bomber flights, except for the U.S. general who heads the North American Aerospace Defence Command and complimented the Russians on their conduct during the training flights.

U.S. General Gene Renuart said last month the Russians "have conducted themselves professionally" with their military training flights. "They have maintained compliance with the international rules of airspace sovereignty and have not entered the internal airspace of either of the countries," he said.

The Tories have repeatedly complained about the fact the Russians give Canada no forewarning of their flights.

Yesterday, Mr. Trofimov was unapologetic, saying Canada doesn't receive a heads-up because Moscow is not obliged to do so under international law.

"From the point of international law, nothing happened," he said. "Absolutely nothing."

He said, however, that Russia does notify the U.S. about upcoming training flights because the two countries have a treaty that requires it.

The Russian diplomat ducked questions from MPs over whether Russian submarines were in the Canadian Arctic last summer. As The Globe and Mail reported last week, the Canadian Forces received a "reliable" report of a foreign submarine off northern Baffin Island last August.

"We're talking a certain submarine which is not supposed to be there," said Mr. Trofimov. " I am frankly speaking a very simple question: What submarine, whose submarine and where exactly?"

Russia's economy minister heading for Moldova

http://www.rbcnews.com/free/20090324092830.shtml

      RBC, 24.03.2009, Chisinau 09:28:30.Russian Economy Minister Elvira Nabiullina will pay a working visit to Moldova at the invitation of the countries Economy Ministry on March 25. According to the Moldovan ministry, Nabiullina will participate in a number of bilateral highest-level meetings with Moldova's President Vladimir Voronin and top officials of the Economy Ministry. She will also visit Russia's trade mission launched in late 2008.

      According to the Moldovan ministry's data, trade between the two countries reached $984.5m in 2008, up 34.6 percent ($253.2m) from 2007. Moldovan exports to Russia expanded 36.8 percent to $318.4m, while Russian exports to Moldova rose 33.3 percent to $666.1m. Russia is Moldova's third largest trading partner.

Russia, Transnistria to ink economic cooperation pact

http://www.rbcnews.com/free/20090324105520.shtml

      RBC, 24.03.2009, Tiraspol 10:55:20.Russia and Transnistria plan to sign a comprehensive agreement on the grounds for economic cooperation, Transnistrian leader Igor Smirnov told journalists today. The need for such an accord was on the agenda at his meeting with President of Russia Dmitry Medvedev, and it is currently in the works. According to Smirnov, the accord is of the utmost importance, as it would allow Russia and Transnistria to cooperate on a broad range of issues.

      Smirnov also told journalists that the progress of Russia's national projects in Transnistria was discussed at the meeting with the Russian president. The projects must be based on a territorial rather than personal identification principle, Smirnov stressed, as it is impossible to single out all Russian citizens in Transnistria and apply individual programs to them.

Nezavisimaya Gazeta

Transdnestr considers integration into Russia

http://en.rian.ru/analysis/20090323/120698700.html

When the presidents of Russia, Moldova and Transdnestr signed a trilateral declaration on the settlement of the Transdnestr conflict in Moscow, many analysts concluded that Russia was ending its peacekeeping mission there.

However, Igor Smirnov, president of the self-proclaimed republic, has assured the newspaper that Russia will not pull out of the republic, which may be integrated into Russia.

Relations between Transdnestr and Russia have experienced somewhat of a renaissance, Smirnov said. Moscow is actually guaranteeing the political and economic viability of the republic where every third adult is a Russian national.

Acting on the instructions of the president, the Russian government is considering the possibility of issuing a $200 million loan to help the republic's industrial plants, which are not working to capacity because of a blockade on the republic and the global economic crisis.

The Russian Security Council is due to consider in the near future several issues related to Transdnestr.

The breakaway republic is not discussing with Moldova the possibility of reunification, but ways to normalize relations between two neighboring states.

"In fact, we will become Russia's Transdniestrian region," Smirnov said. He said Russia's leadership had a "very positive" attitude to Transdnestr, and that he thought the outlook was better under President Dmitry Medvedev than it was under Vladimir Putin.

Transdnestr is also pinning hopes on possible improvements in Russia's relations with the United States.

"In one of their documents written under [President Barack] Obama, the Americans describe Transdnestr as a zone of Russian influence," the republican president said. "In other words, they recognize Russia's right to monitor developments in the former Soviet republics."

"I have a reason to believe that the Russian scenario is not the least important," Smirnov said. "Medvedev clearly showed by his example concerning [Georgian President Mikheil] Saakashvili that the aggressor will be rebuffed."

Medvedev to hold security strategy meeting http://en.rian.ru/russia/20090324/120702430.html

MOSCOW, March 24 (RIA Novosti) - Russian President Dmitry Medvedev will hold a meeting with the national Security Council on Tuesday to approve a national security strategy up to 2020.

The strategy, which updates a 1997 plan, aims to improve the quality of state administration and coordinate the activities of the government and public organizations on defending Russia's national interests and protecting society and the state.

At a meeting with Defense Ministry officials last week, Medvedev said long-term defense plans must be based on the national security strategy, taking into account modern-day realities and potential threats.

Under the previous strategy, terrorism was identified as the main threat facing the country.

Analysts say that in the new strategy, the main threats will be identified as competition for energy resources, NATO's expansion near Russia's borders, and the policies of a number of states to gain nuclear pre-eminence over Russia.

The president announced last year that Russia would make the modernization of its nuclear deterrent and Armed Forces a priority in light of last August's war with Georgia.

Russia's military spending has been steadily growing recently. According to various estimates, spending will rise 50% over the next three years from the current level of $40 billion.

Defense Minister Anatoly Serdyukov said earlier that the share of modern weaponry in the Russian Armed Forces would reach 30% by 2015, and 70% by 2020.

RF Security Council to adopt nat'l strategy for period till '20

http://www.itar-tass.com/eng/level2.html?NewsID=13709848

MOSCOW, March 24 (Itar-Tass) - President Dmitry Medvedev is to convene a session of the the Secutirty Council of the Russian Federation (SCRF) in the Kremlin here on Tuesday for it to approve a National Security Strategy of Russia for the next 12 years.

The Strategy is setting the task of attaining truly ambitious goals, namely, the country's transition from the energy-raw-materials scenario to an innovative scenario of development, the formation of a highly professional army, special services, prolongation of the longevity of people in Russia, higher education standards, and the gaining of an indisputable prestige in the international arena.

Many an expert points out that it is the first time that a long-term security strategy of one of the world's key players is adopted in the light of the current financial crisis. In view of this, the document must also have such parameters that, in case of necessity, can be effectively adapted to the changing conditions.

A presidential administration staff member, who engaged in the elaboration of the document, has told Itar-Tass, "A final version of the Strategy was completed on the very eve of the SCRF session, on March 23".

As a result, the text of the Strategy, which is to be introduced to the President on Tuesday, has several tens of pages. The document consists of thematic sections dealing with national strategic priorities. Each priority has been examined separately.

Medvedev Orders Russian Grain Company Creation to Boost Exports

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYnh9H.sjOk8

By Torrey Clark

March 24 (Bloomberg) -- Russian President Dmitry Medvedev ordered the government to set up OAO United Grain Company by the end of the year to boost state exports and develop domestic infrastructure.

United Grain Company, based on the former food market regulation agency, will get stakes of 25 percent to 100 percent in 31 elevator and grain processing units, according to the order Medvedev signed March 20 and posted yesterday on the Kremlin Web site.

The government has been developing the planned company since at least July last year. The new body would aim to control as much as half the nation’s exports within three years, the Kommersant newspaper reported then.

The state company will have “wide-scale opportunities incomparable with any private grain company,” Mary Ellen Smith of the U.S. Foreign Agricultural Service said in a report published Jan. 30 on the Department of Agriculture’s Web site. The plan contradicts Russian antitrust laws and its World Trade Organization commitments, the USDA said.

To contact the reporter on this story: Torrey Clark in Moscow at tclark8@bloomberg.net.

Last Updated: March 24, 2009 04:34 EDT

Medvedev Creates State Firm For Grain Market Purchaseshttp://www.themoscowtimes.com/article/1009/42/375612.htm

24 March 2009By Jessica Bachman / The Moscow Times

President Dmitry Medvedev has signed an order establishing a state grain-trading company based on the Agency for Commodity Market Regulation, according to a statement posted on the Kremlin's web site Monday.

The government will initially hold 100 percent of the company's shares. Medvedev signed the order Friday, the Kremlin statement said. The agency, which operates under the auspices of the Agriculture Ministry, has managed interventions in the grain market and runs other state regulatory programs.

According to the decree, the state's stakes in 31 companies will be transferred to the new company's balance sheet "within the next nine months." The asset base of the grain giant includes grain silos, flour mills, industrial production facilities and export terminals spread across 14 regions.

The company's resources are such that it could control up to half of Russian grain exports, said market experts familiar with the company, which has been in the making since the summer.

"The company will certainly be a big market player," said Alexander Korbut, vice president of the Russian Grain Union. "It will create more competition, and the market will develop as a result. But the government doesn't plan on making this a monopoly," he said.

According to the order, the company will help increase grain export volumes and develop the country's storage capacity as well as domestic transport and port infrastructure.

By November, the company must produce a business-development strategy through 2015 that includes its intention to sell stakes to private companies and investors. Market experts say the state would eventually like to cut its share to a blocking stake of 25 percent plus one share.

New governor to be sworn in on Wednesdayhttp://www.barentsobserver.com/new-governor-to-be-sworn-in-on-wednesday.4569719-16174.html

2009-03-23 The Murmansk regional Duma is on Wednesday expected to approve Dmitry Dmitriyenko as the region’s new governor. The inauguration ceremony will take place that same day.

The United Russia party in Murmansk yesterday approved Mr. Dmitriyenko as new governor, B-port.com reports. Also the regional Communist Party now confirms that it will support the candidacy.

In the Wednesday duma session, Dmitry Dmitriyenko will get green light from the regional legislators.

The political elite in the region will subsequently assemble to inaugurate the new governor. Among the outside guests will be Ilya Klebanov, the northwest Russian presidential representative, TV21 reports.

Katanandov also on black-listhttp://www.barentsobserver.com/katanandov-also-on-black-list.4569930-16174.html

2009-03-24 Head of the Republic of Karelia, Sergei Katanandov, is said to be on the list of governors expected to be ousted.

The speculations about possible regional leaders to be sacked by Presidential decree are many in today’s Russia. A so-called “black-list” outlines the most probable governors to be removed by President Dmiti Medvedev.

Sergei Katanandov, head of the Republic of Karelia, is one of the "to-be-removed" candidates, reports, the Weekly Journal.

In October last year BarentsObserver reported that Katanandov was one of the most unsuccessful Russian regional leaders, according to a rating made by the International Institute of Political Expertise and the Petersburg Politics Fund.

The Russian president got the right to appoint and dismiss governors under a law proposed by Putin in 2004.

Together with Vladimir Torlopov - head of the Republic of Komi, Sergei Katanandov is the last acting elected regional leaders in the Russian part of the Barents Region.

The first to be dismissed was Nenets Governor Aleksey Barinov. He was arrested in May 2006 accused of fraud and then subsequently dismissed from his position. Barinov was sentenced to three years in prison in 2007, although he still claims that the case against him has been initiated by political opponents, BarentsObserver reported in 2007.

Last elected Arkhangelsk Governor, Nikolay Kiselyov, was sacked and replaced by Ilya Mikhalchuk in April 2008. Mikhalchuk came to Arkhangelsk from Siberia where he earlier was city Mayor in Yakutsk. At the same time, Mikhalchuk brought with him a mass of other bureaucrats from Yakutsk.

Medvedev Says Sochi Games Will Be Fundedhttp://www.themoscowtimes.com/article/600/42/375597.htm

24 March 2009 Reuters

SOCHI, Krasnodar Region -- President Dmitry Medvedev on Monday brushed aside concerns that a deepening economic crisis could scupper billions of dollars in state funding for the country's 2014 Winter Olympics.

Russia has pledged to spend as much as $12 billion in private and public money on developing Sochi, where the games will be held.

"Despite the crisis, we will have to finance those volumes which were planned," Medvedev told a meeting of officials, who were called to discuss preparations for the

games. "These clauses in the budget are secure [from cuts]."

The Kremlin said in a statement that it was even considering using student brigades to help finish off building work, harking back to Soviet times when the authorities used special student crews for cheap labor. Russian officials refuse to give exact spending estimates for the games, but the original 2007 bid for the games mentioned a $12 billion figure for developing the entire region.

Deputy Prime Minister Dmitry Kozak, who is in charge of preparations, said this month that Russia would spend $6.1 billion on direct preparations for the Olympic Games.

Medvedev said the Sochi area was in need of new electricity generation capacity, but he added that private investors were not rushing to spend money.

"There are problems with finding investors," he said.

Medvedev also complained that bureaucracy was slowing preparations.

"A lot of things which need to be done rapidly are being ensnared in bureaucracy," he said. "Normal work has still not been established." He told officials to speed up work on setting aside land for Olympic buildings.

Kremlin critic in ammonia attack http://news.bbc.co.uk/2/hi/europe/7959819.stm

A prominent Kremlin critic who is running for mayor of Russia's Black Sea resort of Sochi has said assailants squirted ammonia in his face on Monday.

Boris Nemtsov said he was attacked by three men outside his campaign HQ. He apparently suffered no lasting harm.

Mr Nemtsov said he believed pro-Kremlin activists had carried out the attack in response to his criticism of plans to hold the 2014 Winter Olympics in Sochi.

He said it was physically not ready for the burden placed on it by the Games.

The Kremlin has not yet commented on Mr Nemtsov's claim that pro-Kremlin activists were involved.

Russian President Dmitry Medvedev visited Sochi later on Monday to host a meeting discussing preparations for the Olympics, during which he warned that work was being "mired in bureaucratic problems".

"The authorities that are in charge of the process are in constant talks with each other and normal work has not yet started," he said.

'Criminal elements'

Mr Nemtsov, a native of Sochi, became one of Russia's most prominent politicians following the fall of the Soviet Union.

The Western-orientated market reformer served twice as deputy prime minister under former Russian President Boris Yeltsin in the 1990s. However, he lost the job following the 1998 economic crisis and became a vocal critic of Vladimir Putin, now prime minister, during his eight-year presidency.

Speaking on Ekho Moskvy radio after the attack, Mr Nemtsov blamed activists from a pro-Kremlin youth group, Nashi.

"The authorities, who are obviously in a hysterical state, decided to resort to criminal elements, specifically members of the Nashi movement, judging by their style, by their faces - we recognised several of them," he said.

"And they - meanly, from behind a corner as always - jumped at us and squirted us with ammonium chloride."

He added: "Fortunately, I managed to rinse my eyes fast and generally recover myself rather quickly."

Mr Nemtsov said he had called the police three times afterwards but that no officers had visited the scene of the attack, adding: "They are terribly afraid."

A Kremlin spokesman said he could not immediately comment on the allegations. Nashi representatives have also not yet commented.

Two weeks ago, Andrei Lugovoi, the prime suspect in the murder in London in 2006 of Kremlin critic Alexander Litvinenko, announced that he would run for mayor of Sochi in next month's election.

Russian police arrest Tajik heroin traffickers http://en.rian.ru/russia/20090324/120704113.html

MOSCOW/KRASNOYARSK, March 24 (RIA Novosti) - Almost three kilograms (six pounds) of heroin have been seized by narcotics police in two separate incidents outside Moscow and in Siberia's Krasnoyarsk, police officials said on Tuesday.

According to a Krasnoyarsk police official, a Tajik national was arrested in a sting operation selling 50 grams of heroin. During a search of his apartment, officers found 1.7 kilograms of heroin stashed on a shelf in the bathroom.

In the Moscow suburb of Zheleznodorozhny, authorities arrested another Tajik national carrying more than 1.2 kilograms of heroin.

Most of the heroin and hashish coming into Russia originates in Afghanistan and is trafficked into the country through the former Soviet republics of Tajikistan and Uzbekistan. Most of the drugs are then sold in Russia's largest cities, or shipped on to Europe.

In another incident in the airport of Tajikistan's capital, Dushanbe, a Tajik was arrested early on Tuesday morning by customs officials for attempting to smuggle 400 grams of heroin into the Siberian city of Novosibirsk. The Tajik had swallowed 68 drug-filled capsules to hide the drugs.

The arrest was the second heroin bust at Dushanbe airport within a week. On March 17, a Filipino woman attempted to smuggle into Turkey some 3,300 grams (7 pounds 4 ounces) of heroin stuffed into 758 fabric buttons stitched onto 33 Tajik national robes.

During 2008, some 20 kilograms of heroin were seized on flights from Dushanbe to Istanbul, leading to the arrest of five smugglers from South Africa, Uganda, the Philippines and Turkey.

Tajikistan is a major smuggling route for heroin from neighboring Afghanistan, the world's largest heroin producer.

Chechens in Turkey fear Russian intelligence death squad teamhttp://www.axisglobe.com/article.asp?article=178423.03.2009Turkish online paper World Bulletin reports that a new debate has been surfaced after three Chechen murders in Istanbul in five months. While all doubts are on the Russian intelligence, Muslum C, an aide of Ali Osayev, killed last week, says, "a team of 30 Russian intelligence agents walks freely in Turkey now. After every murder, we ask ourselves "who is next". Turkey should take precautionary measures." In Istanbul, Edilsultanov Gazi who fought against Russian army in Chechnya as 'Colonel' on September 6, Islam Canibekov on December 9 and Islam Ali was assasinated late February. Way and used weapons of these attacks prompts to think over the role of Russian FSB intelligence. Muslum C. insisted the Russian intelligence agency is "behind these killings". "Murders are committed by the Russians or their accomplices. Russia is trying to destroy us by using puppets in Chechnya like Ramazan Kadirov", he said. The Russian regime critics in Turkey say the Russian domestic intelligence agency (FSB) is known for attacks against not only to Chechens, anyone who criticizes the invasion of Chechnya in Russia, who talks about the human right abuses in the region. "The questions about the agency has been intensified after Putin's Duma gave special powers to use for specific tasks within and outside the country. The agency is able to make electronic listening in abroad and carry out assassination in anywhere in the world." 

French intelligence to help Turkish secret services to investigate Russian hitmen murders http://www.axisglobe.com/article.asp?article=178423.03.2009

A confidential summit of the secret services of Turkey and France, which has taken place in Istanbul and has been focused on the joint efforts to combat with hitmen gangs of Russia and Chechen leadership that organized terror against the Chechen refugees in Europe, the Turkish daily newspaper Sabah reports. "French officials, who want to protect Chechens living in their country, secretly came to Turkey to investigate three Chechen murder cases. Exchange of information has been conducted between the Turkish and French officials. The mysterious murders of Chechen in Istanbul, had alarm not only the Turkish security units but also the French intelligence service. A few days ago, a French delegation secretly came to Turkey to get information about the murder cases of Chechens. The delegation met with prosecutors and intelligence service. According to information, some time ago the French intelligence units got info saying that armed and bomb assassinations of the Chechen leaders would be conducted in France. The French intelligence services believe that assassinations are planned by the Russian secret service (FSB). French intelligence has changed addresses and IDs of the Chechen leaders living in France. The French anti-terror police has given a strict protection to the Chechen leaders and their families living in the country. The French delegatiin did secret entry and exit from airport and met with Turkish Ministry of Justice and the National Intelligence Organization (MIT). The Liaison Judge Philippe Dorcet from French delegation said the following to "Sabah" newspaper: "We have got information from our secret police DGSE that assassinations of the Chechens would be carried out in France. We are doing a very secret investigation in this direction. Chechen murders that occurred one after another in Turkey attracted our attention. We think murders in Turkey show similarities to each other. We have established a special intelligence team for Chechens living in France. A Russian connection is closely examined from the intelligence that we got.” Istanbul Deputy Chief Prosecutor Turan Cholakkad, who participated in the meeting with the French delegation, said that the murders of Chechens do not relate to organized crime. In the meantime it is reported that the MIT has prepared a report on three Chechen murder cases. The report says that the killed Ghazi Edilsultanov, Islam Janibekov, and Ali Osayev are all participated in the resistance in Chechnya. The report also indicates that the most of the Chechen groups enter Turkey illegally, but they do not do any crimes here.

Russian secret services linked to cyber-attacks against Georgia http://www.axisglobe.com/article.asp?article=178423.03.2009

Security researchers from Greylogic published a report which concluded that the Main Intelligence Directorate of Armed Foces of the Russian Federation (GRU) and the Federal Security Service (FSB), rather than patriotic hackers, were likely to have played a

key role in co-ordinating and organising the attacks, The Register writes. More circumstantial evidence has emerged linking the Russian authorities to cyber-attacks on Georgia that coincided with a ground war between the two countries in July and August last year. The Stopgeorgia.ru forum, which became a fulcrum for attacks of key Georgian websites last year, uses an ISP located a few doors down from GRU headquarters. Greylogic reckons the site was added as a front for state-backed cyber-attacks under the cover of cybercrime. The StopGeorgia.ru forum was part of a bulletproofed network that relied on shell companies and false WHOIS data to (a) prevent its closure through Terms of Service violations, and (b) to mask the involvement of the Russian FSB/GRU. By mimicking the structure of the Russian Business Network, a cyber criminal enterprise, it creates plausible deniability that it is a Kremlin-funded Information Operation. Greylogic's study concludes: "The available evidence supports a strong likelihood of GRU/FSB planning and direction at a high level while relying on Nashi intermediaries and the phenomenon of crowdsourcing to obfuscate their involvement and implement their strategy." Nashi is a youth group in Russia founded four years ago to counter anti-Russian and fascist tendencies in the country. The group is supposedly funded by Russian businessmen, but a pipeline from the Kremlin is suspected, The Register says. Long-standing rumours that Russia was behind cyber-attacks on neighbouring countries were recently fuelled when State Duma Deputy Sergei Markov claimed that one of his assistants was responsible for instigating cyber-attacks against Estonia in 2007. Shortly after this, Konstantin Goloskokov, a "commissar" in Nashi, claimed he and other associates were responsible for the month-long cyber-assault on Estonia. The Project Grey Goose Phase II report is a follow-up to an October report by the same group of security researchers on the Georgian cyber war. 

Trial of Georgian-Armenians accused of spying for Russia to take place in near future http://www.axisglobe.com/article.asp?article=178423.03.2009

Two Armenian citizens of Georgia accused of forming an illegal armed group and spying are out on bail of about $1,176 each, The Armenian Reporter writes. The criminal case filed against them is pending and a trial will take place in the coming months. The two Armenians, Grigor Minasyan, a youth center director, and Sarkis Hakobyanyan, director of the Charles Aznavour Charitable Union, were arrested on January 22 and released on March 6 in the town of Akhaltsikhe, the regional centre of Georgia's Samtskhe-Javakheti province. Minasyan stressed briefly to The Armenian Reporter that on his release he had signed a document agreeing not to give any interviews and divulge details of the case. He said he accepted the accusations which he had been charged with. The lawyer for the two arrested ethnic Armenians, Nino Andriashvili, told IWPR they were accused of cooperating with a Belarus-based organization allegedly set up by Russia's Federal Security Service, FSB, called the Association for Legal Assistance to the

Population, ALAP. Andriashvili said the two men had admitted being involved in espionage, but denied a secondary charge of planning to create a private army. She said the investigators had a video of the two men discussing the creation of such an army with the local head of ALAP, but that they had not thought he was being serious. In another interview, Andriashvili told EurasiaNet, "In part, they admitted that they are spies, but they did not admit that they were preparing to form a [militia group]," adding that the two men told her they were under "pressure" when they made their admissions of guilt. ALAP seems to be based in Minsk, and its website says the organization is dedicated to promoting "peace, education and civil society development," but has no information on the source of its funding. According to EurasiaNet, an online directory of Belorussian civil rights organizations identifies ALAP as active in human rights issues. In an interview with The Armenian Reporter, one of the leaders of an NGO in Georgia, who knows Samtskhe-Javakhk very well, said that ALAP is a fake organization. "One supposition is that the organization, ALAP, is headed by Georgian special services in order to check the loyalty of certain Armenian circles toward Georgia. The power bodies have their wiretaps; all of the NGOs here are bugged, especially the ethnic minorities," said the anonymous source. 

Transformation of Russia’s GRU brigades to be continued, officers leaving for new place of service http://www.axisglobe.com/article.asp?article=178423.03.2009

In the course of reforming of the Russian Armed Forces no one serving in the special-task divisions will be dismissed from the service, the Chief of General Staff of the Ministry of Defence of Russia, Nikolai Makarov, told members of the Russian State Duma answering the questions of parliament members, TV Zvezda reports. Makarov stressed that the question is about two brigades of the Siberian Military District under the Main Intelligence Directorate of the General Staff which have been deployed in Ulan-Ude and Berdsk of Novosibirsk area. They are made up to 50 percent of the necessary structure and goes to strength of 250 men in each brigade, according to the Chief of General Staff. „We pour together these 50 percent and make 100 percent completeness,” Makarov said. All officers of the new brigade will be located in Irkutsk on the basis of the local military school, he added. Makarov who is the former Commander of the Siberian Military District stressed that all officers of the two brigades will be continuiung their service in the Russian Armed Forces, TV Zvezda notes. 

Two bombs go off in Makhachkalahttp://www.interfax.com/3/481375/news.aspx

MAKHACHKALA. March 24 (Interfax) - Two explosive devices went offnear the headquarters of the department for the prevention of organizedcrime of the Dagestani Interior Ministry around 10:10 p.m. on Monday,

Dagestani Interior Ministry spokesman Mark Tolchinsky told Interfax. An investigation is underway, he said.

Russian who says he spied on opposition denied asylum in Finland http://www.axisglobe.com/article.asp?article=178423.03.2009

Alexander Novikov, a Russian who says he was recruited by Russia’s Federal Security Service (FSB) to spy on a liberal opposition group said that he was denied political asylum in Finland and fears retaliation if deported to Russia, online paper Easy Bourse reports. "If they are mild, they will put me in jail," Novikov is quted by the news agency AFP as saying by telephone from the northern Finnish town of Rovaniemi. Novikov says that from 2006 to 2008 he was paid by Russia's FSB to infiltrate an anti-Kremlin political group led by former world chess champion Garry Kasparov. He went public with his claims in February 2008 during a trip to Denmark and subsequently applied for political asylum in Finland - an application that was rejected by Finnish authorities on March 20, he said. Novikov said he was reprached that he had not presented enough material to be granted political asylum. According to Novikov, the FSB paid him about $300 at the time a month to pose as an activist of Kasparov's group, the United Civil Front, and give them regular reports about its activities. Novikov says he gave the FSB advance information about the group's protests. Russian opposition groups say they are regularly spied on by the FSB, Agence France Press marks.

National Economic Trends

Budget to receive $18bn from Reserve Fund in March

http://www.rbcnews.com/free/20090324104422.shtml

      RBC, 24.03.2009, Moscow 10:44:22.By late March, RUB 600bn (approx. USD 18.02bn) will be transferred from the Reserve Fund to the federal budget's balance sheet, while another RUB 600bn (approx. USD 18.02bn) will be transferred in April, and an additional RUB 400bn (approx. USD 12.01bn) in May, head of Russia's Federal Treasury Roman Artyukhin told journalists today. With this in mind, a total of RUB 1.6 trillion (approx. USD 48.04bn) will be allocated from the fund in accordance with a government decree, Artyukhin said. He added that the federal budget had already received RUB 300bn (approx. USD 9.01bn) from the Reserve Fund.

Finance minister foresees more bad debt problems

http://www.rbcnews.com/free/20090324114715.shtml

      RBC, 24.03.2009, Moscow 11:47:15.The Russian Finance Ministry expects a second set of problems stemming from bad debts to emerge in the country's financial system, Russian Deputy PM and Finance Minister Alexei Kudrin said during today's meeting of the extended Economy Ministry board.

Russia finds itself in active stage of crisis – Nabiullinahttp://www.itar-tass.com/eng/level2.html?NewsID=13711179

MOSCOW, March 24 (Itar-Tass) - Economic Development Minister Elvira Nabiullina said on Tuesday Russia is in the active stage of the crisis.

She stressed Russia’s economic growth slowdown estimated at 2.2 percent in 2009 is comparable to other countries – the United States (2.6-3.5 percent), Europe (2.1-3 percent) and Japan (5-5.1 percent).

At the same time the slowdown in many countries will be much bigger than in Russia, the minister said. According to estimates, in Ukraine it will deepen to 9-11 percent, in Latvia- to 11 percent and in Hungary – to 7-11 percent.

The rouble’s devaluation reaches 40 percent, while in other countries this figure is much bigger.

The main reason for Russia’s GDP reduction is the world economic crisis, but its depth depends on domestic economic conditions. Thus, among such reasons are non-diversity of economy and export, insufficient development of the financial system that has no long-term financial resources. For instance, Russia’s mid-term credit was available for 1.5 years, while in other countries – for 4 years and under less interest rates.

Nabiullina stressed that the creation of a buffer scheme was a right decision, but not much attention was paid to resolving economic development problems.

If the structure of the Russian economy changes, this would be the way out of the crisis, if not, the country’s economy will depend on fluctuations in other countries, in the U.S. and China in particular.

Russian ministers oppose tax increases on business (Part 3)http://www.interfax.com/3/481441/news.aspx

MOSCOW. Mach 24 (Interfax) - Russian Economic Development MinisterElvira Nabiullina said she is against increasing the tax burden onbusinesses, primarily on the salary fund. "I do not think now is the right time to make a decision to

increase the tax burden on the national businesses, especially the taxburden on the salary fund," Nabiullina said at a meeting at the EconomicDevelopment Ministry on Tuesday. According to earlier reports, the government planned to considernew tax initiatives, which, if adopted, would result in an increase inthe tax burden on the salary fund, in April. Deputy Prime Minister and Finance Minister Alexei Kudrin told themeeting he shared Nabiullina's view. "I'm also against tax increases in the short term," he said. The Finance and Econ Ministries were behind a number of tax cutsthis year, including profit tax, amortization premiums and oilextraction tax this year. Now, in times of crisis, the government ought not to adopt newdecisions that make it hard for businesses to operate, he said.

Economy expected to revive in Q4http://top.rbc.ru/english/index.shtml?/news/english/2009/03/23/23164212_bod.shtml

The Russian Economy Ministry expects GDP growth in the fourth quarter, Deputy Economy Minister Andrei Klepach told reporters today, adding that GDP figures for the second and third quarters could be lower than in the corresponding periods from last year, but higher than in the first quarter of 2009. He said that inflation in March would be lower compared to both March 2008 and February 2009. In February, it reached 1.7 percent. “It is very important for inflation to be lower than in March 2008,” he emphasized. The Economy Ministry has no plans to change its oil price forecast for 2009, according to Klepach. “We had considered the possibility of higher oil prices, too, but they are very hard to monitor. The average price could rise above our projection of $41 a barrel,” he noted, describing oil prices as another factor to support personal incomes and investment in the country. Economy Minister Elvira Nabiullina reported last week that Russia’s GDP was down 8 percent in January and February 2009, and on the whole, a 7 percent decline was expected in the first quarter of the year. According to the government’s revised socioeconomic development for 2009 approved on March 19, GDP is expected to drop 2.2 percent, and investment 13.8 percent, while trade will climb 0.3 percent. Capital expenditures will decline by about 1 percent of GDP, to 3.1 percent of GDP. Investment loans are also expected to decrease by a factor of 2.8. The economic decline will continue in the first half of 2009 since the government’s anti-crisis measures are expected to take effect only towards the end of the second quarter. GDP growth could be down 4-5 percent, and investment might contract by 15-18 percent.

Micex to float Bank of Russia's bonds

http://www.rbcnews.com/free/20090324095644.shtml

      RBC, 24.03.2009, Moscow 09:56:44.The Moscow Interbank Currency Exchange (Micex) will stage an auction to float Bank of Russia's bonds worth RUB 5bn (approx. USD 150.15m), the exchange's press office said.

Ruble rise checked by Central Bank http://www.rbcnews.com/komment/komment.shtml

The ruble’s attempts to extend gains against the euro/dollar basket proved futile

Last Friday, the ruble made a feeble attempt to strengthen against the dollar/euro basket, but the Central Bank quickly nipped it in the bud by spending some $500 million on currency interventions. Despite the system’s strong ruble liquidity, the Central Bank persuaded speculators that the devaluation was over. Meanwhile, the Central Bank is in no hurry to slash ruble liquidity, planning to carry out two unsecured auctions this week, worth RUB 250 billion (approx. $7.5bn).

The bi-currency basket attempted to fall below RUB 38.8 on Friday, but the Central Bank interfered, restraining the ruble’s rise. As a result, the dollar/euro basket edged up RUB 0.0537, reaching RUB 38.9092. It seems that the Central Bank was involved in Friday’s trading, though it was not very active, according to Alexander Panasenko, at Metalloinvestbank. The Central Bank could have purchased up to $500 million, he estimated.

Although the Central Bank has already made it clear that there will be no further devaluation of the ruble, Shuvalov added his “verbal intervention” to the same effect on Friday, confirming that the “gradual devaluation” of the Russian currency was over, and there were no reasons for any sharp fluctuations in the exchange rate. “The ruble is within the limits set by the Central Bank. It is currently below RUB 41 against the bi-currency basket – the upper end of the trading band announced by the Central Bank,” Shuvalov was quoted as saying by RIA Novosti. “The Central Bank has delivered on all its pledges. The situation is stable. It is absolutely stable; there are no macroeconomic reasons for the current trend to change,” he explained.

Meanwhile, experts confirm that there is enough liquidity on the market, which is also shown by record low repo operations: on Friday, banks borrowed just slightly more than RUB 20 billion (approx. $600.6m) from the Central Bank. Few banks are interested in repo auctions offering overnight loans at 11.5 percent; they can borrow rubles much cheaper on the interbank markets, where interest rates hover at around 8 percent. Evgeny Nadorshin, senior economist at Trust Bank, estimates net market liquidity (bank deposits plus their correspondent accounts with the Central Bank) at RUB 550 billion (approx. $16.5bn). “We used to see much higher levels, but in relative terms, given the demand for cash, there is more than enough liquidity,” he told RBC Daily.

Given the high level of liquidity, the Central Bank could be expected to go ahead with its planned reduction of unsecured auctions. Yet the bank is in no hurry, holding two more

such auctions this week and offering RUB 250 billion (approx. $7.5bn) to banks, including RUB 150 billion (approx. $4.5bn) in six-month loans and RUB 100 billion (approx. $3bn) in five-week loans. This week, banks are due to return RUB 275 billion (approx. $8.26bn) that was borrowed in the previous unsecured auctions.

The Central Bank might restrict financing through unsecured auctions by selecting applications that offer higher interest rates, Nadorshin reckons. Interestingly, on Friday morning the Central Bank said it would auction RUB 100 billion (approx. $3bn) in six-month loans, but it changed its mind later and raised the amount by RUB 50 billion (approx. $1.5bn). Perhaps, some large banks need more cash.

Crop Sowings Up 2%http://www.themoscowtimes.com/article/1009/42/375599.htm

Russian winter crop sowings are 2 percent higher than a year ago, at 17.2 million hectares (42.5 million acres), the Agriculture Ministry said Monday.

The winter crop is in good condition, and farmers in the south started spring sowing, the ministry said.

The ministry forecasts that farmers will sow 48 million hectares with the spring crop in the marketing year that ends in June. The ministry did not provide a year-earlier figure. (Bloomberg)

State Promises $120Bln In Ordershttp://www.themoscowtimes.com/article/600/42/375593.htm

24 March 2009By Nadia Popova / The Moscow Times

The state will place orders worth 4 trillion rubles ($120 billion) with domestic companies this year as it seeks to boost the crisis-hit economy, a deputy economic development minister said Monday.

The deputy minister, Anna Popova, said 800 billion rubles in orders would go to small businesses.

"We will give ... preference to domestic producers and will pay special attention to small businesses," Popova said in a speech to a conference called "State Order-2009: Stability in Crisis."

Her comments drew immediate praise from scores of companies displaying cars, kitchen stoves and toys in hope of attracting state orders at a conference exhibition hall.

"State orders are all I can hope for," said Sergei Limonnikov, chief executive of

Nizhegorodets, which equips Ford vehicles for the police, hospitals and other services.

"I sold 50 percent fewer [vehicles] this quarter, and I hope that most of our cars this year will be bought by the state," Limonnikov said, getting out of an ambulance he equipped at the exhibition hall.

He said he planned to equip 2,100 cars this year.

Prime Minister Vladimir Putin said in December that the government would spend 27.7 billion rubles ($829 million) on vehicles and the Transportation Ministry would receive 40 billion rubles to buy equipment through a leasing company.

Smaller companies said Monday that they too were longing for the state contracts.

"We would be happy to sell almost all of our products to the state this year," said Lyudmila Balgurina, chief executive of Tula-based Children's Toy, which makes toy drums, accordions and guitars. The toy maker is struggling to survive after demand halved in the first quarter.

"We hope that kindergartens and orphanages will buy our toys this year," Balgurina said.

The Industry and Trade Ministry said earlier this month that the Kremlin, White House and government ministries would spend 1 billion rubles on buying nesting dolls and other handicrafts this year.

Companies have been begging for state orders for months, and Putin and other senior officials have promised to deliver in an attempt to revive the economy. But Finance Minister Alexei Kudrin warned earlier this month that the orders could not replace private demand and would be insufficient to get Russian companies through the crisis. He called for the government to cut taxes and red tape to boost private demand.But some companies were not counting on private demand to help them survive Monday.

"We want our drugs to be purchased for city hospitals," said Svetlana Zaikina, marketing manager at Volgograd-based pharmaceutical company Europa-Biofarm. "Tykveol, one of our drugs used to treat liver disease, costs half the price of similar foreign-made medicine. But the hospitals buy them, even though the quality of our drugs is higher and they are faster acting."

Overall financing for state orders will stay at 2008 levels, Popova said.

As competition heats up for state orders, violations have increased among companies making bids for the contracts, Federal Anti-Monopoly Service head Igor Artemyev told the conference. He said bidders have teamed up to keep prices high because the bidder offering the lowest price usually wins the contract.

"Collusions have become widespread as small companies all around the country help, as they say, the companies win state orders," Artemyev said, adding that the problem was most widespread in construction. "They just strike agreements among the bidders so that everything is actually decided before the auction."

Artemyev warned that collusion was a crime punishable by up to five years in prison under a law that would come into force at midyear.

Back in the exhibition hall, Nikolai Naumov, regional sales manager for the Perm-based Lysvensky Metals Plant, which makes electric stoves and ceramic household appliances, said his company had not received any state orders so far this year but wanted to get "as many as possible."

"Our stoves could be very good for apartments that the Defense Ministry builds for the families of servicemen," Naumov said, showing four stoves costing 7,000 rubles each that he had brought to the exhibition to sell.

With the fierce interest in state orders, Russia's Academy of National Economy will soon start offering short courses of up to three months on how to win a state order. "We have just opened enrollment and expect huge demand," academy rector Vladimir Mau said on the sidelines of the conference. "We will also train state officials how to spend the money allocated for state orders properly."

The exhibition at the Crocus Expo Center runs through Wednesday.

Business, Energy or Environmental regulations or discussions

Acron, Norilsk Nickel, Polyus, Rosneft: Russian Equity Previewhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7zDztB7SA7w

By Lucian Kim

March 24 (Bloomberg) -- The following companies’ shares may have unusual price changes in Russia trading. Stock symbols are in parentheses, and prices are from the previous close unless otherwise noted.

The 30-stock Micex Index advanced 7.3 percent to 849.82, a third day of gains. The dollar-denominated RTS Index climbed 5.8 percent to 737.19, the highest since Nov. 10.

OAO Acron (AKRN RX): The fertilizer producer won the repeal of a European Union tariff on a liquid nitrogen fertilizer as the EU reviews whether the company unfairly undercuts competitors in the bloc. Acron rose 4.7 percent to 579.46 rubles.

OAO GMK Norilsk Nickel (GMKN RX): Copper prices rose to a four-month high in New York as imports surged in China, the world’s biggest metal user. Shares in Russia’s largest mining company rose 6.4 percent to 2,480.04 rubles.

OAO Polyus Gold (PLZL RX): Gold fell for a second straight session as equities rallied worldwide, eroding the appeal of the precious metal as an alternative asset. Shares in Russia’s biggest gold miner jumped 7.7 percent to 1,438.60 rubles.

OAO Rosneft (ROSN RX): Crude oil rose to the highest in almost four months as the U.S. stock market advanced, signaling fuel use in the world’s biggest economy may rebound. Shares in Russia’s largest oil producer gained 7.1 percent to 169.13 rubles.

To contact the reporter on this story: Lucian Kim in Moscow at lkim3@bloomberg.net

Last Updated: March 23, 2009 23:00 EDT

‘Take Profits’ in Russian Stocks When RTS Nears 800, ING Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aig6BfbGRBp0

By William Mauldin

March 24 (Bloomberg) -- Investors in Russian stocks should “take profits” when the 50-stock RTS Index approaches 800, ING Groep NV said.

The RTS yesterday climbed 5.8 percent to 737.19, or 48 percent above this year’s low of 498.20. A further 8.5 percent gain would bring the index to ING’s year-end estimate of 800.

“It is not yet time for a straight-line recovery,” ING strategists Daniel Salter and Sergey Galkin in Moscow wrote in a note distributed today. “We maintain a very cautious view on the global outlook for 2009 and 2010.”

The Dutch bank’s top picks for Russia include telecommunications companies OAO Mobile TeleSystems, OAO Comstar United Telesystems and OAO Sibirtelecom, as well as OAO Rosneft, Russia’s biggest oil producer, and OAO Sberbank, its biggest bank.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

Last Updated: March 24, 2009 02:59 EDT

New List of Preferred Firmshttp://www.themoscowtimes.com/article/1009/42/375599.htm

The Industry and Trade Ministry has approved a list of 600 companies that may be

eligible to receive state funds during the economic decline, minister Viktor Khristenko told Itogi magazine in an interview published Monday.

The ministry, whose budget before the crisis reached 120 billion rubles ($3.59 billion), is already "actively" involved with a third of the companies on the list, he said.

The government separately selected 295 companies for priority access to state loan guarantees last December.

(Bloomberg)

Sanderson to appeal Russian ban of chicken planthttp://www.reuters.com/article/marketsNews/idUSN2329693220090323

Mon Mar 23, 2009 5:01pm EDT

CHICAGO, March 23 (Reuters) - Sanderson Farms Inc (SAFM.O: Quote, Profile, Research, Stock Buzz), the No. 4 U.S. chicken producer, said on Monday that it will appeal Russia's recent ban on chicken from its Hammond. Louisiana, chicken plant because the company was not using the drugs that prompted the ban.

Russian officials claimed they found residue of the antibiotic oxytetracycline and another drug nicarbazine in the meat, Sanderson Farms Chief Executive Joe Sanderson told Reuters.

"We were using neither of those products," Sanderson said.

Beginning March 27, Russia also banned chicken from Tyson Foods Inc's (TSN.N: Quote, Profile, Research, Stock Buzz) Cumming, Georgia, plant and from Peco Foods Inc's Canton, Mississippi, plant.

Russia's richest man proposes rescue plan for RBChttp://www.forbes.com/feeds/afx/2009/03/23/afx6200833.html

03.23.09, 01:16 PM EDT

MOSCOW, March 23 (Reuters) - Billionaire Mikhail Prokhorov, Russia's richest man, has offered to bail out indebted financial news provider RBC, investment bank Renaissance Capital said on Monday, boosting the media firm's stock over 30 percent.

Renaissance Capital, half-owned by Prokhorov, said it was proposing upping the share capital at RBC. The mining tycoon's Onexim investment group would buy 65 percent of the new share capital for $35 million, the bank said in a statement.

'Such a decision will not only save the business of RBC and regain the trust of advertisers, partners and employees, but also create new opportunities for the development of the company during the crisis,' said Ruben Aganbegyan, chief executive of Renaissance Capital in Russia.

RBC declined to comment on the proposal.

Renaissance Capital said the $35 million would finance operations and partial repayment of debts. A source close to RBC, who declined to be identified, estimated the company's total debt at between $200 million and $230 million.

At Friday's close, RBC's market capitalisation was about $52 million. RBC shares, which have been creeping up in recent days, soared 31.3 percent on Monday to 16.58 roubles.

Renaissance Capital said that, under its plan, creditors would be offered a three-part settlement. First, all creditors would simultaneously receive 8 percent of the total sum of their debt in cash.

They could then choose to write off 65 percent of RBC's debt with the remainder to be repaid in three years, or write off 45 percent with the remainder to be repaid in seven years.

Third, all creditors would receive a proportional stake of the company's new share capital. The total share to be held by creditors would be 10 percent of the new share capital.

Rosbank, another financial institution owned by Prokhorov, already owns 12 percent of RBC.

Prokhorov secured his place at the top of Russia's rich list by selling real estate interests and a quarter of Norilsk Nickel before the financial crisis took hold.

RBC must repay a 1.5 billion rouble ($45.05 million) bond with a $5 million coupon payment on Tuesday. Another RBC bond issue was trading at an average price of 15 percent of face value on Monday. It rose to 21 percent on the news.

(Reporting by Melissa Akin, Anton Doroshev and Olga Popova; Editing by Andrew Macdonald)

Telenor’s Motion to Stop $1.7 Billion Ruling Rejected by Courthttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6Y.94smgl20

By Maria Ermakova

March 24 (Bloomberg) -- Telenor ASA, the Nordic region’s largest telephone company, said a Russian court rejected a motion to stop execution of a ruling that found the company liable for $1.7 billion in damages.

The Federal arbitration court of the West-Siberian district rejected the company’s motion late yesterday, Telenor spokeswoman Anna Ivanova-Galitsyna said by telephone today. The Eighth Appellate Arbitrazh Court in Omsk on Feb. 20 found Telenor liable for $1.7 billion in damages in a suit filed by Farimex Products Inc.

The case is one of several court battles between Telenor and Russia’s Alfa Group as they fight for control of OAO VimpelCom, Russia’s second-largest mobile company, and Ukraine’s ZAT Kyivstar GSM. A Russian bailiff this month seized Telenor ASA’s 29.9 percent stake in VimpelCom as part of the Omsk court decision.

Telenor has filed a cassation appeal of the decision and the appeal will be heard on May 26, Ivanova-Galitsyna said.

To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net.

Last Updated: March 24, 2009 03:10 EDT

Telenor says stay motion rejected by Russian courthttp://www.reuters.com/article/rbssTechMediaTelecomNews/idUSOSO00150120090324

Tue Mar 24, 2009 4:47am EDT

OSLO, March 24 (Reuters) - Norwegian telecom Telenor (TEL.OL: Quote, Profile, Research, Stock Buzz) said on Tuesday that its motion to delay the implementation of a Russian court ruling has been rejected and repeated it had no intention of paying the $1.7 billion claim.

"On Friday we sent a motion for a stay, pending our appeal... and that motion was denied yesterday," Telenor spokesman Dag Melgaard told Reuters. Telenor's appeal of the Russian case has been set for May 26.

Telenor repeated that the Russian court, which has seized its 29.9 percent voting stake in Russia's No. 2 mobile operator VimpelCom (VIP.N: Quote, Profile, Research, Stock Buzz), could still sell-off the shares.

"The whole process depends on this (ruling) being notified properly to us, and it still hasn't," he said, adding that Telenor will have some five days to pay the claim after receiving proper notification.

"With the attention that this case has created in the media and in government circles, we hope that nothing will happen until the appeal. But, as we have said repeatedly, we are still worried that things may happen that are out of our control."

(Reporting by Wojciech Moskwa)

Norilsk Tumbles Most in a Month After Report of Russian Inquiryhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=asGRPxtkTSCI

By William Mauldin

March 24 (Bloomberg) -- OAO GMK Norilsk Nickel, Russia’s biggest mining company, fell the most in a month after a report that Deputy Prime Minister Igor Sechin is inquiring about the company’s finances.

Sechin sent a letter demanding an explanation of Norilsk’s spending 86 billion rubles ($2.6 billion) on a share buyback, giving up control of its pension fund and selling mining licenses to a company owned by former Chief Executive Officer Mikhail Prokhorov, the Vedomosti newspaper said, citing two unidentified people close to the company.

“News of such a broad range of government investigation is likely to put strong pressure on the stock,” UniCredit SpA analysts Marat Gabitov and George Buzhenitsa said in a note.

Norilsk shares plunged as much as 10 percent to 2,233.30 rubles as of 11 a.m. in Moscow, falling from a four-month high. Erzhena Mintasova, a spokeswoman for Norilsk, couldn’t immediately be reached for comment on her mobile phone.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

Last Updated: March 24, 2009 04:11 EDT

Russian authorities to scrutinize Norilsk Nickel deals - paper http://en.rian.ru/business/20090324/120705581.html

MOSCOW, March 24 (RIA Novosti) - Russian authorities have decided to examine the financial position of Norilsk Nickel and its transactions carried out in favor of shareholders, a business paper said on Tuesday.

According to Vedomosti, Deputy Prime Minister Igor Sechin, who oversees Russian industry, has along with the country's Audit Chamber, state-controlled Vnesheconombank and VTB Bank raised questions over the metal giant's

transactions. Billionaire Alisher Usmanov, the owner of Metalloinvest, has threatened to sue Norilsk Nickel.

Sechin's letter to Vladimir Strzhalkovsky, general director of Norilsk Nickel, was received by the company in early March, two sources close to the company and its shareholders told Vedomosti.

In his letter, the deputy premier requested that the Norilsk Nickel management disclose the company's current budget and details of several large transactions with shareholders that began in the second half of 2008 and were concluded in early 2009, the paper said.

According to the paper, Norilsk Nickel spent about 86 billion rubles ($.26 billion at the current exchange rate) to purchase shares and assets from its shareholders.

Government officials stressed the strategic importance of Norilsk Nickel, which provides large numbers of jobs in several Russian cities, and concerns that the value of the company's stake pledged to the government amid the financial crisis may further decline, the paper said.

Also, the government wants to check information that the company's entrepreneurial activities serve the interests of a narrow group close to the Norilsk Nickel management, and also reports that the metals giant is illegitimately spending money and assets, the paper said.

Norilsk Nickel said in its reply to Sechin's letter that all transactions had been performed in compliance with legislation and the company's charter, Vedomosti reported.

Vedomosti

Renault may block additional issue of AvtoVAZ shares

http://en.rian.ru/analysis/20090323/120698700.html

Renault could try and block the Russian government's plan to issue additional shares in order to help Russia's largest carmaker, AvtoVAZ. The French company does not have the money for this, and has no desire to tolerate the dilution of its stake in AvtoVAZ.

The Russian carmaker wants to get 26 billion rubles ($778 million) from the state, but state guarantees, which have been stipulated at 10 billion rubles per automaker, are insufficient. To help the company, the government is considering an additional share issue, which will entail increasing the market value of the Russian Technology Corporation, which holds a 25% plus one share stake in AvtoVAZ.

First Deputy Prime Minister Igor Shuvalov said the company's shareholders, including Renault, would have an opportunity to contribute funds during the additional share issue.

However, this mechanism is not to the French company's liking.

Christian Esteve, a member of Renault's Management Committee in charge of its Russian division, said the idea was brilliant theoretically, but Renault as a shareholder would not be happy with the dilution of its stake in AvtoVAZ.

He said the French company supported government assistance, but the issue of an additional share issue "should be considered thoroughly and in detail." Esteve said Renault did not have any plans to inject money directly into AvtoVAZ.

Renault owns a blocking stake in the Russian carmaker and could therefore stop the additional share issue.

The Russian Technology Corporation has refused to comment, while a spokesperson for AvtoVAZ said the additional share issue was one of several assistance plans currently being discussed in the government.

Shuvalov said the government could find "other ways of making AvtoVAZ debts manageable."

Renault bought a blocking stake in AvtoVAZ last year for $1 billion. It lost 117 million euros last year due to the revaluation of the Russian company, whose current capitalization is $285 million.

Yelena Sakhnova, an analyst with VTB Capital, said the stake in AvtoVAZ secured the French company a share in the Russian market, and so the Russian authorities may still convince Renault to allow an additional share issue. They could agree on the issue of preference shares, but AvtoVAZ already has 25% of them, the limit set by legislation.

Sakhnova said Renault could pay for the additional share issue with equipment or technology.

Aeroflot stakeholder will fight removal of CEOhttp://www.reuters.com/article/managementIssues/idUSLN41791220090323

Mon Mar 23, 2009 10:00am EDT

* Tycoon Lebedev's NRC to vote against removal of CEO Okulov

* Says its 30 percent stake not enough to block state order

* Proposal could come to vote at March 26 board meeting

By Anton Doroshev

MOSCOW, March 23 (Reuters) - Aeroflot's (AFLT.MM: Quote, Profile, Research, Stock Buzz) largest private shareholder said on Monday it would oppose the chief executive's removal -- which could be proposed at the March 26 board meeting -- but added that it cannot stop the move alone.

Leonid Dushatin, the Aeroflot board member representing 30-percent stakeholder NRC, said it would damage the company to unseat Valery Okulov in the middle of the financial crisis.

"This decision is madness. It's like putting out a fire with kerosene," Dushatin told Reuters. "There is no reason to do this right now."

Earlier this month, Transport Minister Igor Levitin offered Okulov a job as one of his six deputies, a relatively low-profile post for a decorated pilot who heads a blue-chip company and has 34 years of experience in civil aviation.

One of Levitin's serving deputies, Andrei Nedosekov, told Reuters last week that the ministry was determined to hire Okulov away from Aeroflot soon.

Okulov, however, has said he is dedicated to his job and it is too early to discuss his departure. "(Aeroflot) is not just a transitional phase in my life. It is my life," Russia's Vedomosti business daily quoted him as saying last week.

An independent member of Aeroflot's board, Sergei Aleksashenko, said on Monday that the question of removing Okulov was not yet on the agenda for the March 26 meeting. But the government could enter it at any time, he added.

The government owns 51 percent of Aeroflot, Russia's flag carrier, while 30 percent is owned by the National Reserve Corporation (NRC) of media and banking mogul Alexander Lebedev.

Dushatin said he would vote against any proposal to unseat Okulov, the politically connected son-in-law of Russia's first president, Boris Yeltsin.

Asked if his vote would be enough to block the decision, Dushatin said: "Unfortunately not".

The favourite candidate to replace him has been named by the Russian media as Vitaly Savelyev, a former deputy economy minister who now works at services conglomerate Sistema (SSAq.L: Quote, Profile, Research, Stock Buzz).

Savelyev's total lack of experience in the aviation sector has raised concerns among industry analysts.

Okulov has spent more than a decade turning Aeroflot from an loss-making Soviet-era behemoth into a modern airline. His personal and political contacts have accounted for much of the firm's lobbying power in a heavily regulated industry.

Also on Monday, Aeroflot confirmed its bid to acquire more than 90 percent of national Czech airline CSA. [ID:nLN427113] (Writing by Simon Shuster; Editing by Jon Loades-Carter)

Activity in the Oil and Gas sector (including regulatory)

Belarus Seeks to Slash First-Quarter Gas Price, Kommersant Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUeEajP2.Q0c

By Denis Maternovsky

March 24 (Bloomberg) -- Belarus is in talks with Russia’s natural-gas export monopoly OAO Gazprom to cut the price it pays for the fuel in the first quarter by 30 percent to $148 per 1,000 cubic meters, Kommersant reported.

The former Soviet republic proposed returning to paying an average price for the year as opposed to a quarterly adjusted one, the Russian newspaper reported, citing two unidentified Gazprom officials.

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

Last Updated: March 24, 2009 02:09 EDT

International consortium will not operate Ukraine's gas transport system-officialhttp://www.interfax.com/3/481416/news.aspx

KYIV. March 24 (Interfax) - The cooperation plan to renovate theUkrainian gas transportation system (GTS) signed in Brussels is theoptimal one, whereas the idea of setting up an international consortiumthat will rent and manage the GTS is unacceptable for Ukraine, saidBohdan Sokolovsky, Ukrainian presidential envoy for energy issues. "Russia has its own vision, its own concept of the Ukrainian GTS.This is how they see it: they want - and they are not hiding it - to co-own the Ukrainian GTS, such are the terms Russia is willing to cooperateon. While this approach is unacceptable for Ukraine, Europe is offeringsomething that is acceptable for us," Sokolovsky told the UkrainianChannel 5 television on Monday. Russia is no less concerned about how reliably the Ukrainian GTSwill operate, but the question how to modernize it should be primarily

decided by Ukraine, he said. Russian gas exports and manufacturers of the equipment needed tomodernize the GTS will be invited to take part in the implementation ofthis project, Sokolovsky said. "I am convinced that Russian companieswill no doubt find their place in this project," he said. "But our system is ours, and our GTS must be integrated inEurope's, this question has also been decided politically. This is ourstrategy, this is part of Ukraine's European integration," Sokolovskysaid.

Gazprom

Gazprom loses powerful European lobby

http://en.rian.ru/analysis/20090323/120698700.html

Kommersant  

The resignation of Hungarian Prime Minister Ferenc Gyurcsany, which is due to be announced today, came as an unpleasant surprise for Moscow. Of all the European politicians, Gyurcsany was one of the most active advocates of the South Stream pipeline project.

The drop in European political support for the Gazprom-initiated project, along with the monopoly's tight financial situation, could tangibly slow down the project's implementation.

"South Stream has, among other things, a political goal of torpedoing the EU's Nabucco plan," said Mikhail Krutikhin, a partner in Moscow's RusEnergy Consulting.

"Gazprom's Blue Stream was built for a similar purpose, to counterbalance another European pipeline project, Baku-Tbilisi-Erzurum. However, the link to Erzurum was laid anyway, and Blue Stream has insufficient traffic," the analyst went on.

To date, preparations for construction of South Stream have cost the Russian gas giant several billions of dollars. Meanwhile, most analysts question the economic feasibility of gas routes bypassing Ukraine, Belarus and Moldova.

"Gas production is falling in Russia, not growing, and new pipelines are designed to take some of the load off the old ones, and not to ship some hypothetical "new" gas," Krutikhin said.

"It could be more profitable for Russia to make deals with the transit countries, even to make concessions, than to replace them with Germany and Bulgaria," he added.

Former German chancellor Gerhard Schroeder spared no effort in promoting Nord Stream, another Gazprom-led project to lay a pipeline across the Baltic Sea, despite his EU colleagues' pressure. His loyalty was rewarded with a top position with a Gazprom-affiliated company along with handsome compensation.

It is possible that Gyurcsany will follow in his tracks. A top position at South Stream AG, registered by Gazprom and Italian ENI on January 18, 2008, in the Swiss region of Zug, is still open. Gazprom CEO Alexei Miller offered the job to Romano Prodi last April, but the former Italian prime minister who lost his post after early elections tactfully declined.

Hungary's prime minister, who resigned after facing mounting criticism over his government's handling of the country's economic crash, might prove more accommodating.

Gazprom to eliminate threat of rival EU suppliershttp://www.neurope.eu/articles/93582.php

Author: Kostis Geropoulos23 March 2009 - Issue : 826With Gazprom‘s gas exports dropping almost 50 percent since the start of the year, the Russian gas monopoly’s energy swap deal with Iran makes economic and strategic sense. Following a mid-March meeting, Russian Energy Minister Sergei Shmatko and Iranian Oil Minister Gholam Hossein Nozari signed a hydrocarbon memorandum that allows swap operations to Gazprom, which will deliver Turkmen gas purchased by Russia at a premium price to northern Iran in exchange for gas deliveries from southern Iran to Gulf countries. “(The agreement) seems to be rather attractive from the economic point of view especially now with the stagnating gas demand in EU and Russia,” Tatiana Mitrova, head of Moscow’s Centre for International Energy Markets Studies at the Russian Academy of Sciences, told New Europe on March 19.Russia sits on the largest natural gas reserves in the world, nearly double that of Iran, which has the second-largest gas reserves. There are various options under consideration in the Russia-Iran swap deal signed on March 15. For instance, Gazprom may exchange Turkmen gas for crude, gas condensate, liquefying natural gas or other types of fuel from southern Iran. Northern Iran has a major deficit of energy resources and no infrastructure for carrying hydrocarbons from southern areas. There are several options in gas supplies to northern Iran, including the Turkmen gas pipeline and the gas pipeline from Azerbaijan, which is not being used at present. However, Azeri officials said this first requires signing of a respective inter-governmental agreement and agreeing on the transit fee.Iran and Turkmenistan engaged in one of the nastiest natural gas pricing disputes in recent memory in 2008 (Energy Insider 766, Central Asian gas chain reaction won’t reach the EU).Even though Turkmenistan and Iran took steps in recent months to put the dispute behind them, Ashgabat will likely be happy not to have to deal directly with Tehran. The memorandum may also allow Russia to gain leverage over Turkmen gas

exports, foiling the European Union’s diversification efforts (Energy Insider 752, Putin wants Iran and Caspian in his pocket).

While the dispute over Iran’s nuclear programme has prevented the EU from considering Iranian participation in the Nabucco pipeline, Russia has no qualms about increasing energy cooperation with Tehran. “It is a strategic issue. One of the things we are looking at is exports — how badly Gazprom exports have fallen in the first twoand- half months of the year,” Ron Smith, chief strategist at Moscow’s Alfa Bank, told New Europe. “If more suppliers came on board — Iran, etcetera — that were not linked strategically with Gazprom that would be a big threat to Russian exports overall,” Smith said.

The Russian-Iranian memorandum envisages the opportunity for Gazprom to take part in the construction of facilities for LNG in Iran as part of the South Pars project. Russia wants to increase its involvement in the Iranian field, which is one of the biggest gas fields in the world, while Tehran desperately needs investment in its energy infrastructure (Energy Insider 791, Gazprom to fill Iran’s investment vacuum). Meanwhile, increased Russian-Iranian energy cooperation could benefit Tehran by making it more difficult for the international community to tighten economic sanctions connected to the Iranian uranium enrichment dispute.Generally, this Russian deal with Iran is much more about Russia- Iranian cooperation development that about any sorts of competition with the other projects, Mitrova said. Asked if the memorandum could help Russia preserve a stranglehold on natural gas exports to the EU by undermining Nabucco, she said, “Russia doesn’t need any special efforts regarding Nabucco.” The Russian economist noted that the financial future of the EU-backed pipeline remained uncertain “due to the absence of gas for it.”

Ukraine gas pipeline modernization could cost $16 bln – Gazpromhttp://en.rian.ru/world/20090323/120699191.html

BRUSSELS, March 23 (RIA Novosti) - The modernization of Ukraine's gas transportation system could cost $16 billion, not the some $3 billion suggested by European Commission experts, a Gazprom deputy chairman said Monday.

The European Commission and Ukraine signed a joint declaration Monday on the modernization of Ukraine's gas pipeline network. The Commission estimated the cost of the necessary improvements at 2.5 billion euros ($3.4 billion), while Ukrainian Prime Minister Yulia Tymoshenko put the figure at twice that amount.

"Three billion dollars is just the initial figure," Valery Golubev said after Monday's international investment conference in Brussels.

Russian Energy Minister Sergei Shmatko said on Monday that Russia had been effectively excluded from the talks because the conference, convened by the European Commission, was limited to the bilateral format of discussions between Ukraine and the EU.

"While recognizing the urgency of the task to modernize [the Ukrainian gas transportation system] and expressing a readiness for any format - bilateral or trilateral - to participate in this work, we were forced to express our bewilderment with the fact that Russia was practically excluded from the discussion of this issue, which is very important for all of us," he said.

However Ukrainian news agency Unian said Kiev and Brussels intended to involve Moscow in the modernization if Russia wanted to take part in the project.

"Ukraine, just like the European Union, has the definite intention to attract Russia as a partner in this large reconstruction and modernization program," Prime Minister Yulia Tymoshenko said.

Shmatko also said Russia had proposed signing a three-way deal with Ukraine and the European Union on modernizing the Ukrainian gas transportation system.

He said that high-placed officials from the European Commission who attended the conference had agreed with Russia's proposal.

President Viktor Yushchenko said on Monday Ukraine would soon join the treaty on the common European energy system.

"Ukraine will soon join the treaty on a common European energy space. I am convinced that its integral part will be the whole Caspian-Black Sea-Baltic energy transit environment," Yushchenko said in Brussels.

After January's gas dispute between Ukraine and Russia, that saw gas deliveries to Europe suspended, European Commission President Jose Manuel Barroso said the EU was interested in uniting Europe's and Ukraine's energy systems.

Russia's transit disputes with its former Soviet neighbors have raised concerns in Europe about a dependence on Russia for energy supplies.

Russia cut off gas supplies to Ukraine on January 1 after failing to reach a deal over debt and prices for 2009 in late December, and later halted gas deliveries to Europe, saying Ukraine was stealing transit gas. Kiev denied the accusation.

Yushchenko also said in Brussels that Ukraine planned to install new gas measuring equipment and build new gas measuring stations as part of the modernization of its gas transportation system.

Negotiations between Bulgaria and Gazprom are under way http://www.focus-fen.net/index.php?id=n175169

23 March 2009 | 14:18 | FOCUS News Agency

Moscow. Negotiations between Bulgaria and Russian energy giant Gazprom are under way, AHA-MPA informs.Bulgarian Minister of Economy and Energy Petar Dimitrov considered in Moscow with Gazprom representatives the tenor of new documents for natural gas delivery. It is said in massage of Bulgarian Ministry of Energy attentions of both countries was pointed at the issue about gas deliveries to Bulgaria without mediators. Dimitrov pointed after the meeting with Russian Minister of Energy Sergei Shmatko contracts without mediators will lead to decrease of gas price.The two ministers considered the issue on financing Belene NPP project, agency informs.

Financial crisis takes Gazprom off the boilhttp://www.abc.net.au/lateline/business/items/200903/s2524173.htm

Australian Broadcasting Corporation

Broadcast: 23/03/2009

Reporter: Scott Bevan

If the term 'cooking with gas' could be applied to any country's economy, it would be Russia's. During the eight years of Vladimir Putin's presidency, Russia became the world's largest natural gas producer and exporter. Taking the lead was Gazprom, Russia's state-controlled energy giant. But the financial crisis has taken Gazprom off the boil, prompting some analysts to question the influence of the state on the company.

TranscriptALI MOORE, PRESENTER: While oil has made the Gulf states rich, Russia has been able to cash in on huge reserves of natural gas.

During the eight years of Vladimir Putin's presidency, Russia became the world's largest natural gas producer and exporter.

However, now Gazprom, Russia's state controlled energy giant, is reeling from the financial crisis. Some analysts are questioning the influence of the State on the company. Moscow correspondent Scott Bevan reports.

SCOTT BEVAN: In a country whose growth has been fuelled by oil and gas, Russian companies don't come bigger or are more influential than Gazprom.

VALERY NESTERO, GAS ANALYST, TROIKA DIALOG: Gazprom secures 25 per cent of world gas reserves. 20 per cent of total gas output

SCOTT BEVAN: If Gazprom has been good for the Russian government, the government has been good to Gazprom. This State controlled giant produces more than 80 per cent of Russia's natural gas and has had exports and some key infrastructure pretty much to itself.

By extracting the wealth that lies beneath this vast land, Gazprom is heading for the sky.

Then the global financial crisis hit.

ALEXEY BELOGORYEV, NATURAL MONOPOLIES RESEARCH INST (translation): The share capital of Gazprom has fallen four times since the summer of 2008.

SCOTT BEVAN: Share prices are not all that's falling. Gazprom's output was down in February from a year ago, dropping 16 per cent, indicating that customers, particularly in Europe, are cutting back on consumption. Making matters worse, gas prices are expected to fall as well.

SERGEY KUPRIYANOV, GAZPROM (translation): Of course the crisis has touched everybody. Gazprom is no exception.

SCOTT BEVAN: Despite the crisis, and grappling with a reported $US50 billion debt, Gazprom spokesman Sergey Kupriyanov insists the company is in good shape pointing to figures in the last three quarters of 2008

SERGEY KUPRIYANOV (translation): The net income is about 750 billion roubles.

SCOTT BEVAN: That's about $US22 billion.

Still, analysts say the crisis could pummel Gazprom's earnings and its investment plans at a time when the company needs to develop new fields.

ALEXEY BELOGORYEV (translation): By 2020 Gazprom should invest about $500 billion into gas production and transportation.

That's a big amount for any company. With the crisis hitting Gazprom revenue, that makes it difficult to attract investment and complete its investment program for 2009 to 2011.

SCOTT BEVAN: Gazprom's Sergey Kupriyanov admits while some projects may need to be reviewed those at the top of the list, including two new major pipelines to carry Russian gas to Europe, will continue.

The company says it’s not relying on a government bailout, but instead taking bank loans, a move that may include State banks.

SERGEY KYPRIYANOV (translation): We don't speak of governmental support. We have a borrowings program which consists of 90 billion roubles for this year.

SCOTT BEVAN: Analysts say no matter how much the markets buffet Gazprom; the

company will always enjoy State protection, even financial support, to ensure it's secure.

For Gazprom not only has enormous influence on the Russian economy, it can be also used as a very powerful political instrument.

The relationship between Russian gas and politics was evident during a dispute with Ukraine earlier this year.

SERGEY KYPRIYANOV (translation, archival footage): Starting from 10 in the morning, gas delivery to Ukraine have been cut by 100 per cent.

SCOTT BEVAN: When Moscow accused its neighbour of accusing EU bound gas being transited across Ukraine, it cut those deliveries as well. Now that sent a chill through many parts of Europe as they were reminded of just how reliant they were on Russia. 25 per cent of the EU's gas comes from Gazprom.

Indicating this was more an a commercial dispute, Russian Prime Minister Vladimir Putin was often seen calling the shots, then signing the agreement to get the gas flowing again.

Valery Nestero says Gazprom's cosy relationship with the government isn't necessarily good for business or for the industry itself.

VALERY NESTERO (on screen text): This causes problems for independent gas producers, who hold very large chunks of Russian gas reserves but can't develop them.

SERGEY KYPRIYANOV (translation): We think the scheme we have, partially with private investors, partially with State involvement, helps find the optimal balance. From one side we use the possibilities given to us as a company with State participation, from the other side our investors push us to be more efficient, more open, and that's a plus for the business.

SCOTT BEVAN: Even in the face of economies continuing to suffer, falling gas prices and a growing urgency to find alternative energy sources, Troika Dialog's bank's Valery Nestero believes Gazprom's future is stable.

VALERY NESTERO (on screen text): There is a Russian joke. The future is always bright, only the past is unpredictable. But I think Gazprom has a reliable future, secured by resource, management funds, state support for at least the next 20 years.

ALI MOORE: Scott Bevan reporting there.