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Basic Political Developments  RBC: Russia's investment in Greece exceeds that of Greece several-fold - The amount of Russia's investments in Greece was 3.8 times higher than those made by Greece into Russia in 2009, Transportation Minister Igor Levitin announced at a meeting of the Russian-Greek council on cooperation and investments today.  RBC: Gazprom to sign South Stream accord with Greek operator - According to the document, Gazprom and DESFA will create a joint venture on a parity basis, which will be responsible for the construction and use of this stretch of the gas pipeline.  ISNA: Top MP stresses Iran's review of ties with Russia - Jalali told ISNA that Russia's recent stance on Iran's nuclear drive goes against Iran's strategic view on the country.  News.az: There is no tension between Iran and Russia, Ahmadinejad  RIA: Russian experts finish look at probe of S. Korean warship sinking  Yonhap: (LEAD) Russian experts end probe of sunken S. Korean ship  Russia Today: Seoul-Pyongyang tension affects whole Asia-Pacific region – Moscow: Meanwhile, Russian Deputy Prime Minister Sergey Ivanov has stressed that the international community has to be very careful when accusing North Korea, as too much pressure can make a confrontation more likely.  Aysor: CSTO special units to hold exercises to fight terrorism - First stage of training exercises of units of the special operative forces of the CSTO states will take place from June 7 to June 11. Among participants are units from Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The training exercises will be held at the Kadamovsky Training Centre of the North Caucasus regional command of the home forces of the Russian Interior Ministry.  RIA: Russia sends drugs chief to German conference on Afghanistan - Russia's drug control chief, Viktor Ivanov, will talk about Afghanistan and global security at the Berlin part of the conference, titled Central Asia and Afghanistan: Problems and Solutions.  Rossiyskaya Gazeta/Russia Today: Millions of small doses - Chairman of the State Anti-Narcotics Committee and the head of the Federal Drug Control Service, Viktor Ivanov, in a special interview with Rossiyskaya Gazeta (RG), discussed how Russian President Dmitry Medvedev’s important initiative, to create an international coalition against the Afghan drug threat, will be embodied.  Eurasianet: Is Moscow Ready to Act on Trans-Tajik Drugs? - Moscow is beefing up its anti-drug rhetoric, taking aim at NATO’s inability to stem the flow of opiates northward out of Afghanistan. And Tajikistan looks like a target for the Kremlin’s interdiction plans.  VOR: Russian naval squadron ends its mission in Gulf of Aden  RIA: Russian task force concludes anti-piracy mission off Somalia  Thenews.pl: Russia denies Smolensk credit card theft - The Russian Interior Ministry has denied reports in the Polish media on Sunday that three Russian members of the notoriously corrupt OMON special forces have been arrested after they stole a credit card belonging to a victim of the Smolensk air crash disaster.  EUobserver: Germany and Russia call for new EU security committee  Moscow Times: Germany, Russia Propose New Security Committee  Reuters: Putin calls for a Russian metals exchange - Russian Prime Minister Vladimir Putin has called on regulators to create plans for a national metals exchange by Aug. 1, a move intended to avert price rows between producers and industry, Vedomosti reported.  VOR: Jacques Rogge content with preparations for Sochi Olympics  RIA: Putin to discuss 2014 Winter Olympics with IOC chief  Vedomosti/Russia Today: Sochi awaits for Formula One  RIA: Russia, Brazil start visa-free travel  Arka: Russia is largest foreign investor in Armenian economy  Zawya: Islamic funds urged to tap Russia, CIS market - Islamic fund managers and investors in the Middle East should turn their attention to more than 65 million Muslims in Russia and the Commonwealth of Independent States (CIS) while the region's banks investigate the potential of offering Shariah-compliant products for overseas investors and local consumers, said a senior official of Amanie Islamic Finance consultancy.  Vancouver Sun: Russia dusts off old plans to open the Northeast Passage for sea trade with Asia - This route runs from the Barents Sea north of Norway and the Russian port of Murmansk -- a city, incidentally, attacked and burned by a Royal Navy captain ancestor of this writer during the Crimean War -- along the Arctic coast of Siberia and down through the Bering Strait to Asia.  China Post: Russia determined to get EAS membership - Last month Russian ambassadors in all ASEAN member nations sent a diplomatic note to their governments reiterating Moscow's desire to become a member of East Asian Summit (EAS). Moscow's unusual move, which came as the ASEAN leaders are discussing the future of regional architecture, demonstrated its unwavering intention to join the high-powered regional forum led by ASEAN.  Interfax: Dushanbe protests against Zhirinovsky, Onishchenko comment on polio outbreak  Itar-Tass: Serviceman of interior troops injured in Chechnya  Interfax: Militant killed in Karachayevo-Cherkessia  RIA: Russian airliner makes emergency landing at Siberia airport - A Russian airliner was forced on Monday to make an emergency landing after its landing gear caught fire during the take off from the Novosibirsk airport. The Boeing 737- 400 plane of the Russian air carrier Transaero circled over the city of Novosibirsk for two hours to burn extra fuel and ensure the safe landing at the departure airport.  Itar-Tass: Boeing plane with burning landing gear safely lands in Novosibirsk  Bloomberg: Raspadskaya Managers Concealed Fire Before Blast, Interfax Says  Itar-Tass: Andrei Parkhomenko of UR leading in Birobidzhan mayor election  RIA: Eurasia highest volcano erupts in Russia's Far East - Eurasia's highest volcano on the Kamchatka Peninsula in Russia's Far East has shown again signs of intensified activity throwing clouds of smoke and ash into the air to a height of 2.5 kilometers.  RIA: BP calls for Russian mini-subs to tackle oil spill - paper  RIA: BP's reputation tarred by oil spill - Russian paper  Upstreamonline: Medvedev calls for global spill fund - Russian President Dmitry Medvedev has called on the world's leading economic powers on to consider creating a fund to insure against large-scale environmental disasters like the Gulf of Mexico oil spill.  Kremlin: The environment and the economy do not contradict each other. A properly functioning economy is an environmentally friendly economy - New entry on Dmitry Medvedev's blog concerns environmental challenges.  Moscow Times: Putin Wants Russians to Move - Prime Minister Vladimir Putin has ordered federal agencies to simplify the rules for internal migration in a move that could help laid-off Russians to land jobs elsewhere in a country with extremely low labor mobility.  Bne: Unemployment and demographics prompt residency rule reworking  VOR: Press review

National Economic Trends  Interfax: RUSSIAN RESERVES INCLUDE SPANISH SECURITIES, BUT CENTRAL BANK ESTIMATES RISK OF DEFAULT AT NEAR ZERO – CENTRAL BANK DEPARTMENT DIRECTOR SHVETSOV  Reuters: Weak oil drags Russian rouble down to 9-mth low  Bloomberg: Europe Crisis Shows More Reserve Currencies Needed, VTB Says  Alfa: Higher inflation in May confirms economic recovery; POSITIVE  VTB Capital: CBR surprisingly registers capital inflows in May

Business, Energy or Environmental regulations or discussions  Bloomberg: Rosneft, Raspadskaya, Sberbank: Russian Equity Market Preview  Bloomberg: Russia’s RTS Declines; Lukoil, Sberbank, Gazprom Retreat  Bloomberg: Russia Stocks Fall Most in 2 Weeks on Oil, Economy; Ruble Drops  Emerging Markets: Investors seek 20% discounts on Russian IPOs  Reuters: UPDATE1 – Petropavlovsk mulls Hong Kong iron ore listing  Moscow Times: GE, Russia Discuss Power, Health Care Investment  VTB Capital: Putin suggests developing exchange trade of metal products and raw materials in Russia  Steel Guru: Petropavlovsk weighs up iron ore options  Steel Guru: Russia coking coal exports in Q1 double  Steel Guru: Sberbank becomes major shareholder in two plants owned by MAIR  Reuters: Russian car maker Sollers posts bigger '09 net loss  Process Control Today: Aker Solutions awarded contract for chlorine dioxide plant in Russia  UralSib: RBC: Onexim acquires 51% stake in RBC-TV Moscow for $80 mln  Moscow Times: For the Record  The Energy Ministry sees oil output at offshore fields reaching 14.5 million metric tons this year (290,000 barrels per day), while gas produced offshore will likely hit 18 billion cubic meters, Deputy Energy Minister Sergei Kudryashov said Friday. (Bloomberg)  Russia saw “insignificant” capital inflow in May, Central Bank First Deputy Chairman Alexei Ulyukayev said Friday, Interfax reported. (Bloomberg)  Ukraine paid more than $730 million for gas supplies from Gazprom for the month of May on time and in full, state energy company Naftogaz Ukrainy said Friday. (Bloomberg)  Bne: Banking on gold - Russian bank Uralsib has come up with a new strategy that aims to profit from mounting fear of a second wave to the global crisis. As the euro loses its value against the dollar and the ruble stutters from falling oil prices, the bank is offering customers the option of abandoning money altogether and opening accounts denominated in gold.  Russia Today: 4G battle heats up - The military says the operators are going a bit too fast, and haven’t used all the resources available for 3G technology. So there’s no need, they say, to be asking for access to 4G frequencies

Activity in the Oil and Gas sector (including regulatory)  RIA: Russia to toughen rules on oil, gas extraction - Russia will toughen up environmental safeguards on oil and gas extraction, including offshore drilling, Deputy Prime Minister Igor Sechin said on Saturday. Moscow Times: Novatek Won't Get Gas Export Rights  Oil and Gas Eurasia: Rosneft Commences Drilling With Crescent Petroleum in Sharjah Concession  Oil and Gas Eurasia: Sintez Group Set To Exits Russian Arctic Shelf  Moscow Times: Siberia's Oilpump Services Is Bought by Baker Hughes  Moscow Times: Integra Sells Rig Maker  VTB Capital: LUKOIL's AGM to approve USD 5bn loan from Sberbank

Gazprom  Oil and Gas Eurasia: Gazprom Plans Agreement With Greek DESFA On South Stream  Interfax: Gazprom reduces gas production below 1.1 bcm a day - As recently as June 1 production was 1.109 bcm. Production fell to 1.096 bcm on June 2, although that was still 20.3% more than on the same day last year.  Reuters: Gazprom sees no need for BP's Kovykta gas-UPDATE 1 - Comment comes as TNK-BP pushes Kovykta into bankruptcy; Gazprom says has other fields to supply China  RBC: Gazprom: Gas from Kovykta will not be in demand  Crain’s Manchester Business: Gazprom takes control of Wilmslow smart meter firm  Oil and Gas Eurasia: SOGAZ To Insure Gazprom Neft Shelf Vessels ------

Full Text Articles

Basic Political Developments

RBC: Russia's investment in Greece exceeds that of Greece several-fold http://www.rbcnews.com/free/20100607115912.shtml

RBC, 07.06.2010, Moscow 11:59:12.The amount of Russia's investments in Greece was 3.8 times higher than those made by Greece into Russia in 2009, Transportation Minister Igor Levitin announced at a meeting of the Russian-Greek council on cooperation and investments today. He indicated that the total amount of Greece's accrued investment in Russia amounted to $44m as of the end of last year, including nearly $26m in direct investments. At the same time, Russia invested "significantly more" in Greece - over $166m. "We hail Greece's investment in Russia and hope that our actions are equally welcomed. We are primarily interested in attracting funds for the production sector, transportation, agricultural industry, food production and innovations," Levitin said. According to him, Greece is currently investing in transportation and communication industries, real estate transactions, retail and whole sale trade, and the financial sector. Meanwhile, the minister stressed that Greece is rated among Russia's top 30 trade partners. Annual trade between the two countries jumped 72 percent to about $1bn in the first quarter of 2010 compared to Q1 2009.

RBC: Gazprom to sign South Stream accord with Greek operator http://www.rbcnews.com/free/20100607103944.shtml

RBC, 07.06.2010, Moscow 10:39:44.Gazprom is poised to sign an agreement with Greece's DESFA (the operator of the national gas transporting system) on the construction of the South Stream gas pipeline's stretch in Greece. According to the document, Gazprom and DESFA will create a joint venture on a parity basis, which will be responsible for the construction and use of this stretch of the gas pipeline. As reported earlier, Greece joined the South Stream project in 2008. ISNA: Top MP stresses Iran's review of ties with Russia http://www.isna.ir/ISNA/NewsView.aspx?ID=News-1552877&Lang=E Service: Islamic Parliament 1389/03/17 06-07-2010 12:18:10 News Code :8903-10421

ISNA - Tehran Service: Islamic Parliament

TEHRAN (ISNA)-The Rapportuer of Iran's Parliament National Security and Foreign Policy Commission Kazem Jalali stressed Iran's review of ties with Russia.

His remarks came after Russia changed its stance on Iran's nuclear issue, supported resolution on the country, but rejected to back Tehran's trilateral declaration.

Jalali told ISNA that Russia's recent stance on Iran's nuclear drive goes against Iran's strategic view on the country.

He also highlighted Iran-Russia close view on power structure in the international stage and said, "Iran has always stood against the US unilateralism and called for other powers to play a role in the international scene, but it seems that stance of Russian President and some other officials on Iran's nuclear plan shows that Russians are taking the same radical path adopted by Americans."

Russian President Dmitry Medvedev called on Iran to stop what he claimed to be “irresponsible behavior” and claimed that agreement on a new round of international sanctions on Iran has almost been reached.

“Nobody wants sanctions, but in some cases there is a need to agree on them,” he told reporters after meeting with German Chancellor Angela Merkel Monday in Germany.

Iran has already been under three sets of United Nations Security Council sanctions for refusing to suspend its peaceful enrichment activity.

Iran says its nuclear program is peaceful, while the U.S. and other Western nations claim it may be seeking nuclear weapons.

The proposed additional sanctions would bolster an arms embargo and restrict financial transactions.

End Item

News.az: There is no tension between Iran and Russia, Ahmadinejad http://www.news.az/articles/16983 Mon 07 June 2010 | 07:27 GMT

'Tehran's Declaration created an opportunity for anti-justice countries to return to the path of conversation and respect to rights of all nations.'

'There is no tension between Iran and Russia, Tehran gave a notice so the Russian government will be careful. Iran expects Russia to respect friendship conditions in sensitive situation.'

Speaking to LBC network , President Ahmadinejad stressed 'If Russia, 5+1 or any other country approved Tehran declaration solved the issue , Tehran deceleration is not defying Russia or other countries but it indicate Brazil, Turkey and Iran have mutual understanding toward international issues and presented better solution.'

President Mahmoud Ahmadinejad described Tehran's Declaration as national demand of all Iranians.

In an interview with Lebanese TV Network, LBC, President Ahmadinejad said Tehran's Declaration created an opportunity for anti-justice countries to return to the path of conversation and respect to rights of all nations.

The President said that Tehran's Declaration defended the truth adding that it proved that Brazil, Turkey and Iran know their world responsibilities better than others and insist on justice.

President Ahmadinejad reiterated that the Declaration does not belong merely to the three countries but it includes demands of all nations and those who seek equal rights for all nations.

ILNA

RIA: Russian experts finish look at probe of S. Korean warship sinking http://en.rian.ru/world/20100607/159328975.html

09:31 07/06/2010

A group of Russian Navy experts left Seoul on Monday after completing their assessment of the investigation that found North Korea was responsible for the sinking of a South Korean warship in March.

The South Korean military said the Russian team did not draw their own conclusions. An international investigation concluded two weeks ago that the South Korean Cheonan corvette was sunk by a torpedo fired from a North Korean submarine.

The South Korean Navy vessel sunk on March 26 in the Yellow Sea near the disputed maritime border between the two Koreas. Forty-six sailors died.

Pyongyang has denied any involvement in the sinking and the conclusions of the investigation, which was carried out by U.S. and Australian experts, further worsened relations hit by the loss of the Cheonan.

Russian President Dmitry Medvedev accepted Seoul's offer to send specialists at the end of May.

The Kremlin press service said Medvedev believed it was important be certain of the cause of the sinking of the warship before taking action.

South Korean Navy and Defense Ministry officials have said the experts visited the naval base in Pyeongtaek, where the wrecked ship was towed after being recovered from the seabed.

They met with South Korean experts and some of the 58 surviving crewmembers, and also inspected the wreckage of a torpedo, which allegedly hit the Cheonan.

South Korea has called on the UN Security Council to consider the situation.

Russia has called on all sides to show restraint amid fears that a further escalation of tensions on the Korean Peninsula could develop into a military crisis.

SEOUL, June 7 (RIA Novosti)

2010/06/07 16:48 KST

Yonhap: (LEAD) Russian experts end probe of sunken S. Korean ship http://english.yonhapnews.co.kr/national/2010/06/07/75/0301000000AEN201006070075 00315F.HTML

By Kim Deok-hyun SEOUL, June 7 (Yonhap) -- Russian experts wrapped up their own assessment of the probe results on the sunken South Korean warship, the defense ministry said Monday, as Seoul seeks their endorsement of the investigation that accused North Korea as the culprit.

"I learned that they ended the inspection," ministry spokesman Won Tae-jae told reporters in a press briefing. He declined to give any further details, citing a request by the Russian government not to disclose specifics. The Russian team, consisting of experts on submarines and torpedoes, arrived in South Korea on May 31 to review the findings of the multinational probe that a North Korean submarine had attacked the Cheonan, a 1,200-ton South Korean corvette, with a torpedo on March 26, killing 46 sailors.

Russia and China, both allies to North Korea and veto-wielding permanent members of the U.N. Security Council, have yet to accept the probe results. Russia has said it will make its assessments in deciding its position.

South Korea officially asked the U.N. last week to take up the Cheonan issue.

Meanwhile, the spokesman confirmed South Korea and the U.S. held a joint anti- submarine drill on the day the Cheonan was attacked in waters about 170 kilometers away.

The anti-submarine drill was a part of annual South Korea-U.S. military maneuvers, called Key Resolve/Foal Eagle, but the day's exercise ended at 9 p.m., or about 22 minutes before the North's attack, Won told reporters.

The Cheonan split in two and sank on the night of March 26 from a shockwave and bubble effect generated by a huge, non-contact, close-range blast by the North's torpedo in the Yellow Sea border near North Korea, according to the probe results.

"It's impossible to detect a submarine about 170 kilometers away," Won said.

The annual drills between South Korea and the U.S. were scheduled to last until March 28, but the two sides terminated them due to the sinking of the Cheonan, Won said.

[email protected] (END)

Russia Today: Seoul-Pyongyang tension affects whole Asia-Pacific region – Moscow http://rt.com/Politics/2010-06-06/singapore-security-summit-korea.html/print

06 June, 2010, 16:12

Tension between North and South Koreas keeps growing. At a major security summit in Singapore, Russia has called for diplomacy to be stepped up in order to stop the row getting out of control.

South Korea has accused its neighbour of sinking one of its warships and North Korea has criticized South Korea for calling on the UN Security Council to introduce sanctions. The situation on the Korean peninsula has been high on the agenda at the summit in Singapore, the biggest Asia-Pacific summit dedicated to the security issues in the region.

All the parties involved in this conflict have had an opportunity to share their suggestions on how to resolve the conflict.

South Korea’s Prime Minister and the US Secretary of Defense have both called on North Korea to admit what they call “military provocations”.

Meanwhile, Russian Deputy Prime Minister Sergey Ivanov has stressed that the international community has to be very careful when accusing North Korea, as too much pressure can make a confrontation more likely.

“Let’s assume sanctions are imposed – another round of sanctions. What will they achieve? I think nothing. I think this will only lead to further deadlock. It’s time for diplomats to do their job,” Sergey Ivanov said.

Russia has come to the security summit with its own experience in dealing with global challenges such as terrorism, extremism and drug trafficking.

Sergey Ivanov has called on the international community to look at this experience and to learn from it. He particularly spoke about Afghanistan.

“However ambiguously the Soviet military presence in Afghanistan might be viewed now, nobody disputes the fact that during that period, Afghanistan produced almost no drugs,” he said.

Soviet troops were deployed in Afghanistan between 1979 and 1989 and drug flow was minimal because the forces aggressively eliminated poppy production, Ivanov explained.

The minister urged NATO forces to crack down harder on the drug business, especially focusing on Afghanistan’s social and economic development. This is needed to give poppy farmers an alternative, Ivanov said.

"If you burn down a poppy plantation, you need to invest in conventional agriculture," Ivanov said. "A lot should be done to start very primitive social and economic life in Afghanistan."

"If we don't do that, any military presence will be in vain," Sergey Ivanov said.

He also added Russia will continue with its help to the US forces and its allies in the region, providing logistics and intelligence in Afghanistan, but will “never again” send its troops to the region.

"Never again will a Russian soldier enter Afghanistan," the minister said. "It's like asking the US whether they will send troops to Vietnam. It's totally impossible." Aysor: CSTO special units to hold exercises to fight terrorism http://www.aysor.am/en/news/2010/06/07/csto-terrorism/

First stage of training exercises of units of the special operative forces of the CSTO states will take place from June 7 to June 11. Among participants are units from Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.

“The trainings are aimed at development of joint measures against terrorist groups, fight against illegal trafficking of weapons, drags, mines in territories of the CSTO member- states,” told Interfax a spokesperson to the organisation.

The training exercises will be held at the Kadamovsky Training Centre of the North Caucasus regional command of the home forces of the Russian Interior Ministry.

The exercises’ key goals are to develop practical skills of members of the armed home forces, police, operative units, operative groups, who were included into the special army to fight against terrorists.

TODAY, 11:13

Aysor.am

RIA: Russia sends drugs chief to German conference on Afghanistan http://en.rian.ru/world/20100607/159329272.html

09:50 07/06/2010 BERLIN, June 7 (RIA Novosti) - Russia is to put the Afghan drug trade at the center of an international security conference on Afghanistan hosted by Germany on Monday.

Russia's drug control chief, Viktor Ivanov, will talk about Afghanistan and global security at the Berlin part of the conference, titled Central Asia and Afghanistan: Problems and Solutions.

The conference, which also features sessions in Potsdam, will look at a wide range of global issues, including the fight against terrorism and corruption, as well as Afghan drug trafficking, which Moscow feels is being inadequately addressed by NATO forces in Afghanistan.

"On the whole, the West still does not see it as a problem for itself. One of the objectives of the conference is to say that challenges which Russia faces today may affect the European Union tomorrow," said Alexander Rahr, director of the Russia-Eurasia program of the German Council on Foreign Relations (DGAP). The conference, organized by DGAP together with RIA Novosti and Russia's Council for Foreign and Defense Policy, will be attended by leading experts from Russia and the EU, including Karl-Georg Wellmann, Vitaly Naumkin, Sergei Karaganov and Nikolai Bordyuzha.

As a follow-up to the conference, an international forum on combating Afghan drug trafficking will be held in Moscow on June 9-10.

According to the Federal Drug Control Service, Afghan opium causes the deaths of around 100,000 people around the world annually. In Russia alone Afghan heroin kills around 30,000 young people each year.

Afghan drug production increased dramatically after the U.S.-led invasion that toppled the Taliban in 2001, and Russia has been one of the most affected countries, with heroin consumption rising steeply.

Rossiyskaya Gazeta/Russia Today: Millions of small doses http://rt.com/Top_News/Press/eng.html#

Viktor Ivanov: Russia is ready to lead the anti-drug coalition

Ivan Egorov

Chairman of the State Anti-Narcotics Committee and the head of the Federal Drug Control Service, Viktor Ivanov, in a special interview with Rossiyskaya Gazeta (RG), discussed how Russian President Dmitry Medvedev’s important initiative, to create an international coalition against the Afghan drug threat, will be embodied.

An international forum, Drug Production in Afghanistan: a Challenge for the International Community, will be held in Moscow on June 9-10.

Rossiyskaya Gazeta: Viktor Petrovich [Ivanov], how serious is the threat that the drug problem poses to our country, and why should Russia be the leader in stopping the Afghan drug threat?

Viktor Ivanov: The Russian president spoke about this problem in September last year during a meeting of the Security Council. In February this year, he stressed the necessity of improving the international legal framework for combating the drug threat. And, on April 14, while speaking in Washington, Dmitry Medvedev talked about the absolute inefficiency of measures which are being applied by the international community to combat the drug menace.

RG: How serious is the threat? Is it possible we are exaggerating the danger level?

VI: Last year, Afghanistan produced twice as many drugs as the entire world did 10 years ago.

More than 100 countries suffer from this problem, including Russia and the European countries. The global market for opiates is estimated at about $65 billion. Russia accounts for one-fifth of the total market. With 771 tons, European countries are the number one consumer of opiates, Russia holds the second place with 549 tons. Each year, drugs kill 10,000 people in Europe, which is nearly 50 times more than the number of combat losses of the European contingent in Afghanistan. In Russia, however, these numbers are even more catastrophic. We lose approximately 30,000 people annually, the vast majority of whom are young people.

Due to the fact that our country is the biggest victim of the Afghan drug production, Russia should be the one to lead an international movement for its elimination in form of an anti-drug coalition. This is not an exaggeration; the drug threat has become one of the main problems of the 21st Century - as serious as the Second World War was in the 20th Century. Therefore, resolving this problem without the joint efforts of the European Union, NATO and Russia is impossible.

RG: Nevertheless, Russia and the NATO command have different approaches to the eradication of opium poppy in Afghanistan.

VI: Yes, that’s true. For example, Mr. Holbrooke, US special envoy to Afghanistan and Pakistan, says that destroying narcotic plants in Afghanistan is not necessary. They, allegedly, create jobs for peasants, who are not part of the Taliban and do not kill American soldiers. But in doing so, he actually provides amnesty to the drug lords. A similar idea was expressed by NATO spokesman James Appathurai in March, according to whom it is impossible to take away the only source of income from the Afghan farmers without providing them with an alternative.

Moreover, NATO believes that combating drug production will distract the forces from the fight against terrorism. This is a deeply mistaken view. To the contrary, military actions have created favorable conditions the cultivation of opium poppy, for which there are always plenty of buyers. Today, the cultivation of opium poppy employs up to three- and-a-half million Afghan farmers, whose earnings are next to nothing. Meanwhile, a lion’s share of the drug money goes toward fueling terrorist and extremist groups in Afghanistan, and around the world.

RG: What if NATO says, “Go ahead, send your troops and the drug police to Afghanistan and destroy opium poppy crops, meanwhile, we will take care of the Taliban”?

VI: I think that solving the conflict in Afghanistan by force is impossible, and we should not take part in NATO’s military operations in that country. The main goal of our policy is destruction of poppy fields, which does not require throwing bombs. The US managed to destroy about 80 per cent of illegal coca plantations in Colombia by defoliation, by spraying the fields with special reagents. This way, nearly 230,000 hectares were freed from coca in 2008. In the same year, about 5,500 hectares of opium poppy plantations, which is about 3 per cent of the total area of its cultivation, were eradicated by the same means.

RG: Could the cultivation of opium be made an unprofitable venture?

VI: Making poppy cultivation be economically disadvantageous requires the destruction of up to 50 per cent of drug crops. We cannot but worry about the fact that while the Alliance forces, together with the Afghan soldiers, are cleaning the largest drug province of Helmand from the Taliban, there are three northern provinces where opium poppy crops are growing at an escalating rate. A large number of drug laboratories are located in the north. A closer proximity of the drug plantations lowers the cost for transporting the drugs.

The widely-known policy of avoiding the destruction of the poppy fields largely contributes to the growth of the illicit crops. The work that is being done to eradicate them is recognized as being ineffective and costly. Let’s try looking at the situation form the viewpoint of the Afghan farmers: profits from wholesome agricultural crops are not guaranteed, the risk of elimination of the illegal fruits of their labor has been significantly reduced; meanwhile, there are poppy buyers who are able to pay immediately. We have already seen how the Afghan farmers decided to solve this problem in the 2009 UN report. The conclusion is clear: the use of forceful methods for the destruction of drug crops and drug laboratories is necessary and justifiable. We are working on convincing the global community and our American colleagues of this fact.

RG: Is Russia offering any specific measures?

VI: Our seven-point plan, called “Raduga-2” (“Rainbow 2”), is known to everyone and has so-far been fairly agreeable. One of the specific proposals: chemical destruction of crops. For example, there is a well-known weed-killing agent, glyphosate, which is not harmful to a person’s health, but is able to kill opium poppy at the root. There are also administrative and legal measures, such as establishing inventory practices for the Afghan land owners. If the land is used to cultivate opium poppy, this means that the owner is probably involved in drug trafficking; therefore, the Afghan government has the right to confiscate the land.

RG: Could barriers be set or drug laboratories?

VI: In order to reliably trace where the precursors are coming from, it is necessary to label the chemicals. This will allow us to learn where the agents that are used in the production of heroin come from. The production of drugs calls for a large number of precursors, the transportation of which is easier to trace than drug trafficking. Certain acids, such as acetic oxide, are used as chemical reactors; meanwhile, transactions involving large volumes of these substances may indicate involvement in drug production. Labels could make it possible to identify the manufacturer and monitor the traffic route. Of course, simply monitoring the traffic routes of precursors and destroying the crops is not enough. We need to create an economy in Afghanistan and make investments into that economy. Since the advent of the coalition forces, no new infrastructure had been constructed, instead, the old infrastructure has been destroyed. The 142 facilities that were built by Soviet experts continue to serve as the foundation of the Afghan economy.

All these issues will be discussed that the international forum in Moscow, which will begin on July 9. It will be attended by heads of anti-terrorist and law enforcement agencies of various countries, state and political actors, well-known experts, Russian and foreign journalists, as well as representatives of the UN, CSTO, NATO, SOC and other international organizations. I hope that this meaningful forum will create a breakthrough in the assessment of the international community of this critical global problem.

Dossier The heroin threat directly affects the situation in our country, where the number of drug users has reached 2.5 million, 90 per cent of whom use Afghan heroin. More than half are young people under the age of 30. Each year, about 30,000 deaths are drug-related, and 80,000 people try the drug for the first time.

Every fourth case which is handled by the Russian courts is related to drugs. This is more than the number of cases that are related to such “popular” criminal cases as theft. Last year, 120,000 people were brought to criminal responsibility for illicit drug trafficking. In 2009, 6,500 “shooting galleries” were liquidated, the supply of almost 10,000 bulk quantities of drugs was stopped, and 700 million individual doses were seized.

Read the article on the newspaper's website (in Russian)

Eurasianet: Is Moscow Ready to Act on Trans-Tajik Drugs? http://www.eurasianet.org/node/61223

June 6, 2010 - 10:51pm, by David Trilling

Moscow is beefing up its anti-drug rhetoric, taking aim at NATO’s inability to stem the flow of opiates northward out of Afghanistan. And Tajikistan looks like a target for the Kremlin’s interdiction plans.

On June 6, Deputy Prime Minister Sergei Ivanov said Moscow is “not happy with what the world community [i.e. NATO] is doing in the anti-drug war" in Afghanistan, agencies reported. Without elaborating, he said Russia is ready to "make several counter-drugs rings around Afghanistan to intercept drugs."

It is unclear how Russia would make such a cordon without involving Afghanistan’s Central Asian neighbors, but Moscow is clearly frustrated with Tajikistan’s languid drug war. Indeed, Ivanov singled out Tajikistan as a primary trafficking conduit. At least 30 percent of Afghan drugs transit Central Asia – most through Tajikistan – en route to Russia and Europe, according to the UN Office on Drugs and Crime. Yet Central Asian states only stop 5 percent of the flow. Russians consume 21 percent of the world’s heroin.

Has Moscow had enough? Some Tajiks think so.

The infamous Russian nationalist Vladimir Zhirinovsky (a Duma deputy chairman) recently remarked that Tajikistan had failed to achieve statehood and should become a Russian protectorate. At the same time, Moscow banned Tajik nuts and dried fruits because of a polio outbreak in the country (no, dried snacks cannot transmit polio).

The gestures prompted an outcry in Tajikistan, leading one pundit to suggest that Russia is attempting “to speed up a change of power” in the country.

"In the past 18 years, the Russian press has never been critical to Tajikistan as it is now. This means that the stance of certain Russian officials and the Russian press and government on Tajikistan is [united]," political analyst Sayfullo Mullojonov told avesta.tj, the privately funded website reported on May 31 (via BBC monitoring).

Other Dushanbe-based analysts argued that Moscow is pressuring Dushanbe like never before.

"Obviously, [President] Emomali Rahmon no longer suits the Kremlin as a partner from Tajikistan and a process has started to influence from outside the situation in the country and create prerequisites for the change of power,” [political analyst Rustam] Samiyev said, according to the same Avesta report.

VOR: Russian naval squadron ends its mission in Gulf of Aden http://english.ruvr.ru/2010/06/07/9212997.html

Jun 7, 2010 09:43 Moscow Time A squadron of the Russian Pacific Fleet under the large submarine hunter The Marshal Shaposhnikov is through with its part of the UN international mission to fight Somali sea pirates in the Gulf of Aden. The Russian ships have set course for their home port of Vladivostok, says the Fleet Command. Since March 27th the squadron has escorted 11 convoys totalling more than 100 merchant ships from various countries. The Marshal Shaposhnikov set free on May 6th the pirate-seized oil tanker Moskovsky Universitet, or Moscow University, under the Liberian flag, and with 23 Russian seamen on board. 10 pirates were arrested and another one killed. The detainees were later set at large. RIA: Russian task force concludes anti-piracy mission off Somalia http://en.rian.ru/mlitary_news/20100607/159328216.html

07:39 07/06/2010

A Russian Pacific Fleet's task force, led by Udaloy-class missile destroyer Marshal Shaposhnikov, has accomplished its anti-piracy mission in the Gulf of Aden and set sail to its home base in Vladivostok.

"The task force has been on a tour of duty [off the Somali coast] for more than two months. It escorted 11 convoys totaling over 100 commercial vessels from different countries. The task force is on its way home," Capt. 1st Rank Roman Martov, a Pacific Fleet spokesman, said on Monday.

The task force comprising the Marshal Shaposhnikov, the MB-37 salvage tug and the Pechenga tanker arrived in the Gulf of Aden on March 29 to join the anti-piracy mission in the region.

Navy commandos from the Marshal Shaposhnikov freed the Russian Moscow University tanker during a 22-minute operation on May 6. Ten attackers were detained and one was killed. None of the crew members was injured.

The Russian Navy has maintained a near-permanent presence off the Horn of Africa, with warships operating on a rotation basis. Russia joined international anti-piracy efforts off the Somali coast in October 2008.

The task force was the fourth group of warships from the Russian Pacific Fleet engaged in the anti-piracy mission off Somalia, with the previous three task forces led by the Admiral Vinogradov, Admiral Panteleyev and the Admiral Tributs destroyers. The Northern and Baltic fleets have also sent task forces to the region.

VLADIVOSTOK, June 7 (RIA Novosti) Thenews.pl: Russia denies Smolensk credit card theft http://www.thenews.pl/international/artykul133023_russia-denies-smolensk-credit-card- theft.html

07.06.2010 08:41 The Russian Interior Ministry has denied reports in the Polish media on Sunday that three Russian members of the notoriously corrupt OMON special forces have been arrested after they stole a credit card belonging to a victim of the Smolensk air crash disaster.

The Rzeczpospolita daily web site reported that payments to the equivalent of 1,400 euros had been made on the credit card of historian Andrzej Przewoznik, who died along with president Lech Kaczynski and 94 others in the crash in western Russia on April 10.

Poland’s government spokesman Pawel Gras told Radio ZET, Sunday morning, that the arrests were made “with lightning speed, thanks to the co-operation between the [Polish] Internal Security Agency and the Russian special services…”.

The Interfax news agency is reporting, however, that deputy chief of a regional department of Russia’s Internal Affairs, Nikolai Trubovets, describes the reports as “fiction”. Later on Sunday, an official told the Interior Ministry press office that the reports of the theft of a credit card found at the crash site near the Smolensk air strip were “cynical”.

The Russian Izvestia writes this morning that "…if it appears that the story is not confirmed by the facts then this can end in a major international scandal".

Nevertheless, Poland’s TVN 24 news station reports, Monday morning, that what is known as fact is that two credit cards under the name of Andrzej Przewoznik - the head of the Council for protection of Struggle and Martyrdom Sites - have gone missing and one of them was used two or three hours after the crash on April 10 to the tune of 1400.

Credit cards belonging to deputy head of the Law and Justice party, Aleksandra Natalli- Swiat, the deputy head of the Law and Justice political party, have also yet to be recovered, but no payments have been made on these. (pg)

EUobserver: Germany and Russia call for new EU security committee http://euobserver.com/9/30223

ANDREW RETTMAN

Today @ 09:26 CET

EUOBSERVER / BRUSSELS - Germany and Russia have called on the EU to create a new foreign minister-level security forum to handle issues such as Transnistria. German Chancellor Angela Merkel and Russian President Dmitry Medvedev made the proposal at a joint press conference following bilateral talks in Meseberg castle, 40km north of the German capital, on Saturday (5 June).

"There is now a committee of ambassadors in Brussels that deals with security issues," Ms Merkel said, referring to EU Council's Political and Security Committee (PSC). "This committee could be further developed, so that there is regular and ongoing contact not only at ambassador level, but between the EU and Russia at the foreign minister level."

She added that Berlin will put forward the idea at the next PSC meeting in Brussels on Tuesday in order to "attack" the creation of "such a mechanism."

Mr Medvedev backed the idea, saying: "We must make a special forum where we can exchange opinions on current issues of international security. We can also prepare advice on various legal issues of co-operation."

Both sides mentioned Transnistria - a strip of land in Moldova which is controlled by pro-Russian rebels and which hosts a Russian military base - as an example of the kind of problem the new body could deal with.

"You could try something like that in concrete cases that we still have to resolve. In our opinion, the situation in Transnistria is a very favorable example," Ms Merkel said.

The Meseberg meeting saw the two leaders and a small "handful" of advisors hold behind-closed-doors talks for 10 hours, according to German press agency DPA.

It comes less than a week after an EU-Russia summit in Rostov-on-Don in which the EU rejected Russian calls for a speedy visa-free travel deal and in which the two sides failed to agree a detailed memorandum on EU help for modernising Russia's economy.

Mr Medvedev pressed the visa issue on Saturday.

"For our citizens, for the citizens of Russia as well as the citizens of the European Union, this is something extraordinarily important. If we go ahead, it will change our lives. It will make us a true strategic partners," he said.

It is unclear if the security committee proposal, which would involve regular meetings between EU foreign relations chief Catherine Ashton and her Russian counterpart, Sergei Lavrov, has been consulted with Ms Ashton's office.

"We hope and we think that this could see a positive response in the entire European Union," Ms Merkel said.

Asked by journalists why the proposal was being floated at a bilateral meeting instead of at the EU level, Mr Medvedev noted that Germany and Russia have a long-term "strategic" partnership. "All ideas have their founding fathers who enforce these ideas and take them forward. In this sense, I believe that I can call on good ideas first bilaterally," he said. "It doesn't mean that we don't back our work with Brussels or want to replace it with co-operation with other states. It's just to have ideas emerge at a personal level."

Ms Merkel said: "This is not a bilateral agreement. But it serves that purpose. There are always situations where one member state moves ahead a bit on a particular topic."

Moscow Times: Germany, Russia Propose New Security Committee http://www.themoscowtimes.com/news/article/germany-russia-propose-new-security- committee/407628.html

07 June 2010 The Associated Press

MESEBERG, Germany — German Chancellor Angela Merkel and President Dmitry Medvedev have proposed a joint European Union-Russian security committee aimed at resolving regional crises and conflicts.

Merkel and Medvedev told reporters after a meeting outside of Berlin on Saturday that constant contact between the EU and Russia on security matters needed to progress to a higher level.

"This should help to resolve difficult situations better than in the past," Merkel said.

Medvedev arrived Friday for a two-day exchange with Merkel at the Meseberg mansion in the countryside outside Berlin.

Merkel and Medvedev said they covered a wide range of issues in 10 hours of talks, including the euro crisis, financial markets regulation and international issues like Iran, Afghanistan and Central Asia.

The proposed new forum, called the EU-Russia Political and Security Committee, should work on the ministerial level, with EU High Representative Catherine Ashton and Foreign Minister Sergei Lavrov in charge, they said in a joint written statement.

Its main purpose should be to "establish ground rules for joint EU-Russia civil/military crisis management operations," the statement said. In addition, it should work on specific issues, conflicts, and crisis situations, it said.

The first issue to be tackled could be the Transdnestr conflict that has troubled Russia, Ukraine, Moldova and the EU for almost two decades, it said.

The cooperation "could include a joint EU-Russia engagement, which would guarantee a smooth transition of the present situation to a final stage," according to the statement. No agreement was reached, however, on lifting visa obligations for travels between Russia and the European Union.

Merkel said Germany has always taken a "careful approach" toward the visa question.

"It is not about postponing this forever," she added. "We are now at the stage where we will very specifically talk about what needs to be done to lift the need for visas."

Medvedev reiterated that Russia was ready to go ahead with ending visa obligations.

"If we can agree on this, this will change the quality of our lives," he said. "This will make us true strategic partners."

On Iran, he and Merkel declared that the five world powers negotiating with Tehran supported a new set of international sanctions.

Medvedev said "agreement on the sanctions exists," despite the fact that "nobody wants sanctions."

"We hope the voice of the international community will be heard by the Iranian leadership," Medvedev said.

Merkel said sanctions could be passed by the United Nations Security Council "in the near future."

Russia has been traditionally opposed to sanctions for Iran, a longtime trade partner, but in recent months officials have shown less patience with Iran's refusal to stop enriching uranium and heed other council demands meant to reduce suspicions over its nuclear aims.

"I am very happy that we can stand here jointly today and say that this is a joint position not only of the European Union, the United States of America and Russia, but also of China," Merkel said. "That is an important step the international community has made here."

Moscow has recently joined the other four UN Security Council members — the United States, China, Britain and France — to tentatively back a draft fourth set of UN sanctions against Iran.

Russia and China are against attempts to rush a vote in the UN Security Council on further sanctions against Iran, Lavrov said Friday in Beijing, Reuters reported.

But Lavrov also added that work on the resolution was close to completion and that the economic interests of Russia and China had been taken into account in the draft. Reuters: Putin calls for a Russian metals exchange http://www.forexyard.com/en/news/Putin-calls-for-a-Russian-metals-exchange-2010-06- 07T072530Z

RUSSIA-METALS/EXCHANGE

MOSCOW, June 7 (Reuters) - Russian Prime Minister Vladimir Putin has called on regulators to create plans for a national metals exchange by Aug. 1, a move intended to avert price rows between producers and industry, Vedomosti reported.

A source also told the Monday edition of the business daily that the plans were already being "seriously studied."

Putin met with regulators from the Federal Anti-Monopoly service (FAS), the Finance Ministry and other bodies last week as part of a drive to curb rising domestic steel prices.

The prime minister also called on the regulators to work out model long-term agreements for metals buyers that would take into account market prices and distribute risk.

Rising prices in the metals sector have become a major issue in Russia. Putin had to intervene to broker a compromise followed a serious of complaints from industry about the planned price hikes from steel producers. [ID:nLDE64U13R]

The current proposal calls for trade in a range of metal products as well as coal, coking coal and iron ore.

Small quantities of coking coal are already traded on a St. Petersburg-based commodities exchange.

Analysts at Moscow-based bank VTB were sceptical about the proposal, noting that such commodities are not traded widely on international exchanges and previous calls for a Russian metals bourse have yet to yield significant results.

"An exchange trade of metal products, coal and iron ore is not a globally developed practice and is quite complicated due to the nature of the products," the bank's analysts wrote.

"Therefore, it is not something that could be developed quickly domestically."

(Reporting by Alfred Kueppers)

VOR: Jacques Rogge content with preparations for Sochi Olympics http://english.ruvr.ru/2010/06/07/9212348.html Jun 7, 2010 09:33 Moscow Time The President of the International Olympic Committee Jacques Rogge says he is content with progress in preparations for the 2014 Winter Olympics in Sochi. The IOC Chief went to see the construction of the large ice rink in the Russian Black Sea resort on Sunday. This Monday the IOC President and Russian Prime Minister Vladimir Putin are due to take up preparations for the forthcoming Olympics and to lay the cornerstone of the foundation of a Russian International Olympic University. The two men will place in the foundation a capsule with a message for future students. The development plan for Sochi as an alpine climatic resort envisages the construction of 209 facilities, of which 30 are immediately related to holding sports competitions. 10 facilities were erected last year, another 58 are currently in the making, and 60 kilometres of roads have been built to date.

RIA: Putin to discuss 2014 Winter Olympics with IOC chief http://en.rian.ru/sports/20100607/159326925.html

00:59 07/06/2010

Russian Prime Minister Vladimir Putin will visit the Russian southern resort of Sochi on Monday to discuss the preparations for the 2014 Winter Olympics with President of the International Olympics Committee (IOC) Jacques Rogge.

Rogge is attending a six-day IOC conference, which opened on Sunday and brings together more than 600 representatives of national Olympic and Paralympics movements around the world to discuss various aspects of the Olympic Games.

The conference will also announce the official results of Vancouver 2010 on June 10.

A total of 206 sports and infrastructural facilities are to be built by the time of the 2014 Games in Sochi. Seventy-two facilities are being built in the city now. The cost of building the facilities and infrastructure for the Games is estimated at more than $30 billion.

Putin and Rogge will lay a ceremonial foundation stone at the construction site of the Russian International Olympics University.

The Russian resort city on the Black Sea won the right to host the Olympics at an International Olympic Committee (IOC) session in Guatemala in July 2007 after a close race with South Korea's Pyeongchang and Austria's Salzburg.

Putin, a noted sports fan and participant, was the driving force behind Russia's successful bid. He took the unprecedented step of delivering a speech in English at the IOC meeting in Guatemala to select the host city, and was credited with swaying delegates to vote for the southern Russian resort.

Russia has never staged Winter Olympics and Moscow's hosting of the 1980 Summer Games was marred by a U.S.-led boycott involving more than 60 countries.

MOSCOW, June 7 (RIA Novosti)

Vedomosti/Russia Today: Sochi awaits for Formula One http://rt.com/Top_News/Press/eng.html#

Skiers and hockey players are not the only ones who will gather in Sochi in 2014, as Formula One drivers might also visit the city. The Ministry of Regional Development proposed building a race track in the city for the royal race. Experts estimate the project will cost $200 million. These spending would be in addition to the $30 billion allocated for the Olympics.

Maksim Tovkailo

“The volume of investment…is unprecedented,” Yury Reilyan, deputy minister of regional development, was quoted as saying by Interfax: the price of the Olympic project is 950 billion rubles. Construction of sporting facilities and basic infrastructure necessary for their functioning will cost 185 billion rubles, of which 93 billion is being covered by investors, Reilyan explained to Vedomosti: “The remaining balance accounts for investments made into the development of Sochi as a resort, and officially, cannot be counted as funds allocated toward preparing for the Olympics”.

The budget of the Federal Target Program “Development of Sochi as a Mountain Climate Resort until 2014”, which was prepared in 2006, was 316 billion rubles, of which 185 billion was to be allocated by the federal budget. But, in private records the Ministry of Regional Development acknowledged that, considering all infrastructure, the project will cost 1 trillion rubles. Now, this number has been officially confirmed.

The sum of 950 billion rubles includes funds that are not only designated for the preparations for the Olympic Games, but also for things such as the dismantlement of certain facilities after the Games, explains Reilyan. He did not say what share of the total amount would come from private investors and how much of these funds would be allocated from the federal budget. The Ministry of Finance is not yet familiar with the new estimates of the Regional Development Ministry, says a Finance Ministry official: “Between 2008 and 2014, spending would amount to 1.3 trillion rubles, of which about 800 billion would come from the federal budget. These are the latest numbers that we were given”.

In comparison to the initial estimates, costs have increased by 3-4 times, noted Boris Kopeykin from S&P, but this is typical when preparing for the Olympics. Sochi was one of the least-prepared Olympic cities, hence the high spending on infrastructure, adds Bulat Stolyarov, director of the Institute for Regional Policy. One cannot say that these costs are directly related to the Olympics, but had it not been for the Games, they would be much smaller, says Kopeykin.

Dreams come true Officials have grown seriously concerned with the sports industry in Sochi and are willing to not only make the city an Olympic capital, but also the city of Formula One (F1). According to Reilyan, a race track for the royal race might be laid out in Sochi. A preliminary design has been made by the German Tilke GmbH, which builds race tracks for F1, but the final decision stands behind the CEO of Formula One, Bernie Ecclestone. “He had suggested holding the first race as early as in the fall of 2014. If we are provided guarantees that the race is held and that the track would not be vacant in the future, then we are ready to start building,” explained Reilyan.

The track should be located in the Imereti Lowland. Most of it will be incorporated with the roads that are being constructed for the Olympics, says Reilyan: “The requirements and the cost will be higher, although it is still too early to talk about the budget. The final design is yet to be developed. This will be done by the organizing committee, which will be set up by the end of the year”.

In April of 2010, Ecclestone said that it would be possible to hold races in Sochi, but did not name any specific dates. His representative was not available to comment. F1 is interested in expanding the geography for its races, therefore Sochi has a good chance, says Dmitry Navosha, editor of Sports.ru.

Sochi is not the first Russian city where officials wanted to see F1 races take place. After the 1980 Olympics, this was the dream of Leonid Brezhnev, says Eldar Marchenko, marketing director for the Myachkovo race track, as Russian officials had the same idea. In 2000, a construction project for a race track in Moscow’s Nagatinskaya alluvial plain was developed, but city authorities did not want to give Ecclestone full rights on advertising, broadcasting, and ticket sales. Nevertheless, the Mayor’s Office had announced its plan to construct a race track near the Sheremetyevo Airport, although these plans were also short-lived. Local authorities wanted to build a track in St. Petersburg, but in 2008 the construction of Moscow Raceway began in Volokolamsk. It was scheduled to be completed in 2010, says Marchenko, but the economic crisis had obstructed the plans. The construction of Moscow Raceway is resuming, says a representative of the Razvitie-Stolitsa Bank (one of the investors), but the F1races are only possible with the government’s support.

Building a race track for the F1 requires $200 million (the preliminary budget of Moscow Raceway was 5.5 billion rubles -- Vedomosti), says Marchenko; if these are strictly private investments, then repaying the funds will be impossible. Moreover, local authorities would be the ones to reap the most benefits from the growing recognition of the city and an influx of tourists, says Marchenko. The first race in Malaysia brought in 50,000 tourists and about $80 million in profits; a year later, there were 80,000 tourists and more than $100 million in profits, says Marchenko. The construction cost for the track is much smaller than for the Olympic Games, while the profits could be significantly higher, says Mikhail Gets, director of Praedium Oncor International.

Read the article on the newspaper's website (in Russian)

RIA: Russia, Brazil start visa-free travel http://en.rian.ru/russia/20100607/159327519.html

04:49 07/06/2010

A 2008 agreement between Russia and Brazil on visa-free short-term tourist travel comes into effect on Monday.

The agreement was signed during President Dmitry Medvedev's visit to Brazil on November 26, 2008.

Under the agreement, Russian and Brazilian tourists are not required visas for entry, exit, transit or stay on the territory of another state for up to 90 days within each 180-day period from the first entry.

However, those who travel to Russia and vice-versa to start a business, to seek an employment, to engage in religious or charity activities, to receive education or training, or to take part in a research, will still be required to obtain a visa.

Brazil is the sixth state in Latin America to scrap visa requirements for Russian citizens, following Venezuela, Cuba, Peru, Ecuador, the Dominican Republic and Argentina.

MOSCOW, June 7 (RIA Novosti)

Arka: Russia is largest foreign investor in Armenian economy http://www.arka.am/eng/economy/2010/06/07/20185.html

YEREVAN, June 7, /ARKA/. Deputy director of Russian Institute of Strategic Studies (RISS), Igor Prokofyev, said Saturday in Yerevan that Russia is the largest foreign investor in Armenian economy.

He arrived in the Armenian capital of Yerevan to participate in a round table on the Armenian-Russian cooperation and regional problems. The discussions were organized by the ruling Armenian Republican Party and the RISS. According to him, the total amount of Russian investments in Armenia since 1991 has reached $2.4 billion,.

‘Russia is not only the leader in terms of investments volume, but also in terms of investments pace,’ Igor Prokofyev said adding that Russia invests in Armenia’s energy, banking, mining, construction, information and telecommunications sectors. He also commended Armenia’s leadership for welcoming the arrival of leading Russian companies in Armenia that helps raise Armenia’s investment attraction for other countries.

“Economic relations between Russia and Armenia are traditionally a major factor of Armenia’s social-economic advancement. They have, particularly, secured a guaranteed electricity supply having also a positive effect in terms of employment here,’ he said. He also reminded that the bulk of individual remittances to Armenia, a significant component of local economy, arrives from Russia. -0-

07/06/2010 11:34

Zawya: Islamic funds urged to tap Russia, CIS market http://www.zawya.com/Story.cfm/sidZAWYA20100607042456/Islamic%20funds %20urged%20to%20tap%20Russia,%20CIS%20market

Emirates Business 24-7, 07 June 2010

Islamic fund managers and investors in the Middle East should turn their attention to more than 65 million Muslims in Russia and the Commonwealth of Independent States (CIS) while the region's banks investigate the potential of offering Shariah-compliant products for overseas investors and local consumers, said a senior official of Amanie Islamic Finance consultancy.

Mark Smyth, Executive Director at Dubai-based Amanie Islamic Finance Consultancy and Education (AIFCE), highlighted the huge potential in Russia as well as the other CIS countries such as Kazakhstan.

Echoing Shariah scholar Dr Mohammed Daud Bakar's comments, Smyth urged industry professionals to expand into untapped geographical markets such as Russia and other CIS countries. There is growing demand from financial institutions there, which represents an excellent grassroots opportunity.

According to official government figures, Russia, the eighth largest economy in the world, is home to some 20 million Muslims. Despite being hit hard by falling oil prices last year, Russia still has a per capita income of $15,100 (Dh55,46).

Oil-rich Kazakhstan is a regional economic powerhouse in central Asia, with revenue from oil exports topping $24 billion per annum. Its Muslim population currently stands at more than seven million, with a per capita income of $11,400.

"Per capita incomes in some of the CIS countries may be modest by western standards, but they are going to grow significantly and their economies will have to develop to keep pace, producing real time opportunities for Shariah compliance. Imagine a population greater than the GCC, relatively untouched," said Smyth. By Staff Writer

Vancouver Sun: Russia dusts off old plans to open the Northeast Passage for sea trade with Asia http://www.vancouversun.com/opinion/Russia+dusts+plans+open+Northeast+Passage+tr ade+with+Asia/3121114/story.html

By Jonathan Manthorpe, Vancouver SunJune 7, 2010 12:03 AM

The plague of pirates preying on Asia's sea links to Europe and the prospects of opportunities presented by global warming have prompted Russia to dust off some old plans that have been lying in filing cabinets since the collapse of the Soviet Union.

The shortest route by some 3,000 nautical miles between the throbbing workshops of the Far East and Southeast Asia and the hypermarkets of Europe is not the current course through the traffic jams of the Malacca Straits and the high-risk transit past the Horn of Africa to the Suez Canal.

It is what the Russians call the Northern Sea Route and what those with a British-centric view of global maritime exploration are more likely to still call the Northeast Passage.

This route runs from the Barents Sea north of Norway and the Russian port of Murmansk -- a city, incidentally, attacked and burned by a Royal Navy captain ancestor of this writer during the Crimean War -- along the Arctic coast of Siberia and down through the Bering Strait to Asia.

This route was used extensively during the Soviet period with the help of nuclear- powered icebreakers, because parts of the sea are only ice-free for two months a year in late summer.

Use of the northern route dwindled to nothing after the collapse of the Soviet Union and the two decades of internal turmoil needed to reimpose political stability and nationwide economic growth.

The reawakening of Russia's Arctic consciousness came with the construction and opening in 2008 of an extraordinary oil terminal 22 kilometres offshore at Varandey in the eastern Barents Sea.

The terminal, a huge steel caisson 50 metres across and 50 metres high, draws on oil pumped from reserves in Timano-Pechora province, one of Russia's richest oil regions.

Three tankers, each of 70,000-ton capacity, shuttle the oil to Murmansk from where it is sent on to western Europe and the United States. As of January this year, 10 million tons of crude oil, 69 million barrels, had been shipped out of Varandey, which has the capacity to ship 12 million tons a year, or 240,000 barrels a day.

Late last summer, two German merchant ships belonging to the Beluga group sailed the Northeast Passage from Asia to the estuary of the Ob River in Siberia.

This appeared to be the first sailing of the northern route without icebreaker assistance since the Finnish ship Uikku sailed the entire Northeast Passage in 1997.

These voyages plus the success of the Varandey terminal venture prompted the shipping company that owns and operates the three tankers, Sovcomflot, Russia's largest shipping company, to look more broadly at the opportunities of the northern route.

Its three tankers are purpose-built for operating in the Arctic and can break through 2.5 metres of ice.

The company began working on the idea that a fleet of merchant ships and tankers designed to operate independently in the Arctic ice could shorten the sea route between Asia and Europe by several sailing days, and save huge costs in fuel and time at sea.

To test the premise, Sovcomflot plans to send one of its three Arctic tankers from Varandey with a cargo of oil to Japan late this summer, probably September.

The Russian government is getting behind the project and Sovcomflot is not the only player on the field.

The head of Russia's Sea and River Transport Agency, Aleksandr Davydenko, said last week he anticipates the government will need to spend $30 million in the next five years for navigation safety systems and that an investment of a minimum of $1 billion will be needed to build ships for the northern route.

Another company looking at the potential benefits of global warming is Russia's Norilsk Nickel, which already has ice-capable ships, but is planning to construct an ice-class tanker to transport condensed natural gas from Siberia to Europe.

This commercialization of the Russian Arctic has significant risks, however.

There are almost no facilities for rescue up there if and when ships get into trouble.

This danger was highlighted in May last year when the cargo ship Petrozavodsk ran aground on Bear Island, south of the Norwegian-owned Svalbard archipelago in the Barents Sea whose main island is Spitzbergen. Bear Island is an important habitat for nesting seabirds and the Norwegian authorities managed to remove the 54 cubic metres of fuel oil on board before it leaked into the sea and could be a danger to wildlife.

But retrieving the ship itself got delayed over costs. The British company Titan Salvage estimated it would cost $15 million to refloat the Petrozavodsk, which is much more than ship owners are liable for under current maritime law.

In March the ship broke in two and has begun to disintegrate.

This incident has focused attention on the need to review and probably rewrite many international maritime laws as the Arctic opens for business. [email protected]

Updated Monday, June 7, 2010 9:37 am TWN, By Kavi Chongkittavorn, The Nation (Thailand)/Asia News Network

China Post: Russia determined to get EAS membership http://www.chinapost.com.tw/commentary/the-china-post/special-to-the-china- post/2010/06/07/259659/Russia-determined.htm

Bangkok -- Last month Russian ambassadors in all ASEAN member nations sent a diplomatic note to their governments reiterating Moscow's desire to become a member of East Asian Summit (EAS). Moscow's unusual move, which came as the ASEAN leaders are discussing the future of regional architecture, demonstrated its unwavering intention to join the high-powered regional forum led by ASEAN.

When EAS was inaugurated in December 2005, former Russian President Vladimir Putin stole the limelight by being the first leader to be at the meeting as guest of the host, Malaysia. Truth be told, Russia could have been one of the founding members of EAS if it was not eventually sidelined by last-minute maneuvering within the grouping.

At that time, the official argument was that Russia did not meet the criteria set forth by ASEAN — signatory of Treaty of Amity and Cooperation including being a full dialogue partner and having extensive relations with ASEAN. But it was an open secret that admission of Russia at that time would have a far-reaching impact as it would break the balance of big powers in the region.

Since then, Russia has been intensifying multi-faceted cooperation with all individual ASEAN members with emphasis on its closest ally in the region, Vietnam, and of late the grouping's biggest member, Indonesia. During numerous visits to the region, Russian officials and delegations would constantly remind ASEAN the world's rising stars are not only China and India but Russia as well. Indeed, one of Moscow's greatest frustrations was to convince ASEAN of its importance in terms of economic power and technological prowess. The collapse of Soviet empire and consequent breakups two decade ago has dented its once formidable positions. Currently, Russia is one of the world's top ten economies due to its rich energy sector. Huge foreign exchange reserves, ranked third in the world, have been focused on technological renewal in key industries such as medical technology, energy technology, IT, development of space and telecommunication systems and energy efficiency.

Russia's new knowledge-based economy would benefit ASEAN as a whole. Moreover, Russian oil and gas will serve as the main pillar of the region's energy security, an issue so pivotal for the grouping's continued prosperity. Now that the excitement over the U.S. policy under the Obama Administration towards ASEAN has subsided, Moscow has reasserted itself once more wanting to become an integral part of the region.

June 07, 2010 11:28

Interfax: Dushanbe protests against Zhirinovsky, Onishchenko comment on polio outbreak http://www.interfax.com/newsinf.asp?id=169238

DUSHANBE. July 7 (Interfax) - The Tajik Foreign Ministry has protested against comments made by certain Russian officials on the polio outbreak in Tajikistan.

"[Tajik Foreign Minister] Hamrokhon Zarifi called to [Russian Ambassador] Yuri Popov's attention the Tajik reaction to the biased and negative comments made by certain Russian officials, including State Duma Vice-Speaker Vladimir Zhirinovsky and Chief Public Health Official Gennady Onishchenko, that were posted on the Internet and in Russian media outlets," the ministry said on Monday. "The ambassador was presented with a note in that connection."

The ministry repeated its request for lifting the Russian ban on imports of Tajik dried fruit. The request was made a month ago.

"The minister said that the Federal Consumer Rights and Human Well Being Service's ban on Tajik dried fruit imports had caused vast damage, especially in the Sogd region," the ministry said.

Tajikistan completed polio vaccinations for children younger than six and the first stage of polio vaccinations for children younger than 15 on June 5. The second phase of inoculations are planned for June 15-19. According to the World Health Organization (WHO), 99.6% of children were given inoculated. The WHO also said that 432 patients with a preliminary polio diagnosis had been admitted to hospitals in Tajikistan, and the diagnosis was confirmed for 129. Tajikistan has had one lethal polio case. te mj

Itar-Tass: Serviceman of interior troops injured in Chechnya http://www.itar-tass.com/eng/level2.html?NewsID=15200987

07.06.2010, 10.51

GROZNY, June 7 (Itar-Tass) -- A serviceman of Interior troops of the Interior Ministry was injured while detaining militants in Chechnya, ITAR-TASS learnt at the republic’s law enforcement bodies.

On Sunday afternoon, servicemen spotted two militants near the settlement of Tangi-Chu of the Urus-Martan region when conducting an intelligence and search operation. “They offered armed resistance and disappeared,” a law enforcer said.

“A contract serviceman was wounded in the leg in an exchange of fire, he was hospitalized,” the law enforcer said.

Investigation is underway.

June 07, 2010 11:44

Interfax: Militant killed in Karachayevo-Cherkessia http://www.interfax.com/newsinf.asp?id=169248

CHERKESSK. June 7 (Interfax) - Rashid Bijiyev, a militant wanted for assaulting police officers and storing weapons, was killed in the Biychesyn wooded highlands in Karachayevo-Cherkessia, Karachayevo-Cherkessia Interior Ministry's spokesman Kazim Baibanov told Interfax on Monday.

"The wanted militant was killed in an exchange of gunfire with police at about 4:00 p.m. [local time] on Sunday. None of the policemen were hurt," he said.

A Kalashnikov submachine gun with cartridge clips was found at the scene and sent to a forensic laboratory, he said.

It was a joint operation by the Karachayevo-Cherkessia Counter Extremism Center, the republic's department of the Federal Security Service (FSB) and Spetsnaz. te mj RIA: Russian airliner makes emergency landing at Siberia airport http://en.rian.ru/russia/20100607/159328313.html

07:49 07/06/2010

A Russian airliner was forced on Monday to make an emergency landing after its landing gear caught fire during the take off from the Novosibirsk airport.

The Boeing 737-400 plane of the Russian air carrier Transaero circled over the city of Novosibirsk for two hours to burn extra fuel and ensure the safe landing at the departure airport.

The aircraft carrying six crew and 120 passengers was on route to Moscow.

"The plane has recently landed at the Tolmachevo airport [in Novosibirsk]. The air carrier has sent a substitute plane from Moscow to Novosibirsk," the regional transport police said.

The Novosibirsk transport prosecutor's office has launched an investigation into the incident.

NOVOSIBIRSK, June 7 (RIA Novosti)

Itar-Tass: Boeing plane with burning landing gear safely lands in Novosibirsk http://www.itar-tass.com/eng/level2.html?NewsID=15200407

07.06.2010, 08.03

NOVOSIBIRSK, June 7 (Itar-Tass) - The Boeing 737-400 plane of the Transaero company at about 09:30, local time, Monday (06:30 MSK) safely made an emergency landing at Tolmachevo airport in Novosibirsk. The West Siberian transport prosecutor’s office told Itar-Tass that nobody was hurt. There were 6 crewmembers and 120 passengers on the plane.

The emergency landing was made because the plane’s landing gear caught fire when it took off to fly on the Novosibirsk-Domodedovo airport (Moscow) route.

Before landing the plane was flying in circles near Novosibirsk in order to run out fuel.

The West Siberian transport prosecutor’s office has launched a probe into this fact regarding the fulfilment of the legislation on flights’ safety and aircraft security. The Transaero company has already sent from Moscow to Novosibirsk a reserve plane for the passengers of the emergency Boeing.

OJSC Transaero Airlines or simply Transaero is an airline based in Moscow, Russia. It operates scheduled and charter flights to more than 70 domestic and international destinations. Its main base is Domodedovo International Airport (DME), Moscow and Pulkovo Airport, Saint Petersburg.

Transaero began as a charter airline with aircraft leased from Aeroflot. It was incorporated as a joint stock company on 28 December 1990 and was the first non- Aeroflot company approved for scheduled passenger services in the Soviet Union. Its first charter service was Moscow to Tel Aviv on November 5, 1991. In July 1992, Transaero received its own Ilyushin Il-86. It became the first non-Aeroflot airline to operate scheduled flights in Russia when it launched its Moscow - Norilsk flight in January 1993 followed by Kiev, Sochi and Almaty later the same year. Its first international scheduled route from Moscow to Tel Aviv was inaugurated in November 1993.

In April 1993, Transaero started operating western aircraft when it received its first Boeing 737-200, followed by its first Boeing 757-200 in April 1994.

Transaero was also the first Russian airline with a frequent flyer program, which established in 1995. It was also the first Russian airline with an FAA aircraft maintenance certificate, which it obtained in 1997.

In December 1998 a weekly service between Moscow and London Gatwick was started. Transaero operated its first Boeing 737-700 in 1998, followed by Boeing 767-200 and Boeing 737-300 in 2002 and Boeing 767-300 and Boeing 737-400 in 2003. An agreement was signed to purchase 10 Tupolev Tu-214-300 in the same year. In 2005. Transaero became the first Russian passenger airline to operate the Boeing 747 when it started services on 11 July 2005 with a leased, ex-Virgin Atlantic Airways Boeing 747-200 on scheduled services from Moscow to Tel Aviv. The aircraft will also operate summer charter flights to holiday destinations.

In May 2005, Transaero added a flight between Moscow and Montreal, marking the first time the airline flew to Canada. On June 21, 2006, Transaero also began operating non- stop flights between Moscow and Toronto. The service to Toronto was temporarily suspended in September 2008, but has since been restored.

In November 2007 the airline announced a new scheduled bi-weekly service between Moscow and Sydney, Australia via Hong Kong, commencing December 24, 2007. The flight will be operated by Boeing 767-300 equipment.

The now quadruple daily London-Moscow bmi service is jointly operated by bmi in partnership with Transaero via a code-share agreement. Bmi operates two daily services in each direction and Transaero operates the other two. The two airlines also award frequent flyer miles for each other’ s flights and status miles on the LHR-DME route.

In October 2009 Austrian Airlines AG and Transaero Airlines concluded a code-share agreement in Moscow on the routing Vienna to Moscow. Under the Agreement Austrian Airlines will put its code on Transaero’s daily Moscow-Vienna-Moscow flight, while Transaero will put its code on one of the three daily Vienna-Moscow-Vienna flights which are operated by Austria.

In January 2010, Transaero announced that they will launch flights to; Beijing in China, Miami, Florida and New York City, New York both in the United States of America. Miami and New York will be the first US destinations for Transaero since serving Los Angeles and Beijing will be the first China destination. In February 2010, the airline announced via their website that Beijing will be launched on 4 June 2010.

Transaero code-shares with the following airlines: Austrian Airlines, Belavia, bmi.

According to the company’s release, Transaero operates scheduled and charter flights to more than 70 domestic and international destinations. Its main hubs are Domodedovo International Airport, Moscow and Pulkovo Airport, Saint Petersburg. Transaero Airlines is IATA member since 1993 and IOSA Operator. Transaero has its own program for frequent flying passengers - FFP-Transaero Privilege Program. Transaero offers Tourist Economy, Premium Economy, Business and Imperial Classes of Service.

Bloomberg: Raspadskaya Managers Concealed Fire Before Blast, Interfax Says http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRIRf3fwAmoE

By Anna Shiryaevskaya

June 7 (Bloomberg) -- Managers at OAO Raspadskaya, the largest supplier of coal to Russian steelmakers, concealed a fire that may have caused explosions that killed 90 people at a mine last month, Interfax said, citing an investigation.

Management continued work at the mine in Siberia after the fire started several days before the blasts, the Moscow-based news service said, citing unidentified people familiar with the preliminary findings of an investigation by Rostekhnadzor, Russia’s safety watchdog. Rostekhnadzor head Nikolai Kutyin recently said that his agency had made a preliminary determination on the causes of the blasts and will make the findings public this week, Interfax said.

Prime Minister Vladimir Putin last month rebuked Igor Volkov, the mine’s director, and said he’ll assert more control over Russia’s mining industry to avoid repeating the accident at the country’s biggest underground coking coal pit. Volkov was removed and charged with criminal negligence last month. Sergei Bakanyaev, who replaced Volkov, wasn’t immediately available for comment when contacted after hours. The press division of Rostekhnadzor, the Federal Service for Ecological, Technological and Nuclear Supervision, didn’t immediately reply to an e- mail seeking comment.

Twin blasts about 500 meters (1,640 feet) underground on May 8 and May 9 disabled the mine, which produces about 11 percent of the coal used by Russian steelmakers. Rebuilding the mine, which employs about 4,000 people, may take a year and cost 5 billion rubles ($163 million), according to Kemerovo region Governor Aman Tuleyev.

Raspadskaya shares slumped 24 percent in Moscow trading since the blast to close at 4.45 rubles on June 4. The dollar- denominated RTS Index dropped just 0.7 percent over the same period and the Micex Index gained 3.5 percent.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at [email protected]

Last Updated: June 6, 2010 21:40 EDT

Itar-Tass: Andrei Parkhomenko of UR leading in Birobidzhan mayor election http://www.itar-tass.com/eng/level2.html?NewsID=15200629&PageNum=0

07.06.2010, 08.47

BIROBIDZHAN, June 7 (Itar-Tass) - Member of the United Russia party Andrei Parkhomenko is leading at the Birobidzhan mayoral elections. The city election commission told Itar-Tass on Monday that he has got over 50 percent of the votes.

Andrei Parkhomenko has outstripped for rivals from the regional organisations of the Communist Party of the Russian Federation (CPRF), Liberal Democratic Party of Russia (LDPR), Just Russia party and a self-nominated candidate.

The Birobidzhan mayoral elections on Sunday were early, the city election commission specified. This February the former head of the city administration, Alexander Vinnikov, was elected governor of the Jewish Autonomous Region.

Birobidzhan is a town and the administrative centre of the Jewish Autonomous Oblast, Russia. It is located on the Trans-Siberian railway, close to the border with the People's Republic of China, and is the home of two synagogues, including the Birobidzhan Synagogue, and the Jewish religious community of the Jewish Autonomous Oblast.

It was granted urban-type settlement status in 1928 and town status in 1937.

The 2002 Census recorded the town as having a population of 77,250 (down from the 83,667 registered in the census of 1989). Birobidzhan is named after the two largest rivers in the autonomous oblast: the Bira and the Bidzhan, although only the Bira flows through the town, which lies to the east of the Bidzhan valley. Both rivers are tributaries of the Amur River. Visitors find the town surprisingly green. The chief economic activity is light industry.

According to Rabbi Mordechai Scheiner, the Chief Rabbi of Birobidzhan and Chabad Lubavitch representative to the region, “Today one can enjoy the benefits of the Yiddish culture and not be afraid to return to their Jewish traditions. It’s safe without any anti- Semitism, and we plan to open the first Jewish day school here.” Mordechai Scheiner, an Israeli father of six, has been the rabbi in Birobidzhan for the last five years. He is also the host of the Russian television show, Yiddishkeit. The town's synagogue opened in 2004. Rabbi Scheiner says there are 4,000 Jews in Birobidzhan, just over 5 percent of the town’s 75,000 population. The Birobidzhan Jewish community was led by Lev Toitman, until his death in September, 2007.

Jewish culture was revived in Birobidzhan much earlier than elsewhere in the Soviet Union. Yiddish theatres opened in the 1970s. Yiddish and Jewish traditions have been required components in all public schools for almost fifteen years, taught not as Jewish exotica but as part of the region's national heritage. The Birobidzhan Synagogue, completed in 2004, is next to a complex housing Sunday School classrooms, a library, a museum, and administrative offices. The buildings were officially opened in 2004 to mark the 70th anniversary of the founding of the Jewish Autonomous Oblast. Concerning the Jewish community of the oblast, Governor Nikolai Mikhaylovich Volkov has stated that he intends to “support every valuable initiative maintained by our local Jewish organizations.” In 2007, The First Birobidzhan International Summer Program for Yiddish Language and Culture was launched by Yiddish studies professor Boris Kotlerman of Bar-Ilan University. The city’s main street is named after the Yiddish language author and humorist Sholom Aleichem.

For the Chanukah celebration of 2007, officials of Birobidzhan in the Jewish Autonomous Oblast claimed to have built the world’s largest chanukia.

The Birobidzhan Jewish National University works in cooperation with the local religious community. The university is unique in the Russian Far East. The basis of the training course is study of the Hebrew language, history and classic Jewish texts. The town now boasts several state-run schools that teach Yiddish, as well as an Anglo- Yiddish faculty at its higher education college, a Yiddish school for religious instruction and a kindergarten. The five to seven year-olds spend two lessons a week learning to speak Yiddish, as well as being taught Jewish songs, dance and traditions. The school menorah was created in 1991. It is a public school that offers a half-day Yiddish and Jewish curriculum for those parents who choose it. About half the school’s 120 pupils are enrolled in the Yiddish course. Many of them continue on to Public School No. 2, which offers the same half-day Yiddish/Jewish curriculum from first through 12th grade. Yiddish also is offered at Birobidzhan’s Pedagogical Institute, one of the only university- level Yiddish courses in the country. Today, the city’s 14 public schools must teach Yiddish and Jewish tradition. RIA: Eurasia highest volcano erupts in Russia's Far East http://en.rian.ru/natural/20100607/159327856.html

06:22 07/06/2010

Eurasia's highest volcano on the Kamchatka Peninsula in Russia's Far East has shown again signs of intensified activity throwing clouds of smoke and ash into the air to a height of 2.5 kilometers.

The Klyuchevskoy, which lies 220 miles north of Petropavlovsk-Kamchatsky, is one of the largest active volcanoes in the world and reaches an altitude of 15,584 feet. It erupts about every 2-3 years.

Local seismologists said on Monday there was no immediate threat to the residents or tourists in the area, but issued an ash emission warning for air traffic in the vicinity of the volcano.

The Klyuchevskoy started a new active cycle with an eruption in August 2009.

There are more than 150 volcanoes on Kamchatka, 29 of them active.

Another volcano in the area, the Bezymyanny, erupted on May 31, sending clouds of ash to the height of 10 kilometers for about 20 minutes.

Experts say that ash from volcanic eruptions pose a threat to aircraft engine turbines and could also cause problems as it settles on aircraft wings.

The eruption on the Eyjafjallajokull Glacier in Iceland, which began April 14, paralyzed air traffic throughout central and northern Europe, leaving thousands of travelers stranded and forcing more than 20 European countries to close their airspace.

PETROPAVLOVSK-KAMCHATSKY, June 7 (RIA Novosti)

RIA: BP calls for Russian mini-subs to tackle oil spill - paper http://en.rian.ru/Environment/20100607/159329861.html

10:53 07/06/2010

MOSCOW, June 7 (RIA Novosti) - The British oil giant BP wants Russian mini-subs to help in eliminating the oil spill in the Gulf of Mexico, Izvestia daily said on Monday.

Anatoly Sagalevich of Russia's Shirshov Institute of Oceanology, which owns the Mir submersibles, was quoted as saying that talks with BP officials had started soon after the accident.

The leak started more than six weeks ago following an explosion on the Deepwater Horizon oil drilling platform that killed 11 rig workers. An estimated 12,000-19,000 barrels gush up daily from the seabed, posing a major threat to the Gulf of Mexico's flora and fauna.

BP, the owner of the rig about 80 kilometers (50 miles) off the Louisiana coast, has tried with little success to stem the flow of oil. It says it is now managing to gather about 10,000 barrels of oil a day using a special plugging device attached to the head of the drill to siphon oil up to surface ships.

Sagalevich told the Izvestia daily the Mir mini-subs could stop the leakage, but it would take some time.

Sagalevich said the Mirs would be the most effective since they are operated by people on board rather than remotely, allowing for a more thorough investigation.

"Visual research by specialists is very important, regardless of the fact that more than 50 remote-controlled underwater robots are working at the scene of the accident delivering the images from the seabed to the surface," the paper quoted the researcher as saying.

He added, however, that the depths involved could hinder the submersibles' operation.

Last week the U.S. filmmaker James Cameron suggested to BP that Russian mini-subs Mir help to tackle oil spill in the Gulf of Mexico, but the oil major rejected the idea.

Cameron, the director of the two highest-grossing films of all time, Avatar and Titanic, worked with the Mir mini-subs while filming in the latter 1997. The advanced deep-water equipment, used during an expedition to the sunken liner, helped to film the ship's destroyed interiors and provided the movie with more authentic sets.

Explaining BP's dismissal, Sagalevich said last week that "we are Russians, and if we go to the Gulf of Mexico with Mirs and do something there, the Americans would be appalled."

RIA: BP's reputation tarred by oil spill - Russian paper http://en.rian.ru/business/20100607/159330585.html

11:56 07/06/2010

MOSCOW, June 7 (RIA Novosti) - BP's reputation has been so severely damaged by the huge oil spill in the Gulf of Mexico that the London-based oil giant may go out of business, Russian daily Izvestia said on Monday.

An explosion ripped through the Deepwater Horizon oil drilling rig, about 80 kilometers (50 miles) off the Louisiana coast, on April 20, causing a major oil spill in the Gulf of Mexico. Oil continues to gush from the broken well into the sea despite weeks of work to stop the leak. Credit Suisse bank experts have already estimated company's loss at $37 billion - three times more than BP's annual cash flow. BP's shares have dropped by 34% since the incident and major rivals have the opportunity to buy it for an extremely low price, Britain's Financial Times said.

The accident has overshadowed all BP's recent achievements and now it is valued at only $115 billion. Western experts call Shell the most likely buyer, while Russian ones expect ExxonMobil to make a move. Neither company has officially commented.

"The impact on the brand is really serious," Konstantin Simonov, chief of the Moscow- based National Energy Security Fund think tank, told Izvestia.

The paper added that BP's top management say in private conversations that "the brand is totally destroyed."

Despite the blow to its reputation, Russian experts don't believe BP will die on feet that easily. Simonov said BP could borrow money to get it through the crisis.

If the company fails to secure credit, bankruptcy could become a very real possibility, he added.

BP has already failed with six attempts to halt the leakage from the underwater, and it looks like to continue until August, although the company says it is now managing to gather about 10,000 barrels of oil a day using a special plugging device attached to the head of the drill to siphon oil up to surface ships.

Upstreamonline: Medvedev calls for global spill fund http://www.upstreamonline.com/live/article216882.ece

Russian President Dmitry Medvedev has called on the world's leading economic powers on to consider creating a fund to insure against large-scale environmental disasters like the Gulf of Mexico oil spill.

News wires 07 June 2010 03:21 GMT

"Perhaps we should consider setting up a global fund for insuring or re-insuring against these sorts of (environmental) risks," the Russian president wrote in his official Kremlin blog.

Medvedev said he expected to raise the issue at a G20 summit in Canada later this month.

Russia, the world's leading oil producer, has paid close attention to BP's reaction to the Gulf spill, in part because 25% of the British energy giant's global output comes from its Moscow-based TNK-BP joint venture. Medvedev also called for the creation of a new legal framework to deal with such large- scale disasters.

"We need to put in place a modern framework of international law in this area, perhaps in the form of a convention or several agreements that will address issues of the kind arising from disasters such as that in the Gulf of Mexico," he wrote.

Reuters also quoted Deputy Prime Minister Igor Sechin as saying on Saturday, Russia would introduce stricter safety requirements for oil producers as a result of the Gulf spill.

Leaders from the Group of 20 wealthy and developing nations are scheduled to meet in Toronto later this month.

Published: 07 June 2010 03:21 GMT | Last updated: 07 June 2010 05:56 GMT

Kremlin: The environment and the economy do not contradict each other. A properly functioning economy is an environmentally friendly economy http://eng.kremlin.ru/news/350

June 5, 2010, 01:30

New entry on Dmitry Medvedev's blog concerns environmental challenges.

* * *

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Every year on June 5 the globe marks World Environment Day. This day has been marked around the planet since 1972, although Russia has been taking part only since 2007. But as they say, better late than never, and indeed, it took us a while, but we have, fortunately, finally woken up to the vital importance of protecting nature, to the realisation that economic and environmental development go hand in hand, and to the awareness that without strict compliance with environmental standards we simply will have no future at all.

These seem to be self-evident things, but it took quite a long time for this awareness to reach all quarters of our society, for everyone, ordinary citizens, and – most important – the state authorities, to realise that this is our common task; this is the responsibility of officials at every level and of each and every one of us. Insolent disregard for nature can have large-scale and highly unpredictable consequences, after all.

Events in the Gulf of Mexico have grabbed worldwide attention. We all see the giant oil slicks and the dead marine life. This should make us realise that we cannot even imagine the full consequences of disasters of this kind. We cannot fully seize their visual reality, let alone the entire legal and financial consequences, or the full effects they have on the natural environment. We therefore need to look at what further measures we can take at the global level to prevent such disasters. First, we need to insure ourselves as best we can against the possibility of such disasters. Second, we need to put in place a modern framework of international law in this area, perhaps in the form of a convention or several agreements that will address issues of the kind arising from disasters such as that in the Gulf of Mexico. Yes, we have international laws, international maritime law, for example, which addresses a whole series of matters, but I am sure that the scale of this disaster, the scale of such other potential disasters, goes beyond the legal framework currently in place.

Perhaps we should consider setting up a global fund, into which countries would put money for insuring or re-insuring against these sorts of risks, because in some cases even the richest companies and countries might not have enough money. I believe this is something worth looking at, worth discussing. Russia could put forward an initiative in this area. I think I will raise this subject at the G20 summit in Canada later this month.

Of course, there are also good examples, positive developments that we can learn from. We know that there are countries that have made immense progress in environmental issues. In Finland, for example, an oil refinery and one of Europe’s biggest oil terminals are located very close to a nature reserve, but it turns out that they can coexist in harmony. So, we see that it is possible to build pipelines and at the same time listen to bird songs, breathe fresh air, and simply enjoy life. This is an excellent example.

Russia too offers such examples. We see them in some of the new facilities we have built. I am not saying that they are all ideal from an environmental point of view, but the new facilities built in the Far East, Irkutsk Region and a few other locations are modern installations that differ greatly from their predecessors. I note too by the way that we also have examples of successful modernisation of existing production facilities. I recently visited the Novolipetsk Steel, which offers an example of modern production facilities measuring up to the latest standards. Unfortunately, we still have too few of these examples.

Sadly, we inherited from the Soviet Union a huge number of problems – more than two billion tons of industrial waste. Just think – two billion tons! Then of course there are also the worn out treatment facilities that can no longer cope, and lots of places where the environmental situation has become quite simply life-threatening.

Only in recent years have concepts such as energy-efficiency, energy saving, green investment, green economy, green technology, and green energy become part of our lives. These are trendy areas today. I believe we need to look at these issues not just in purely environmental terms but also from the economic point of view. I have said many times that people only start tackling environmental issues when the economy forces them to. I met just recently with industrialists and environmentalists and found myself thinking on that occasion that it is absolutely correct to state that the environment and the economy do not contradict each other. A properly functioning economy is an environmentally friendly economy. I see quite a lot of comments on my blog about environmental matters. People here are complaining about environmental pollution, about emission levels above the legal limits, and the proximity of rubbish dumps. What can we do about these kinds of problems? We need to take the initiative ourselves, clean up our country. People write about this on my blog. Ruslan from Bryansk Region, for example, said that we need laws regulating people’s behaviour in this area. Igor Gulyayev from Moscow proposes putting money into environmental awareness education. These are simple-sounding but absolutely correct proposals.

I agree that we need to combat environmental ignorance and indifference. Our school curriculum does not offer any kind of environmental education. This was an issue that environmentalists raised recently too when I met with them. Environmental education should indeed start in childhood. If children do not learn about it from the earliest age, if it is not taught in schools, people will not develop any kind of normal environmental awareness.

Of course, we have other tasks to address too, issues concerning the regional and municipal authorities, issues regarding proper location of natural sites, and the question of communication with environmental protection groups and organisations.

I am sure that much depends on the consolidated efforts of all of us, of every person in every town and village. Look at other countries’ experience: caring for nature starts with the individual. If people take pride in and care for their own homes and surroundings they will demand that the authorities show this same care and attention, and will not let themselves be forced into a dead end. If need be, they will raise their voices in protest.

I therefore believe that this discussion on the environment, on our life’s environment, deserves to be continued, and this is something I will focus on in my next Address to the Federal Assembly.

June 5, 2010, 01:30

Moscow Times: Putin Wants Russians to Move http://www.themoscowtimes.com/news/article/putin-wants-russians-to- move/407669.html

07 June 2010 By Anatoly Medetsky

Prime Minister Vladimir Putin has ordered federal agencies to simplify the rules for internal migration in a move that could help laid-off Russians to land jobs elsewhere in a country with extremely low labor mobility.

Putin instructed the agencies, including the Federal Migration Service, to make it easier for people to obtain the residence permits that tie Russians to a single address in an echo of the Soviet and tsarist past, the Cabinet said on its web site Saturday. “People feel like serfs when they move from one city to another,” said Dmitry Poletayev, who tracks migration issues at the Russian Academy of Sciences. “This has remained intact from the Soviet times.”

The order, which Putin signed on June 1, prescribes drafting proposals for people to apply for residence permits by post or online instead of facing often rude and corrupt officials. When the changes take effect, migration offices should either mail back the permits by post or stamp them into internal passports on the same day that a person files to register at a new address.

Currently, the process of getting the stamp involves days of waiting, with the risk of having to bribe the police who, especially in migrant-magnet Moscow, hunt down newcomers — Russians and foreigners — and demand to see residence permits among their identification papers.

Putin said he wanted the proposals by late August. He also tasked the Economic Development Ministry and the Media and Communications Ministry to participate in hammering out the improvements.

Single-industry towns — built around a major steelmaker, defense plant or coal mine — drew a chunk of government cash to support residents last year after the global economic debacle caused many employers to reduce production and lay off staff. Putin and President Dmitry Medvedev have since heralded greater labor mobility as a way to combat high unemployment.

“It's difficult for a Russian to move to a new job elsewhere,” Medvedev said last year. “That's why we need to support and encourage this.”

Another reason to ease movement around the country is a contraction of the working-age population that, according to the latest Economic Development Ministry forecast, will shrink by 500,000 people by the end of 2013 despite incoming foreign migrants.

The changes that Putin is seeking would end the disparity between Russians and foreigners, who have been using the simpler residence permit rules since 2007, said Poletayev and Vladimir Mukomel, a social studies researcher with the Russian Academy of Sciences.

In addition to Moscow, migrants mainly choose the Moscow region and the country's second-largest city, St. Petersburg, as a destination because of the relatively high pay, Mukomel said. Oil- and natural gas-producing regions such as Yamal-Nenets, Khanty- Mansiisk and Tyumen also draw labor from around Russia, he said.

Implemented alone, an ability to settle residence permit issues without excruciating hassles would not bring about much greater worker mobility, Mukomel said. A major problem migrants face is finding affordable housing, he said. Of all apartments, only 5 percent to 15 percent are available for rent in Russia, according to Leonid Davydov, chief executive of the state-run VTsIOM pollster. The shortage of supply prompts high rates, he said in an article published on the agency's web site last month.

Compared with the other large economies, Russia is home to some of the most reluctant people to look for a job outside of their native area. An average American moves 13 times in his life and a Briton seven times, but a Russia moves just 1.5 times, Davydov wrote.

Internal migration dropped by 12 percent last year to 1.7 million people, or the level circa 1897, he said.

Bne: Unemployment and demographics prompt residency rule reworking http://www.businessneweurope.eu/dispatch_text11882 bne June 7, 2010

Russia's ruling tandem, heavily involved in trying to ease barriers for foreign professionals to enter the country, is now moving to encourage greater mobility of labour amongst their compatriots. According to Vedomosti, PM Vladimir Putin has ordered federal agencies to simplify the rules for internal migration, which would make it easier to obtain new residency registration permits - the stamps that tie Russians to a single, official address.

Russians are amongst the least mobile workers in the world, the newspaper continues, with the average person moving house 1.5 times in their life. People in the US relocate an average of 13 times. This static profile has implications for employment - especially with Russia having several single-industry towns hit hard by the crisis - and regional development, in light of shrinking demographics of those of working age.

Signing an order on June 1, Putin demanded new proposals from a variety of ministries by August. The aim is to wipe out the two-day wait for a new residency stamp, and introduce application by post or online. Foreign migrants to Russia have operated under an eased residency system since 2007. Last year, President Medvedev urged Russians to move to improve employment opportunities.

It is hoped that easing the red tape involved in upping sticks would help reduce social welfare costs associated with single-industry towns, by encouraging laid off workers to leave for other areas to secure employment. However, Vladimir Mukomel of the Russian Academy of Sciences said that the low availability of affordable housing for rent is a bigger obstacle for most than the bureaucratic hurdles of residency. The simplified registration procedure is part of a government plan to create a federal public information system which will unite passport, address and reference records by 2012.

VOR: Press review http://english.ruvr.ru/2010/06/07/9221429.html

Jun 7, 2010 11:43 Moscow Time

The Russian printed media are focused on Dmitry Medvedev’s visit to Germany. The two countries’ leaders concentrated on disarmament, the Middle East conflict and the crisis of the Euro, writes the Vremya Novostei daily in an article. Angela Merkel believes that the Euro’s stability is a priority since it underlies further world economic development. Dmitry Medvedev agreed, adding that if the world financial system were to drop such a leg as the Euro now, the world would face by far worse a situation than the break-out of the crisis in 2008. He feels that a stable Euro is needed both by the Eurozone countries and their partners, such as Moscow.

The Chairman of the State Anti-Drug Committee Victor Ivanov elaborates, in an interview with the Rossiyskaya Gazeta, on the way Russian President Dmitry Medvedev’s important initiative, namely the creation of an international coalition against the Afghan drug threat, will be translated into life. To make the cultivation of opium poppy economically unprofitable, up to 50% of poppy plantations should be destroyed. Moscow cannot ignore the fact that opium poppy is growing like a weed in Afghanistan’s three northern provinces. It is in the north of Afghanistan that quite a few drug processing labs have been operational. Russia has come out with concrete moves to put paid to the dangerous situation, specifically to use chemicals to destroy the poppy crops.

Belarus is ready to join a three-way Customs Union on July 1 after outstanding issues are resolved, the Gazeta daily quotes Belarusian President Alexander Lukashenko as saying late last week. In May, Russia and Kazakhstan agreed to start the bloc without Belarus after talks stalled as Moscow refused to drop duties on the oil it supplies to Minsk. Moscow insists that customs check-points between Russia, Kazakhstan and Belarus should be in place till all the disagreements are settled.

The Ukrainian authorities have withdrawn a persona non grata status from Moscow Mayor Yury Luzhkov, the Izvestia newspaper reports. On May 12, 2008, Luzhkov urged Ukraine to return the Black Sea port of Sevastopol to Russia in a history-based statement that prompted official Kiev to ban Luzhkov from visiting Ukraine. On Monday, Sevastopol citizens hailed President Viktor Yanukovich’s move to offer an olive branch to Luzhkov, who has repeatedly indicated Moscow’s intent to shore up Sevastopol. And the Finnish authorities have deported a daughter of Finland-based Russian woman Valentina Putkonen, the Komsomolskaya Pravda daily reports. It cites Putkonen as complaining that she was not shown any deportation decision and that she was simply told that her 9-year-old daughter Yulia had been taken away from an orphanage she lived in. Last month, Yulia turned to the Child Protection Union after her mother refused to give her candies before dinner. The appeal was prompted by the girl’s father, a Finnish citizen and Valentina’s former husband, who signaled his readiness to get the custody of the child. Valentina was accused of physical abuse of her daughter, who was quickly sent to the orphanage. Right now, Valentina is desperately trying to contact her daughter, Komsomolskaya Pravda reports.

National Economic Trends http://www.interfax.com/news.asp

12:09 Interfax: RUSSIAN RESERVES INCLUDE SPANISH SECURITIES, BUT CENTRAL BANK ESTIMATES RISK OF DEFAULT AT NEAR ZERO – CENTRAL BANK DEPARTMENT DIRECTOR SHVETSOV

2010-06-07 08:12 Reuters: Weak oil drags Russian rouble down to 9-mth low http://www.iii.co.uk/news/? type=afxnews&articleid=7929384&subject=markets&action=article

MOSCOW, June 7 (Reuters) - The Russian rouble slumped to nine-month lows versus the dollar on Monday, tracking weaker oil prices and hurt by elevated risk aversion among investors worried about weak U.S. data and euro zone debt woes. The rouble eased as far as 31.88 per dollar, its weakest since September 2009 and down 80 kopecks, or some 2.6 percent from Friday's close. Oil prices -- a key source of cash for the economy and thus the main driver for the rouble -- eased to two week lows. "Our market is the most sensitive to oil prices," said Alexei Borichev, dealer at ING Bank. Weak U.S. data and ongoing concerns about euro zone debt woes also weighed on the rouble and Russian assets, given Russia's dependence on exports, and thus on the health of the global economy. Russia's RTS and MICEX fell by over 3 percent in early trade. Worries about the euro zone kept the euro under global pressure, allowing the rouble to hold broadly stable at 37.89 per unit of the single European currency. Versus the euro-dollar basket, which the central bank uses to monitor the exchange rate, the rouble eased as far as 34.65, before recovering somewhat to 34.53. "If by the end of the day the situation does not start to change, at least on oil or futures on U.S. indices, then the bi-currency basket may test May's lows (of 34.90)," said a dealer at a Russian bank.

Potential domestic positives for the rouble include higher-than-expected May inflation, which further closes the door for more interest rate cuts, and comments from the central bank that it may consider reducing so-called planned interventions.

(Reporting by Vladimir Abramov; Writing by Toni Vorobyova, editing by Mike Peacock) Keywords: RUSSIA ROUBLE/ ([email protected]; Tel: +7495 7751242, Reuters Messaging: [email protected])

Bloomberg: Europe Crisis Shows More Reserve Currencies Needed, VTB Says http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDfGu7zsfhso

By Jason Folkmanis and Van Nguyen

June 6 (Bloomberg) -- Exchange-rate swings stemming from Europe’s debt crisis have highlighted the risks of holding existing reserve currencies and more alternatives are needed, according to the chief executive of Russia’s second-largest bank.

The euro has slumped 16 percent this year and last week sank below $1.20 for the first time since March 2006 after Greece last month tapped a 750 billion-euro ($913 billion) emergency-loan package put together by the European Union and the International Monetary Fund. China, which has the world’s biggest foreign-exchange reserves, has voiced concern about the dollar’s future, with Premier Wen Jiabao having as recently as March expressed concern about its holdings of the U.S. currency.

“The recent financial instability shows, if not the complete failure of currencies like dollars and euros, but also the threats which are existing in the present financial system,” Andrei Kostin, chief executive of VTB Group, said at a press conference ahead of a World Economic Forum meeting in Ho Chi Minh City, Vietnam. “It led to more discussions of whether we would move to more reserve currencies.”

Russia and China are increasingly settling cross-border trade in their own currencies rather than U.S. dollars, according to Kostin.

“In the bilateral relationships, when we talk about Russia and China for example, we are moving slowly from dollar- denominated settlement to rubles and yuan,” he said. “The problems we have had in, for example, Europe, can instigate this attempt.”

Asia’s currencies need to trade more freely before they can be considered contenders, Kostin said. China, Hong Kong and Vietnam all link their currencies to the U.S. dollar, while central banks in Indonesia, South Korea and Taiwan have said this year they would act to stem volatility when necessary. “I would like to see a more liberal currency regime” in the region, Kostin said at a panel discussion during the WEF meeting.

To contact the reporter on this story: Jason Folkmanis in Ho Chi Minh City at [email protected] or Van Nguyen in Ho Chi Minh City at [email protected]

Last Updated: June 6, 2010 02:57 EDT

Alfa: Higher inflation in May confirms economic recovery; POSITIVE http://www.businessneweurope.eu/dispatch_text11882

Alfa Bank June 7, 2010

According to Rosstat, May inflation was 0.5%, which was higher than our expectation of 0.3% and the consensus forecast of 0.4%. We believe this confirms the economic recovery, signs of which emerged in April.

Russia's annual inflation rate has been declining since the beginning of the crisis due to low demand. In May, the 12M CPI figure remained unchanged vs. the April level of 6.0%, while since summer 2009 it had been declining rapidly. As there were no notable tariff increases, accelerated price growth in May is therefore a positive sign, suggesting that households are reducing their savings rate, which jumped to an unprecedented 15.8% in 1Q10. As we guided previously, strong manufacturing and housing construction recovery in April are coupled with better loan growth recovery, and are paving the way for economic growth to boost to 5-6% in 2Q10.

Faster inflation also potentially raises the question of withdrawing the stimulus package. However, monetary stimuli in Russia, i.e. $100 bln of refinancing facilities were already redeemed by banks last year. On the fiscal side, the consolidated budget ran a surplus of RUB310 bln in 4M10, mirroring the modest budget role in addressing the crisis. The key implication of faster price growth is that the refinancing rate is unlikely to be cut should annual inflation rate start growing, i.e. if monthly inflation in June is above 0.6%.

Natalia Orlova

VTB Capital: CBR surprisingly registers capital inflows in May http://www.businessneweurope.eu/dispatch_text11882

VTB Capital June 7, 2010

News: According to First Deputy Chairman of the CBR Alexey Ulyukaev, quoted by Interfax last Friday, Russia registered a small capital inflow in May, similar to the one recorded in March and in April (USD 3-4bn, according to the CBR). Ulyukaev also said that the CBR bought several hundred million dollars on the FX market last week. He added that a decline in the trade surplus might be a good enough argument to think about reducing the CBR's planned monthly FX interventions.

Our View: The positive capital inflows in May are a surprise, given the recent global market turbulence, and suggest that once there is more clarity on the European debt crisis we might see even stronger capital inflows (and, hence, more rouble appreciation).

The fact that the inflows in May were similar to those in April and March is even more surprising as the size of the FX interventions in May was almost certainly much lower than in March (USD 15bn) or in April (USD12bn).

One reason for the capital inflows might be the rouble appreciation against the euro, that balanced its weakness against the dollar and prevented a surge in FX purchases by households.

The fact that the CBR bought several hundred million dollars last week is consistent with the EPFR data, which also revealed the first inflow into funds, investing in Russian assets for three weeks.

Business, Energy or Environmental regulations or discussions

Bloomberg: Rosneft, Raspadskaya, Sberbank: Russian Equity Market Preview http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3DvcDFEOuQU

By Anna Shiryaevskaya

June 7 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index fell 1.3 percent to 1,333.49 at the close in Moscow. The dollar-denominated RTS Index dropped 2.3 percent to 1,360.74.

OAO Rosneft (ROSN RX): Rosneft and Crescent Petroleum Co. said they will consider cooperation in Iraq after signing their first joint venture to drill for gas in the United Arab Emirates. Russia’s largest oil producer fell 1.1 percent to 222.52 rubles in Moscow.

OAO Raspadskaya (RASP RX): A fire may have caused explosions at the Siberian coal mine, killing 90 people last month, Interfax reported, citing an unidentified person familiar with the investigation results. Russia’s safety watchdog Rostekhnadzor will make the findings public the coming week, the agency said. Raspadskaya declined 2.4 percent to 136.70 rubles. OAO Sberbank (SBER03 RX): Russia’s largest lender is due to report first-quarter results. Sberbank dropped 2.8 percent to 70.20 rubles in Moscow.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at [email protected]

Last Updated: June 6, 2010 23:00 EDT

Bloomberg: Russia’s RTS Declines; Lukoil, Sberbank, Gazprom Retreat http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arfMSR_xBXpo

By Alex Nicholson

June 7 (Bloomberg) -- Russia’s dollar-denominated RTS Index declined 2.5 percent to 1,326.98 as of 10:04 a.m. in Moscow. OAO Lukoil, OAO Sberbank and OAO Gazprom retreated.

Last Updated: June 7, 2010 02:05 EDT

Bloomberg: Russia Stocks Fall Most in 2 Weeks on Oil, Economy; Ruble Drops http://www.businessweek.com/news/2010-06-07/russia-stocks-fall-most-in-2-weeks-on- oil-economy-ruble-drops.html

June 07, 2010, 4:22 AM EDT

By Jason Corcoran

June 7 (Bloomberg) -- Russian stocks dropped by the most in almost two weeks as oil slid after U.S. employment rose less than economists estimated and concern grew that Europe’s sovereign-debt crisis is spreading. The ruble headed for its lowest level against the dollar in nine months.

Oil producer OAO Gazprom Neft fell 4.5 percent. OAO Uralkali, Russia’s largest potash producer, slipped by 5 percent. The Micex Index of 30 stocks fell by 3 percent to 1,291.3 as of 11:11 a.m. in Moscow, its biggest intraday drop since May 25. The ruble weakened 1.1. percent to 31.7600 per dollar, headed for its lowest close since Sept. 2.

Crude, the country’s chief export, fell as much as $2 to $69.51 a barrel in electronic trading on the New York Mercantile Exchange, after the U.S. Labor Department said on June 4 that payrolls rose by 431,000 in May. Hungary’s government reversed course over the weekend, saying there was no danger of default after global markets tumbled on government comments that suggested the country was at risk of a Greece-like crisis. “Oil is weaker after the U.S. labor market report for May came in below consensus,” Mark Rubinstein, deputy head of research at Metropol IFC in Moscow, said by phone today. “Hungary is weighing on sentiment, but is less of a factor because its economy is so small.”

Russia’s Micex has slumped 15 percent from its high on April 15 on growing concern that Greece’s sovereign debt crisis is spilling over to other European nations.

Metals Slump

Copper, which entered a bear market last week, slumped to the lowest price in more than seven months on the London Metal Exchange, losing as much as 3.2 percent to $6,076.25 a metric ton. All six metals traded on the London Metals Exchange fell.

The ruble was little changed against the euro at 37.9100. Those movements left the currency at 34.5188 against the central bank’s target basket.

Investors increased bets that the ruble will weaken further, with non-deliverable forwards showing the currency at 31.9373 per dollar in three months compared with an NDF of 31.7513 on June 4. The contracts are a guide to expectations of currency movements as they allow foreign investors and companies to fix the exchange rate at a particular level in the future.

--Editor: Alex Nicholson, Stephen Kirkland.

To contact the reporter on this story: Jason Corcoran at [email protected]

To contact the editor responsible for this story: Gavin Serkin in London at [email protected]

Emerging Markets: Investors seek 20% discounts on Russian IPOs http://emergingmarkets.me/2010/06/investors-seek-20-discounts-on-russian-ipos/ by admin on June 7, 2010

By Andrei Skvarsky

Investors are expecting discounts of between 15% and 20% on initial public offerings of Russian shares, according to a survey by Royal Bank of Scotland. Investors has previously sought discounts of about 10 percent but the recent market volatility and the poor performance of recent Russian listings will not have helped the cause for upcoming IPOs.

Russian sugar manufacturer Rusagro recently cancelled a domestic IPO on the Micex and RTS, pleading market volatility. Days before, Oleg Deripaska’s molybdenum miner Strikeforce Mining and Resources, delayed an IPO in Hong Kong.

However, investors believe he Russian economy may grow by between 3% and 5% this year, according to the findings of the survey, in which 35 institutional investors were questioned last month.

The proportion of investors concerned about Russia’s political environment has shrunk by 14%, though political influence remains one of the main risk factors. Other key sources of risk are oil prices, still the dominant force in the Russian economy, and corporate governance.

Retailing, real estate, telecommunications and media are considered to be the most attractive sectors to invest, according to the RBS findings.

Reuters: UPDATE1 – Petropavlovsk mulls Hong Kong iron ore listing http://www.lse.co.uk/FinanceNews.asp? ArticleCode=v3xed5964p4jina&ArticleHeadline=UPDATE_1Petropavlovsk_mulls_Hon g_Kong_iron_ore_listing

Mon, 7th Jun 2010 08:57 LONDON, June 7 (Reuters) - Russian miner Petropavlovsk said it continues to explore strategic options for its iron ore business including a possible listing on the Hong Kong Stock Exchange .

On Monday, it said leading Hong Kong-based investors agreed to take a $60 million equity stake in the group's non-precious metals division, valuing the iron ore operations at $860 million.

The miner has been looking to list the iron ore operations in Hong Kong to achieve a better valuation for the business.

(Reporting by Julie Crust; editing by Matt Scuffham) Keywords: PETROPAVLOVSK IRON ORE

([email protected]; +44 207 542 3847) Moscow Times: GE, Russia Discuss Power, Health Care Investment http://www.themoscowtimes.com/business/article/ge-russia-discuss-power-health-care- investment/407650.html

07 June 2010 Combined Reports

General Electric is in preliminary talks to expand its health care and power-generation operations in Russia, in what the company said Friday was a long-term, multibillion- dollar opportunity.

GE chief executive Jeffrey Immelt met Prime Minister Vladimir Putin and other government officials in Moscow on Friday. The meeting also included Russian Technologies chief executive Sergei Chemezov and Inter RAO acting chairman Boris Kovalchuk.

Putin said the country planned a modernization of its health care and power-generation systems, according to comments published on the government web site.

"You found very good spheres to apply your efforts," Putin said in the meeting, referring to the production of power-generating equipment and medical devices.

GE is the world's biggest provider of power-generation equipment as well as medical- imaging equipment and health information technology systems. The company has about 2,500 employees in 25 cities in Russia. It began operations in the country in the 1920s to develop electricity systems.

"I think that it will be world-class technology in both cases, with very strong partners," Immelt said, according to the Russian-language transcript. "That's why we believe we will be able to start production fairly quickly on excellent products for both the Russian market and for export."

He also thanked Putin for his help in finding Russian partners after their last meeting in Sochi, in September 2009.

Immelt has been pushing to expand into faster-growth regions, including Eastern Europe, and Russia provided about $1.6 billion of GE's $33 billion in revenue from emerging markets last year.

There can be no assurance that the discussions will lead to a definitive agreement, GE said in a statement.

Russian sales rose 25 percent in 2009, said Anne Eisele, a GE spokeswoman. Energy revenue more than doubled, while products in the technology-infrastructure segment, which includes aircraft engines, locomotives and health care, rose 23 percent, Eisele said. She declined to comment on the meeting with Putin.

(Bloomberg, MT)

VTB Capital: Putin suggests developing exchange trade of metal products and raw materials in Russia http://www.businessneweurope.eu/dispatch_text11882

VTB Capital June 7, 2010

News: According to Vedomosti, Prime Minister Vladimir Putin has ordered the government to start developing the groundwork for an exchange trade of metal products, coal, coke and iron ore products on the domestic market. Reportedly, the government should come up with the first suggestions by 1 August. Putin also ordered the government committees to develop long-term model contracts for metal products and raw materials.

Our View: Clearly, both initiatives are part of the government's recent attention to rising steel prices. The idea to set up an exchange trade of metal products and raw materials in Russia is not new and attempts to develop it were also taken in light of rising steel prices (in particular Mechel's case in 2008). Having said that, no significant progress has been made and at the moment we would not assume that there would be any rapid developments. An exchange trade of metal products, coal and iron ore is not a globally developed practice and is quite complicated due to the nature of the products. Therefore, it is not something that could be developed quickly domestically.

Regarding the model contracts, we assume that they would only set the major provisions of the contracts (recommendation of price formulas, delivery terms, insurance terms, etc) while all the conditions are to be signed by the parties. Therefore, they are unlikely to be of any strict regulatory nature and basically would have more of an advisory role. Still, it remains to be proven that this can be effective.

Steel Guru: Petropavlovsk weighs up iron ore options http://www.steelguru.com/news/index/MTQ5NTQ3/Petropavlovsk_weighs_up_iron_ore _options.html

Monday, 07 Jun 2010 It is reported that Petropavlovsk Plc is considering all options for its iron ore division including selling shares in the unit or bringing in a strategic partner.

Mr Jay Hambro chief investment officer said “We would like to get proper value for the iron ore business and we’re looking at lots of routes to pursue that. He said that another listing is one of those routes. No decision has been made and we continue to review all options.” Petropavlovsk is seeking to boost the value of the iron ore assets it bought last year. The London based company acquired the deposits in Russia when it purchased Aricom plc for EUR 294.5 million in April 2009 buying back a company it spun off in 2003.

Petropavlovsk agreed in March to a loan of about USD 400 million from Industrial & Commercial Bank of China to fund the first stage of its K&S iron ore project in Russia Amur region. The company is also developing the Kuranakh iron ore mine and plans to build a third at its Garinskoye deposit.

(Sourced from http://www.mining-journal.com)

Steel Guru: Russia coking coal exports in Q1 double http://www.steelguru.com/news/index/MTQ5NTQ4/Russia_coking_coal_exports_in_Q1 _double.html

Monday, 07 Jun 2010 It is reported that in January to March this year, Russia increased its coking coal exports by 2.4 times compared to the same period last year to 3.5 million tonnes with the share of coking coal exports in Russia's total coal export volume growing from 7.3% to 11.8%.

In Q1 2010, the main buyer of Russia coking coal was Ukraine to which was exported 1.19 million tonnes exceeding the volume from the same period last year by three times.

(Sourced from Interfax)

Steel Guru: Sberbank becomes major shareholder in two plants owned by MAIR http://www.steelguru.com/news/index/MTQ5NDc0/Sberbank_becomes_major_sharehold er_in_two_plants_owned_by_MAIR.html

Monday, 07 Jun 2010 Russia largest state owned bank Sberbank has announced that for the purpose of settlement of debts of Russia biggest ferrous scrap dealer MAIR Industrial Group, its subsidiary SBK Metal has acquired a 75% share in MAIR Rusvtormet Center which owns a Rostov region based billet producer and Stavropol region based rebar producing plant ie respectively Sulinsky Metallurgical Plant and Arzil.

The amount of the debt has not been disclosed.

According to the reports, in 2008 MAIR secured USD 2.25 billion in loans from Sberbank for the upgrade of STAKS which included the increase of its steelmaking capacities from one million tonnes per year to 2 million tonnes. However, due to the crisis the company did not implement its plans and was not able to repay its loans.

Arzil and STAKS have been idled from June and May last year respectively and now the new owner is developing a business plan for them and intends during the summer to restart operations. Both plants have been undergoing bankruptcy procedure for nearly a year.

(Sourced from www.steelorbis.com) Visit www.steelorbis.com for more

2010-06-07 08:37 Reuters: Russian car maker Sollers posts bigger '09 net loss http://www.iii.co.uk/news/?type=afxnews&articleid=7929428&action=article

MOSCOW, June 7 (Reuters) - Russian car maker Sollers said its net loss widen to 5 billion roubles ($157.6 million) in 2009 from 376 million roubles in 2008, mainly due to higher debt servicing costs and foreign exchange losses. Revenues fell 44 percent to 34.7 billion roubles, Sollers said in a Monday statement. (Reporting by Gleb Stolyarov; writing by Maria Kiselyova; editing by Toni Vorobyova) ($1=31.73 Rouble) Keywords: SOLLERS/RESULTS

([email protected], +7 495 775 12 42, Reuters Messaging: [email protected])

Process Control Today: Aker Solutions awarded contract for chlorine dioxide plant in Russia http://www.pandct.com/media/shownews.asp?ID=25295 07/06/2010

Aker Solutions has signed a contract with Ilim Group to supply an integrated chlorine dioxide plant for Ilim's pulp mill project in Bratsk, Russia. The contract value to Aker Solutions is approximately USD 18 million.

Aker Solutions will supply technology, engineering, equipment, site and commissioning services from its office in Vancouver, Canada, with support from its office in Moscow.

The 15 tonne/day integrated chlorine dioxide plant is scheduled for commissioning in 2012, and will complement Ilim's USD 700 million project to build a new, modern 720,000 tonnes/year pulp line at Ilim Group's existing Bratsk Mill.

The plant will utilize Aker Solutions' proprietary integrated chlorine dioxide process technology, which has been adopted by pulp mills around to world to gain production cost advantages, and to reduce their dependence on external chemical suppliers.

"Our contract with Ilim marks our first chlorine dioxide plant to be supplied within Russia, which is emerging as a key market in the pulp and paper industry. We look forward to executing this project successfully, and then building upon this success to serve the Russian pulping industry again in the future," says David Ley, Aker Solutions' Vice President and General Manager of Aker Solutions Canada Inc. UralSib: RBC: Onexim acquires 51% stake in RBC-TV Moscow for $80 mln http://www.businessneweurope.eu/dispatch_text11882

UralSib June 7, 2010

Company to receive sufficient funds to continue operations. Vedo- mosti reports today that Onexim has completed the acquisition of 51% of RBC-TV Moscow, a company which consolidates RBC (RBCI - Sell) assets, for $80 mln. Current RBC shareholders will be offered an ex- change of 100% of their shares for a 49% stake in RBC-TV Moscow, which will take two-three months. The company should have about $30 mln cash left after the first round of debt repayment, which should be sufficient to continue operations. 97% of debt holders reportedly agree on restructuring terms. The deal was subject to 85% of creditors agreeing to proposed debt restruc- turing, and 97% agreed. RBC has $230 mln debt, of which 50% should be converted into five-year ruble bonds with a 7% coupon. The rest is to be partially converted into eight-year bonds with a 6% coupon, and partially repaid in cash, with a discount for each creditor de- pending on his choice of bonds or cash.

Positive in short term; long-term shareholder value. The news of the injection of Onexim's money into RBC is likely to support the stock in short-term. Yet even under the management's business plan, RBC is not expected to become profitable on the EBITDA level until 2011, and company's prospects look uncertain; it has been losing market share for the last two years. The share of current minorities will be diluted, and we see no price upside. We reiterate our Sell recommendation on the name

Moscow Times: For the Record http://www.themoscowtimes.com/business/article/for-the-record/407668.html

07 June 2010

 The Energy Ministry sees oil output at offshore fields reaching 14.5 million metric tons this year (290,000 barrels per day), while gas produced offshore will likely hit 18 billion cubic meters, Deputy Energy Minister Sergei Kudryashov said Friday. (Bloomberg)  Russia saw “insignificant” capital inflow in May, Central Bank First Deputy Chairman Alexei Ulyukayev said Friday, Interfax reported. (Bloomberg)  Ukraine paid more than $730 million for gas supplies from Gazprom for the month of May on time and in full, state energy company Naftogaz Ukrainy said Friday. (Bloomberg)

Bne: Banking on gold http://www.businessneweurope.eu/storyf2Banking_on_gold Tim Gosling in Moscow June 7, 2010

Russian bank Uralsib has come up with a new strategy that aims to profit from mounting fear of a second wave to the global crisis. As the euro loses its value against the dollar and the ruble stutters from falling oil prices, the bank is offering customers the option of abandoning money altogether and opening accounts denominated in gold.

At the end of May, UralSib Bank launched new accounts for individuals where cash is automatically converted into precious metals, including gold and silver. Punters have to deposit a minimum of 100 grams of gold, or 10,000g of silver, worth $3,885 and $5,893 respectively. The interest rate depends on the term of the deposit, with options ranging from 181 to 732 days. "A time deposit in precious metals is interesting to depositors who prefer to diversify their savings," says Ilya Filatov, deputy chairman of the board at Uralsib. "We made sure of this when we launched the product in Moscow, Ufa and St Petersburg. That pilot product proved a success. A deposit in precious metals doesn't depend on exchange fluctuations and protects funds from inflation."

Golden bubble

The price of gold has risen steadily from a low of about $900 in July 2009 to trade around $1,200 on June 4 - almost double the price of $650 before the financial crisis exploded in the autumn of 2008. And some analysts worry that the gold market is in danger of developing a bubble.

With both the euro and the dollar under threat from massive sovereign debt levels and high deficits hurting most of the world's leading economies, no currency seems especially safe at the moment. And the ruble remains vulnerable to changes in the oil price. During the worst of the crisis, oil fell from its record high of over $140 per barrel to just under $40 in a matter of months, forcing the Russian government to spend over $200bn in a controlled devaluation that wiped some 30% off the ruble's value. Oil prices have since recovered to stabilize around $70, but if the Eurozone does break apart triggered by economic problems in Greece, then investors fear that the resulting economic slowdown will pull oil prices down again. "Investors have rushed back into gold in a move that resembles the scramble for bullion we witnessed [when the crisis struck]," says Andrey Kryuchenkov, a commodities analyst with VTB Capital in Moscow. "Global risk aversion has triggered heavy losses across most commodity and equity markets. But euro-denominated gold reached a fresh all-time high above €962 as the panic struck."

As one of the world's major producers, this flight to gold is benefiting Russia more than most. In 2009, Russian gold refineries increased their output by 11.25% to about 205.24 tonnes of gold. The country's biggest producer, Polyus Gold, has been steadily increasing production, and recently expanded into Central Asia by purchasing Kazakhgold. Likewise, Petropavlovsk, Russia's third-largest gold mine - part owned by British entrepreneur Peter Hambro - raised $50m in February to fund further expansion. "Gold is a counter-cyclical commodity, so when things are most uncertain the future of gold producers is the most secure," says Peter Hambro, chairman of Petropavlovsk, one of Russia's largest gold producers.

Russia Today: 4G battle heats up http://rt.com/Business/2010-06-07/4g-telecom-technology-communication.html/print

07 June, 2010, 10:39

With consumers just coming to terms with 3G, telecoms are looking at the next generation technology, with military concerns and profitability questions still unanswered.

The military says the operators are going a bit too fast, and haven’t used all the resources available for 3G technology. So there’s no need, they say, to be asking for access to 4G frequencies

Nikolay Tamodi, General Director at Voentelecom believes, however, that some companies themselves have little interest if 3G is yet to show a return on investment.

“From today’s point of view, it’s nonsense, but it’s the truth. The current operators are not interested in the development of this technology because the previous one, 3G, which has just been built, hasn’t paid for itself yet.”

However analysts like Alex Kazbegi from telecoms research at Renaissance Capital, believe companies need it for survival.

“If you’re not in the game you’ll be marginalized by the players who have this technology. Inevitably your service level will show you have wrong technology. It’ll either be speed, capacity or the ability to provide the services. The game now is you need to have it."

Figures provided by VimpelCom, one of Russia’s top three mobile operators, suggest how little the previous, third generation technology is used.

“According to our information, about 13 per cent of our subscribers use phones which support 3G technology in Russia I mean. The relevant figure in Moscow is over 17 per cent,” says Vimpelcom press-secretary Anna Aybasheva.

However, another mobile operator from the so-called big three, Megafon, claims that what you sow today, you will reap tomorrow.

“Data communications is growing rapidly. Investments in the mobile Internet sector have the fastest rate of return. This is a global trend. This will lead to growing profits from data communication in the next few years. And the portion of profits from mobile Internet will begin to dominate in the earnings of mobile operators,” Megafon COO, Valery Ermakov says.

One thing is for sure – and it’s a global trend – competition is only causing the cost of data communications to get cheaper.

Activity in the Oil and Gas sector (including regulatory)

RIA: Russia to toughen rules on oil, gas extraction http://www.businessneweurope.eu/dispatch_text11882

RIA Novosti June 7, 2010

Russia will toughen up environmental safeguards on oil and gas extraction, including offshore drilling, Deputy Prime Minister Igor Sechin said on Saturday.

The statement comes as clean-up procedures continue in the Gulf of Mexico following the worst oil slick in the history of the United States.

"Offshore extraction on the shelf poses a number of significant risks, so we will toughen environmental rules," Sechin said.

An explosion ripped through the Deepwater Horizon oil drilling platform, owned by BP, about 80 kilometers (50 miles) off the Louisiana coast, on April 20, causing a major oil spill in the Gulf of Mexico. The blast claimed the lives of 11 rig workers and injured another 17.

Repeated efforts to stop the oil gushing up from the seabed have met with failure and the spill poses a major threat to the Gulf of Mexico's flora and fauna.

Moscow Times: Novatek Won't Get Gas Export Rights http://www.themoscowtimes.com/business/article/novatek-wont-get-gas-export- rights/407652.html

07 June 2010 Combined Reports

Novatek will not get rights to export gas from Russia under a deal Gazprom asked its shareholders to approve at its annual meeting, Sergei Kupriyanov, a Gazprom spokesman, said Friday. Novatek may get rights to ship gas across Kazakhstan and back into Russia, Kupriyanov said.

The company's shares jumped as much as 7.9 percent on the MICEX after Interfax reported that Novatek, Russia's second-largest gas producer, could get rights to sell abroad from Gazprom, the gas export monopoly.

Novatek's closed up 2 percent, ahead of the broader market.

Before the clarification, Moscow-based brokerage RMG wrote in a research note that Novatek could have earned at least $1 billion to $1.5 billion in additional operating income in 2011 by exporting to foreign markets.

Domestic prices averaged about $60 per 1,000 cubic meters last year, the note said. Average export prices to former Soviet countries was $202, while the EU paid about $288.

(Bloomberg, MT)

07.06.2010

Oil and Gas Eurasia: Rosneft Commences Drilling With Crescent Petroleum in Sharjah Concession http://www.oilandgaseurasia.com/news/p/0/news/7542

A partnership between Sharjah-based Crescent Petroleum and Russia's Rosneft Oil Company commenced drilling June 5 on the first of four possible wells for natural gas in the Sharjah Onshore Concession (SOC) near Al Madam with an initial outlay of Dh220 million. The two companies have signed a farm-out agreement for the SOC under which they will together develop the concession comprising 1,243 square kilometres in Sharjah, adjacent to the Saja'a gas field. This is the first international investment in the Middle East for Rosneft, which is Russia's largest oil producer with more than $50 billion (Dh183 billion) in revenues. "We are quite confident there are going to be substantial reserves in this area. We estimate about 2.5 trillion cubic feet of gas," Crescent Operations Director Abdullah Al Qadi told Gulf News. "Seismic interpretation has identified two prospects in the southern part of the SOC and two leads in the centre and north," he said. "If we're lucky we'll also get some oil." Earlier Saturday, the farm-out agreement was signed by Badr Jafar, Executive Director of Crescent Petroleum Group, and Sergey Bogdanchikov, President of Rosneft, in the presence of Igor Sechin, Deputy Prime Minister of the Russian Federation and Chairman of Rosneft, and Omar Gobash, the UAE Ambassador to the Russian Federation. Rosneft has 49 per cent of the concession, with Crescent holding the remaining 51 per cent. The initial investment of Dh220 million will go principally towards exploration, including the drilling of two wells to an approximate depth of 14,800 feet. The two companies signed a strategic cooperation agreement on May 19 to jointly develop oil and gas opportunities in the Middle East and North Africa. The SOC-1 well on which spudding commenced yesterday will "hopefully be the first of many joint projects together across the region", said Crescent's Jafar. Rosneft is open to a partnership with Crescent in developing other oil and gas fields in the region, including Iraq, where the Sharjah-based company already operates. "Crescent is an excellent partner for Rosneft in the region. If a proposal regarding Iraq is made, certainly we will consider it," Rosneft Chairman Igor Stechin told reporters. Apart from Northern Iraq, Crescent operates in numerous countries, including Egypt, Pakistan, Yemen, Canada, Yugoslavia, Tunisia, Argentina and, of course, the UAE. Copyright 2010, Gulf News. All rights reserved.

07.06.2010

Oil and Gas Eurasia: Sintez Group Set To Exits Russian Arctic Shelf http://www.oilandgaseurasia.com/news/p/0/news/7541

The Sintez Group is about to sell its 50 percent stake in Arktikshelfneftegaz, the company which controls the license to the Medynsko-Varandey oil field in the Pechora Sea. State- owned Zarubezhneft is the most likely buyer of the stake. Sintez, which in period 2006-2008 fought a hard battle against Russian authorities for the right to keep its offshore licenses, is now about to leave its last asset in the Russian Arctic shelf. After having lost the right to develop the Pakhtusov and Admiralty structures, the company looks set to sell out of the Medynsko-Varandey structure, which holds an estimated 410 million tons of oil. Sintez controls 50 percent of Arktikshelfneftegaz, the license holder to the field. The remaining 50 percent is owned by the Federal Property Agency (Rosimushchestvo). Both Zarubezhneft and Gazprom Neft have shown interest in Arktikshelfneftegaz, newspaper Kommersant reports. However, it is Zarubezhneft which is most likely to take over the 50 percent stake. According to Kommersant, Sintez and Zarubezhneft have already signed a confidential deal on the issue. Zarubezhneft has long shown interest in engaging on the Russian shelf. With the takeover of Arktikshelfneftegaz, the company gets the shelf experiences necessary to be able to engage on the Russian shelf. According to Russian legislation, only companies with a minimum of five years of shelf experiences are allowed to hold offshore licenses and develop fields on the shelf. For Zarubezhneft, the deal with the Sintez Group is thus a stepping stone into shelf projects. And the company is unlikely to leave it with only the Medynsko-Varandey structure. The company has reportedly already requested the state to give it the license to Madachagsky field, also that located in the Pechora Sea. Copyright 2010, Barents Observer. All rights reserved.

Moscow Times: Siberia's Oilpump Services Is Bought by Baker Hughes http://www.themoscowtimes.com/business/article/siberias-oilpump-services-is-bought- by-baker-hughes/407640.html 07 June 2010 Reuters

SAN FRANCISCO — Baker Hughes, the world's third-largest oil-field services company, said Friday that it was expanding its stake in the massive Russian oil and gas market through its acquisition of Siberia-based Oilpump Services.

The deal, for an undisclosed amount, will double the U.S. company's share of the Russian market for electrical submersible pumps, or ESPs, which are used to increase the flow from a well, Baker Hughes said in a statement.

It is just the latest deal in the oil-field services sector, which has seen a flurry of takeovers in the past year as the major players seek to expand their service offerings to meet a growing need among their clients for one-stop shopping.

Oilpump Services is the second-largest ESP company in Russia, the world's largest ESP market with 70,000 installations, and Baker's purchase comes on the heels of it closing a $6.8 billion purchase of BJ Services in late April.

It also comes just over a year after smaller rival Weatherford International announced that it would buy the oil-field services unit of TNK-BP, Russia's third-largest oil producer, for $480 million.

Russia is Europe's biggest supplier of gas and pumps 10 million barrels of oil per day, making it the world's largest crude producer at current levels.

Moscow Times: Integra Sells Rig Maker http://www.themoscowtimes.com/business/article/integra-sells-rig-maker/407663.html

07 June 2010

Integra Group said Friday that it agreed to sell its Yekaterinburg-based heavy-drilling rig manufacturer for about $40 million to United Capital Partners, a private equity group.

Integra plans to focus on services and manufacturing of “higher technology products,” and will use the sale proceeds to fund its ongoing business, Integra said.

(Bloomberg)

VTB Capital: LUKOIL's AGM to approve USD 5bn loan from Sberbank http://www.businessneweurope.eu/dispatch_text11882

VTB Capital 07 June 2010 News: At its AGM on 24 June, LUKOIL is due to approve a ten-year, RUB 150bn (USD 5bn) loan from Sberbank.

Our View: The fact that LUKOIL is considering a major new loan is no surprise, since it is in line with the company's borrowing plans. Nevertheless, the news is likely to revive speculation about LUKOIL potentially buying back its 10% stake from Conoco. At the same time, the company has on a number of occasions dismissed any possibility of a deal with Conoco. Nonetheless, we believe there is always a chance of either the company or management stepping in and starting to buy up stock from the market. In any case, we see the news as positive for LUKOIL, with the higher leverage potentially allowing for additional cash distribution via dividends or buybacks. We are reiterating our Buy recommendation on the stock, with strong first-quarter reported free cash flow and yet higher leverage suggesting a potentially better near-term payout.

Gazprom

07.06.2010

Oil and Gas Eurasia: Gazprom Plans Agreement With Greek DESFA On South Stream http://www.oilandgaseurasia.com/news/p/0/news/7543

Gazprom plans to ink an agreement with DESFA on building the Greek segment of the South Stream project, RBK has reported. DESFA operates Greece's national gas transport system. Under the agreement, Gazprom and DESFA will set up a joint venture on an equal basis which will build and operate this segment of the pipeline. Greece joined the South Stream project in 2008. Gazprom, Eni and Electricite de France are working together on building the South Stream pipeline across the Black Sea. The marine segment of the pipeline is to pass along the bed of the Black Sea from the port Beregovaya compressor station on the Russian coast to the Bulgarian coast. It is to be 900 kilometers long and cross depths as great as 2 kilometers. The pipeline will have a capacity of 63 billion cubic meters of gas. Copyright 2010, Oil and Gas Information Agency. All rights reserved.

Interfax: Gazprom reduces gas production below 1.1 bcm a day http://www.kyivpost.com/news/russia/detail/68705/

2 days ago at 09:34 | Interfax-Ukraine Gazprom has reduced gas production to below 1.1 billion cubic meters (bcm) a day, according to data from the Fuel and Energy Central Dispatch Service. As recently as June 1 production was 1.109 bcm. Production fell to 1.096 bcm on June 2, although that was still 20.3% more than on the same day last year.

Daily production declined from 1.2 bcm to 1.1 bcm in just nine days, the steepest decline over a 0.1 bcm increment this year.

Production was 0.265 bcm below target on June 1 and 277.2 bcm below target on June 2, continuing a trend observed throughout most of May.

June is the month when Gazprom normally records its daily production minimum for the year. Last year that day came on June 21, when Gazprom produced 0.892 bcm. However, production in June 2009 was fairly stable, with just 0.06 bcm separating the minimum and maximum daily totals.

Overall gas production in Russia was 1.468 bcm on June 2, up from 1.206 bcm a year earlier.

Gas producers other than Gazprom are maintaining production at targeted levels.

Reuters: Gazprom sees no need for BP's Kovykta gas-UPDATE 1 http://www.forexyard.com/en/news/Gazprom-sees-no-need-for-BPs-Kovykta-gas-2010- 06-07T083816Z-UPDATE-1

Monday June 07, 2010 04:38:08 PM GMT GAZPROM-KOVYKTA/ (UPDATE 1)

* Comment comes as TNK-BP pushes Kovykta into bankruptcy

* Gazprom says has other fields to supply China

MOSCOW, June 7 (Reuters) - Russia's gas export monopoly Gazprom sees no need to develop the giant Kovykta gas field, it said on Monday dashing hopes of BP's Russian venture getting the field's owner to offer clarity on the future of the asset.

"From the point of view of long-term balance we don't see how gas from Kovykta can be used in the foreseeable future both for supplying the local region or for exports," Viktor Timoshilov, responsible for Gazprom's eastern projects, told a news conference.

Oil major BP's Russian venture, TNK-BP, said last week its unit that controls Kovykta had filed for bankruptcy as it could not repay loans to TNK-BP

Kovykta, which TNK-BP has controlled for about 15 years, had been meant to supply China before Moscow started asserting control over natural resources and made Gazprom a gas export monopoly. Russian officials have repeatedly threatened to withdraw the Kovykta licence from TNK- BP for low production volumes.

BP and its partners have argued that output targets for Kovykta set by the Russian government became too onerous after it was unable to supply China, because Russian demand did not make up the shortfall.

TNK-BP agreed to sell Kovykta to Gazprom for around $1 billion to cover its investment costs but the deal has never been finalised and talks have been suspended, as Gazprom's finances became stretched because of the financial crisis and unclear prospects of gas exports to China.

Kovykta is classified as a strategic field and under the current legislation only companies majority owned by Russian capital can develop it.

Deputy Prime Minister Igor Sechin said last month he expected a gas pricing deal with China by September and analysts have said it could be good news for the future of Kovykta as it is the closest field to Chinese borders.

Timoshilov said Gazprom would cope without Kovykta to supply China: "We don't have issues with resource base in this region". (Reporting by Vladimir Soldatkin, writing by Dmitry Zhdannikov)

RBC: Gazprom: Gas from Kovykta will not be in demand http://www.rbcnews.com/free/20100607122010.shtml

RBC, 07.06.2010, Moscow 12:20:10.Gazprom believes that natural gas from the Kovykta gas field will not be in demand by consumers, head of the Russian energy monopoly's Eastern project coordination department Viktor Timoshilov told a press conference today. "In terms of the long-term balance, we realize today that gas from Kovykta will not be in demand either in the Irkutsk region, or for export purposes," he said.

8:30 am, June 7, 2010 Crain’s Manchester Business: Gazprom takes control of Wilmslow smart meter firm http://www.crainsmanchesterbusiness.co.uk/article/20100607/FREE/100609927/- 1/breaking Russia's state-owned energy giant has taken full ownership of Wilmslow-based Truread, which has developed a smart metering system used by some of the country's biggest gas suppliers.

Gazprom Marketing and Trading, which bought a 30 per cent stake in March 2008, said the deal would “further strengthen TruRead's proposition as an innovative end-to-end smart energy management provider to both suppliers and end customers worldwide”.

The Russian group, which has not disclosed how much it paid, said the deal would widen its portfolio of “efficient, integrated energy solutions” for clients.

TruRead, which was previously majority-owned by chief executive Simon Slater, has developed its own proprietary technology, creating the pre-eminent one-stop-shop for smart metering solutions in gas, power and water management. Major customers include McDonalds and Bristol City Council.

The firm became operational in 2004 but only began to sign agreements with the major gas suppliers in late 2006. Its meters, which cost around £250-£300 per installation are now sold either directly to end users or rented via gas supply companies.

TruRead sees global potential for its technology, with the British government planning to make it mandatory for energy suppliers to install smart meters by 2014.

Gazprom, which has an office in Manchester, said it had been working with TruRead to develop cutting-edge smart metering technology, which will enable customers to monitor their energy consumption in real time, and achieve considerable savings on their energy bills.

Keith Martin, Commercial Director of Gazprom Marketing & Trading said: “I am very pleased that our partnership with TruRead over the last two and a half years has delivered a unique set of energy management market-oriented propositions. We believe in TruRead's potential to become the market leader in energy management services in what is a highly competitive market.

“Together we can deliver real bottom-line benefits to our customers on a global scale in terms of energy and cost savings in addition to enhanced customer experience. The combination of Gazprom's significant expertise in understanding its corporate customers' needs, and TruRead's market leading technology, will make for a winning business formula."

TruRead founder Slater said: “We are very excited about this development. We are certain that Gazprom Marketing & Trading's expertise and support will enable us to deliver more affordable and integrated smart energy solutions to our growing customer base. In addition to the driver provided by current UK legislation; making smart meters mandatory, our partnership will also allow us to expand our footprint of activities globally, and to allow consumers in other markets to benefit from the energy solutions pioneered here in the UK.”

Slater was introduced to Gazprom following the latter's purchase of Wilmslow-based Pennine Natural Gas in June 2006 for an undisclosed sum.

Comments? [email protected]

07.06.2010

Oil and Gas Eurasia: SOGAZ To Insure Gazprom Neft Shelf Vessels

The SOGAZ insurance group has won a tender to insure vessels for Gazprom Neft Shelf (earlier known as Sevmorneftegaz), the company reported in a news release. Under the terms of the tender, SOGAZ will insure Gazprom Neft Shelf's Yuriy Topchev and Vladislav Strizhov multi-functional ice-breakers as well as its Sevmorneftegaz floating platform. SOGAZ will also insure the company's civil liabilities for third parties as it operates these vessels. the aggregate limit on the liabilities is 3.96 billion rubles. The contract is for one year. Gazprom Neft Shelf is a 100-percent Gazprom subsidiary and is building infrastructure on the shelf of the Pechora Sea and conducting geological surveys on Gazprom's licensed blocks on the Yamal peninsula and in Yakutiya. Copyright 2010, SOGAZ. All rights reserved.

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