Basic Political Developments s8

Russia 101019

Basic Political Developments  US to promote dialogue with Russia – Philip Gordon: . According to the official, the two countries have concluded a treaty on strategic offensive arms reduction, have agreed transit cargo shipments to Afghanistan via Russia and have brought their stands on Iran closer together, specifically preventing the S-300 air defence systems from being delivered to the Islamic Republic.  Russian-French-German talks begin in Deauville - The leaders of Russia, France and Germany have started in French Deauville negotiations within the framework of a three-party summit meeting. This is the first meeting of Russian, French and German leaders in such format in the past five years. o Russian-French-German summit gets under way at Deauville - The summit agenda features Russian-European cooperation in the fields of economy and security, and also Russia-NATO relations, preparations for the next G-20 summit, and Iran’s nuclear problem. o Russia, France and Germany talk security at seaside summit - There was no immediate reaction from the Russian party to the news, but a news conference was planned later in the day. Reporters were also keen to know whether Medvedev had accepted an invitation to next month's NATO summit. o Russian, French, German leaders to have meeting in trio format - Trilateral talks are due to continue Wednesday morning. Taking part in them on the Russian side will be the Russian President’s aides Sergei Prikhodko and Arkady Dvorkovich, the presidential press secretary Natalia Timakova said. Upon the outcome of the meeting the leaders will address reporters at a press conference. o Russia wants better security for Europe - Russia is interested in better security for Europe. Moscow hopes that Russia’s proposal for concluding a new relevant treaty, as well as other efforts to that end will evoke an adequate response in the world, says President Dmitry Medvedev. o French Talks Focus On Russia's Role In Europe's Security - French Talks Focus On Russia's Role In Europe's Security o Medvedev to raise visa-free travel issue at Deauville talks: aide o Medvedev to be invited to fringes of Lisbon Nato summit - Moscow officially regards Nato as the greatest threat to its security, however, and remains hostile to the organisation’s plans to develop an anti-missile defence system. Russia’s ambassador to Nato, Dmitry Rogozin, said Moscow was wary about accepting such an invitation and needed more details about an offer to cooperate over missile defence. o France and Germany seek to 'anchor Russia to the West' - France and Germany launched a joint drive to 'anchor Russia to the West' at a three- way summit on Monday in northern France billed as sealing a new era of co-operation between Moscow and Europe. o At Deauville, Europe Embraces Russia - Both Paris and Berlin have sought to reassure Washington in recent days by stressing that the three- way meeting had none of the anti-American undertones of the Paris- Berlin-Moscow axis that emerged in the wake of the U.S.-led invasion of Iraq in 2003. o Europe Should Be Careful of Smiling Bears - By Janusz Onyszkiewicz  Participants in Munich Security Conf to hold visiting session in Moscow - Russian Foreign Minister Sergei Lavrov, Security Council Secretary Nikolai Patrushev, Deputy Prime Minister Sergei Ivanov, notable politicians, and diplomats are expected to attend the session.  Russian General Staff chief starts visit to Serbia - The chief of the Russian General Staff, Army Gen. Nikolai Makarov, is starting a two-day visit to Serbia on Tuesday, the Russian Defense Ministry said.  Polish govt. to approve Russian gas supply agreement - The Polish government will on Tuesday approve an agreement with Russia on natural gas supplies initialed in Moscow on Sunday, said Waldemar Pawlak, a deputy Polish prime minister.  Russian, Ukrainian experts to discuss nuclear cooperation - Representatives of Russian state nuclear corporation Rosatom, nuclear fuel company TVEL, nuclear power plant operator Rosenergoatom, Ukraine's Fuel and Energy Ministry and other organizations will deliver speeches.  India, Russia to hold army exercises in Uttarakhand - Two hundred soldiers each from the Indian and Russian armies will share warfare techniques during joint counter-terrorism exercises in Uttarakhand from Wednesday, an official here said.  Medvedev to discuss energy co-operation in Turkmenistan - Russian President Dmitry Medvedev will discuss energy co-operation during a scheduled visit to Turkmenistan October 21-22, Turkmenistan.ru reported October 18, quoting Turkmen President Gurbanguly Berdymukhamedov's press office. The two governments plan to sign various agreements during the summit. Uzbek President Islam Karimov, who is visiting Turkmenistan too, is expected to participate in the talks. o Medvedev to Travel to Ashgabat; Turkmen Dissidents Denied Entry to OSCE Meeting  Russia to expand number of Moldovan wine suppliers - chief doctor: "Fourteen out of the stated 17 enterprises were checked; we will soon start the procedure of... expanding the number of wine suppliers," Onishchenko said.  All militants who broke into Chechen parliament killed – Kadyrov (Part 2) o Gunmen, suicide bomber attack Chechen parliament and ministry building - At least six dead, including four attackers, after clash with security forces o 3 killed, 17 injured in Chechen parliament attack – investigators o Operation in Chechen parliament building over o All terrorists in Chechen parliament attack ‘eliminated’ (Update 3) o All militants in Chechen parliament raid killed o At least 3 killed, 13 injured in Chechen parliament attack o Gunmen attack Chechen parliament in Grozny o Gunmen Attack Parliament in Chechnya o Chechen rebels attack Parliament and the Ministry of Agriculture in Grozny o Shootout erupts in Chechen Republic  2 Jailed in Ruslan Yamadayev's Killing - The Moscow City Court handed down the lengthy sentences to the gunman, Aslanbek Dadayev, 33, and the driver, Elimpasha Khatsuyev, 39, after a 15-week trial, a lawyer for a third defendant on trial, Musa Khadisov, told The Moscow Times.  FACTBOX - Facts about Russia's Chechnya republic  Soyuz-2 carrier rocket for first time to orbit US Globalstar sats  Border crossed once every four seconds - Border traffic between Russia and Finland is boosting to an all-time high peak this year. If the traffic continues for the last few months, 2010 is seeing an increase of about ten percent, reports Helsingin Sanomat.  Medvedev nominates governors of Ivanovo region, Perm territory  New Moscow mayor is a friend of Putin, not of free press - Sergei Sobyanin is the Kremlin's man of choice to become the new mayor of Moscow. He is scheduled to be voted in this week and likely to back the regime with little regard for dissenting voices.  The New Sheriff in Town - Strategy 31 Activists Say Sobyanin’s Appointment Could Make It Easier to Demonstrate in Moscow, but It Also Means City Hall Is Now Under Federal Control  I – complementing The Independent: Russian media tycoon Alexander Lebedev, owner of the London-based Independent Print publishing house will launch his new periodical “I” on October 26th.  Critical Russian Newsweek magazine folds  Novaya Gazeta Fears Shutdown in 2011  De Niro caught in Russian visa snafu  All-Russia Internet conference to open in St Petersburg  Russian Press at a Glance, Tuesday, October 19, 2010 o The leaders of France, Germany and Russia are meeting in Deauville in northern France. Nicolas Sarkozy and Angela Merkel are expected to formally react to Dmitry Medvedev's European security pact initiative. o Sergei Sobyanin, Russian President Dmitry Medvedev's nominee for the Moscow mayor, has met with the ruling United Russia party and the Communists. He confessed that he does not have a clear program of action but has the experience and knowledge to resolve problems. o The Moscow mayor saga is not proof of conflict within the Medvedev- Putin tandem. o Prime Minister Vladimir Putin told foreign investors on Monday that the government was ready to privatize attractive stakes in state companies, but asked that they contribute "smart investments" of technology and know- how to improve the Russian economy. o Russia's chief sanitary doctor Gennady Onishchenko said Moldovan winemakers had "learned their lesson well" and "forgave" 14 Moldovan wine producers who were previously out of favor with the Russian consumer rights watchdog Rospotrebnadzor. Onishchenko made the statement after a group of Russian experts returned from a trip to Moldova, where they inspected wineries. o A Chechen convicted of killing Ruslan Yamadayev, a former State Duma deputy and powerful rival of Chechen President Ramzan Kadyrov, on a Moscow street in 2008 was jailed for 20 years Monday, while the Chechen who drove the getaway car got 15 years. o Russia's Supreme Court has supported a bill in line with which officials who take small bribes will be fined rather than jailed. o The Khimki town court freed from custody opposition activist Maxim Solopov, accused of attacking the town administration building in late July. The court obliged Solopov not to leave the town. Human rights advocates praised the ruling. o The Russian oil industry needs a new tax regime and over 7 trillion rubles ($230 billion) of investment, according to a draft general plan of the industry's development until 2020. o Russian Prime Minister Vladimir Putin, speaking at a meeting of the advisory board on foreign investment, declared First Deputy Prime Minister Igor Shuvalov an "investment ombudsman."  Russian General Staff to Experiment with ‘Mono-Ethnic’ and ‘Mono-Religious’ Units - In “Nezavisimaya gazeta” today, Vladimir Mukhin reports that because of the growth of “dedovshchina” in the Russian military – officials say it is up by more than a third over the last year – the General Staff is studying the experience of “the Savage Divisions” as the mono-ethnic units at the end of the Russian Imperial period were known (www.ng.ru/printed/246560).

National Economic Trends  Ruble Snaps Two-Day Drop Versus Dollar, Gains Against Euro  Banks have 521.5 bln rbs on CBR correspondent accounts on October 19  Corn Crop Likely Down, Imports Up - The corn crop may fall 24 percent this year, increasing the need for imported supplies, SovEcon said Monday.  Cracking the Piggy Bank - Upcoming Elections May Put Russia’s Reserve Fund in Danger of Destruction

Business, Energy or Environmental regulations or discussions  Russia to deliver on its Kyoto pledges - Three new hydropower plants near Moscow, in Siberia and the Urals should reduce Russia’s share of gas pollutants in the atmosphere by 4.3 million tons already in 2012.  Gazprom, Novolipetsk, Razgulay, Polyus: Russian Stocks Preview  Oligarch M&A Power Shown by Lowest TNK-BP Yields: Russia Credit  UPDATE 1-Russia NLMK to up Q4 exports on domestic weakness  Alrosa May Seek to Raise $2.5 Billion in IPO, Kommersant Says  Rothschild Bought More Rusal Shares After IPO, Vedomosti Says  UralChem May Revisit London IPO Plan, Sell $525 Million of Bonds  O'Key to raise up to $491 million in London IPO  Russian tycoon Prokhorov's Intergeo to sell coal assets to India's NMDC - paper  PepsiCo to invest $140 million in Russian plant  Sukhoi narrows IFRS net losses 20% to $91 mln in 2009 (Part 2)  Interros Ends Rusal Accord Over ‘Destructive Actions’ at Norilsk  Russia's Interros to support current board at EGM  Acron mulls IPO of Canadian potassium subsidiary  Norilsk Nickel said Monday that its first shipment of metals to Shanghai, China, via the Arctic Ocean arrived in Shanghai. (Bloomberg)  Central Bank Chairman Sergei Ignatyev said Monday that Russia should ensure that creditors of International Industrial Bank get paid. (Bloomberg)  The government may grant extraction tax breaks for up to 12 years for liquefied natural gas produced on the Yamal Peninsula, according to a statement on the government’s web site on Monday. (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)  Russian court declares TNK-BP's Kovykta insolvent  Russia invites BP, Total to offshore oil projects  LNG construction on Yamal in 2012

Gazprom

 Gas Curtain Divides Europe - Russia may enjoy good economic and political relations with Western Europe now – but will this always be the case? After Nord Stream is launched, it will be interesting to see how Russia handles its European gas monopoly over Western Europe.

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Full Text Articles

Basic Political Developments

US to promote dialogue with Russia – Philip Gordon http://english.ruvr.ru/2010/10/19/26923344.html

Oct 19, 2010 09:57 Moscow Time The United States is content with its dialogue with Russia and will steadily promote it. This came in a statement by the Assistant Secretary of State for the Bureau of European and Eurasian Affairs Philip Gordon. According to the official, the two countries have concluded a treaty on strategic offensive arms reduction, have agreed transit cargo shipments to Afghanistan via Russia and have brought their stands on Iran closer together, specifically preventing the S-300 air defence systems from being delivered to the Islamic Republic. The START treaty that the Russian and US Presidents, Dmitry Medvedev and Barack Obama signed in Prague on April 8th this year provides for reducing the two countries’ nuclear arsenals and delivery vehicles by one third.

Russian-French-German talks begin in Deauville http://www.itar-tass.com/eng/level2.html?NewsID=15602332&PageNum=0

19.10.2010, 12.15

DEAUVILLE, October 19 (Itar-Tass) - The leaders of Russia, France and Germany have started in French Deauville negotiations within the framework of a three-party summit meeting. This is the first meeting of Russian, French and German leaders in such format in the past five years.

The Russian-German-French mechanism of cooperation was launched at an informal meeting of the three countries’ leaders in Moscow in March 1998. According to Russian president’s aide Sergei Prikhodko, it is “a convenient format, so that we could consider a common vision (of events) in a trustworthy and candid atmosphere, since these are our partners in Europe, with whom we have a very large volume of cooperation”.

Russian-European cooperation in the sphere of economy and security, relations between Russia and NATO, preparations for a G20 summit as well as Iran’s nuclear problem are on the agenda. The Russian president expects support of his colleagues from France and Germany in the soonest settlement of the visa-free travel issue between Russia and the European Union.

Russian-French-German summit gets under way at Deauville http://english.ruvr.ru/2010/10/19/26977756.html

Oct 19, 2010 12:34 Moscow Time

Dmitry Medvedev, Nicolas Sarkozy and Angela Merkel have started talks at the French town of Deauville in what is the three leaders’ first meeting in this format in the past five years.

The Russian-German-French interaction mechanism was set up during the three countries’ leaders’ informal meeting in Moscow in March 1998.

The Russian President’s aide Sergei Prikhodko feels that the format is quite comfortable since it provides a confiding atmosphere that encourages outspokenness in discussing problems with Russia’s closest European partners, known for huge cooperation amounts with this country, and helps compare our common vision. The summit agenda features Russian-European cooperation in the fields of economy and security, and also Russia-NATO relations, preparations for the next G-20 summit, and Iran’s nuclear problem.

The Russian President is looking for support from his French and German colleagues for a speedy solution to the issue of visa-cancellation between Russia and the European Union. Medvedev, Sarkozy and Merkel are due to hold a press conference following their talks.

Russia, France and Germany talk security at seaside summit http://www.expatica.com/fr/news/french-news/russia-france-and-germany-talk-security- at-seaside-summit_104061.html

Russian President Dimitry Medvedev discussed European security Tuesday with French President Nicolas Sarkozy and German Chancellor Angela Merkel amid renewed violence in Chechnya.

The three leaders were in the French resort of Deauville for talks on a new European security partnership as news broke that alleged Chechen separatists had attempted to storm the parliament in the southern Russian republic.

There was no immediate reaction from the Russian party to the news, but a news conference was planned later in the day. Reporters were also keen to know whether Medvedev had accepted an invitation to next month's NATO summit.

Medvedev and Sarkozy were expected to face questions on whether they had agreed a deal for France to sell Russia four modern warships, a potential contract that has raised concerns among some of Paris' allies.

The Deauville talks were not expected to lead to any other major announcements but, two decades after the end of the Cold War, they have been billed as a step towards a new pan- European security partnership.

Supporters of the plan -- which has been endorsed in various forms by all three leaders in the past -- hope to welcome Moscow into the Euro-Atlantic community and build a common defence from "Vancouver to Vladivostok".

"We will discuss whether it is possible for Russia and NATO to cooperate better, because the era of the Cold War is definitely over," Merkel said on Saturday in her weekly video message.

"The Russian president has proposed a common security architecture. He is working step- by-step to define this architecture -- of course in a spirit of partnership of all European countries with Russia," she said. A senior official at Sarkozy's Elysee Palace said: "It'll be a kind of brainstorming session, to get to the bottom of thoughts and second thoughts.

"Russia seems to be looking more and more towards the West, and Deauville will be a chance to reinforce this development, which we see as positive."

French officials cite the examples of Russia's signing a new nuclear arms reduction treaty with the United States, its cooperation on the Afghan crisis and its "scrupulous" application of the latest sanctions against Iran.

Some NATO allies, in particular the former Soviet satellites in Eastern Europe, are suspicious of their neighbour, pointing to the 2008 war in Georgia.

British ties with Russia were strained by its refusal to extradite a suspect in the murder in London of a former Russian agent and Washington fell out with Moscow over former US plans to site a missile defence system in Europe.

Medvedev's top foreign policy advisor confirmed that closer ties with NATO would be on the agenda in Deauville, including Russia's long-term goal of a formal new joint European security framework.

"Promoting Dmitry Medvedev's initiative -- the European security treaty -- is naturally of priority significance for us," Sergei Prikhodko told reporters at the Kremlin ahead of the summit.

But while Russia's ties with NATO as a whole have often been difficult, the Kremlin has proved adept at dealing directly one-on-one with European powers, in particular France and Germany.

NATO will unveil its new security concept next month at its summit in Lisbon, and Western leaders hope Medvedev will confirm in Deauville that he will attend the meeting and give his support to their vision.

Russian, French, German leaders to have meeting in trio format http://www.itar-tass.com/eng/level2.html?NewsID=15601224&PageNum=0

19.10.2010, 08.42

DEAUVILLE, October 19 (Itar-Tass) - Following an interval of five years, leaders of Russia, France and Germany are resuming negotiations in the format of the Big Three. Russian President Dmitry Medvedev, German Chancellor Angela Merkel and French President Nicolas Sarkozy have gathered in the small resort town of Deauville on the English Channel coast, 200 km from Paris, to discuss the problems of world politics.

Leaders of the three countries came to Deauville Monday night and met at a working dinner.

Trilateral talks are due to continue Wednesday morning. Taking part in them on the Russian side will be the Russian President’s aides Sergei Prikhodko and Arkady Dvorkovich, the presidential press secretary Natalia Timakova said. Upon the outcome of the meeting the leaders will address reporters at a press conference.

"A tripartite meeting is not an exclusive club for the development that would be isolated from other states and international organizations,” Prikhodko said.

“Yet this is a convenient format, so that we could consider a common vision /of events/ in a trustworthy and candid atmosphere, since these are our partners in Europe, with whom we have a very large volume of cooperation,” he told Itar-Tass.

“We speak in favor of any useful formats and the Russian side believes the format of the Big Three is very useful as a supplement to other regular Russian-European summits, like the G8 or the G20,” Prikhodko said.

He recalled that the idea of a “Russian-German-French mechanism of interaction sprang up in March 1998 at an informal trilateral summit in Moscow and the troika’s major task then was to assist the rise of a multirpolar world ruling out the domination of just one single power.”

Russia wants better security for Europe http://english.ruvr.ru/2010/10/19/26919869.html

Oct 19, 2010 09:30 Moscow Time Russia is interested in better security for Europe. Moscow hopes that Russia’s proposal for concluding a new relevant treaty, as well as other efforts to that end will evoke an adequate response in the world, says President Dmitry Medvedev. He put forward the idea of a new security treaty for Europe in Germany two years ago. Today he will again take up the issue at Deauville, on France’s Normandy coast, where the Russian and French Presidents, and the German Chancellor are meeting for a second consecutive day. On Monday night Dmitry Medvedev, Nicolas Sarkozy and Angela Merkel had an informal meeting. Today their official talks are also focused on economic cooperation and boosting political ties. Yet another important issue is the cancellation of visas between Russia and the European Union. French Talks Focus On Russia's Role In Europe's Security http://www.rferl.org/content/French_Talks_Focus_On_Russias_Role_In_Europes_Securi ty/2194417.html

October 19, 2010 By RFE/RL The leaders of France, Germany, and Russia have arrived in the French seaside resort town of Deauville for the start of two days of meetings focused on Moscow's role in Europe's changing security architecture.

French President Nicolas Sarkozy hosted German Chancellor Angela Merkel for a one- on-one meeting on October 18 before being joined by Russian President Dmitry Medvedev.

The three leaders are scheduled to brief the press early on October 19 on the substance of their talks.

The meeting comes a month ahead of NATO's unveiling of its new strategic concept for the next decade at a summit in Lisbon on November 19-20.

The alliance's blueprint for the next 10 years is expected to address 21st-century threats like cyberwarfare and missile defense, and for the first time, is not expected to characterize Russia as a threat.

In a speech earlier this month previewing NATO's new strategic concept, Secretary- General Anders Fogh Rasmussen described Russia as a "partner" in a range of collective endeavors ranging from counterterrorism activities to a possible joint missile-defense venture.

The French meeting is expected to build on that more cooperative stance with Russia ahead of Lisbon.

Sarkozy's office said on October 15 that the French leader "wants to relaunch NATO relations with Russia with concrete suggestions, as well as holding a NATO-Russia summit" on the sidelines of Lisbon.

Rasmussen has announced that Russian President Medvedev is likely to travel to Lisbon to attend the summit meeting, but Dmitry Rogozin, the country's ambassador to NATO, said Moscow was wary about accepting the invitation without more details about the bloc's missile-defense plan.

Last week, he told the Russian news agency ITAR-TASS: "We do not want to be hit with any surprises in Lisbon. We need to understand what this means in principle -- the parameters of the missile-defense system, who it will be aimed against, who will press the button." The United States and NATO say the system is aimed against a missile threat from Iran, but Moscow is concerned it could also be used to counter Russia's long-range nuclear arsenal. Sarkozy and Merkel are expected to try and assure Medvedev otherwise and obtain his commitment to come to Lisbon.

New 'Security Architecture'

But Medvedev is also expected to push for movement on his own agenda and to seek assurances that Moscow will be given greater say in shaping the continent's security policy.

Last November, the Russian president released a draft of a proposal for a new European security agreement that envisioned an alternative to institutions such as NATO and the Organization for Security and Cooperation in Europe (OSCE).

The proposal has largely fallen on deaf ears in Brussels, where some see it as the Kremlin's attempt to counter the West's influence in Eastern Europe.

Before leaving Moscow for Deauville, Medvedev said he was still waiting for a concrete response. "We would like this potential document, and other efforts that our country is making in the area of providing security, to be met with a worthy response in the world," he said.

Analysts say the Russian leader may be betting on continental power players Germany and France -- which have good relations with Moscow -- to help facilitate wider European acceptance of Russia's ambitions for an expanded security role.

In her weekly video address on October 16, Merkel said Medvedev was "working step- by-step to define this [security] architecture -- of course in a spirit of partnership of all European countries with Russia."

In June, Medvedev and Merkel issued a joint memorandum that foresaw the creation of an EU-Russia political and security community.

For its part, France has stood behind plans to sell warships to Russia, despite concerns from other NATO members that it could endanger countries on Russia's periphery, including Georgia.

The two-day meeting comes during a period of significantly improved relations between Russia and Europe, with Medvedev spearheading a push to be more open to the West.

Other topics set to be taken up include Russia's goal of winning visa-free access to EU countries and the EU's desire to forge stronger energy deals with Russia.

Russia's role in Europe's "frozen conflicts" -- including the struggle over Moldova's separatist Transdniester region -- is likely to come up, as well. with agency material

Medvedev to raise visa-free travel issue at Deauville talks: aide http://www.itar-tass.com/eng/level2.html?NewsID=15601182&PageNum=0

19.10.2010, 08.00

MOSCOW, October 19 (Itar-Tass) - Russian President Dmitry Medvedev expects support of French President Nicolas Sarkozy and German Chancellor Angela Merkel in the soonest settlement of the visa-free travel issue between Russia and the European Union.

This issue will be discussed at the Deauville meeting, presidential aide Sergei Prikhodko said. The leaders of the three states arrived in Deauville on Monday and met at a working lunch. Three-party talks will continue on Tuesday.

"These kinds of meetings, which give political impulses, bring the partners closer to the understanding of the necessity of real work," Prikhodko said, underlining that "given the scope of travelling, much depends on the position of France and Germany. Dmitry Medvedev hopes for their support."

"At the same time, we understand our responsibility. /Germany and France/ are competent conversation partners, the ‘heavyweights,’ who have the right to ask questions of their own, such as the system of registration of foreigners in Russia, and we're ready to treat the questions of our leading partners as seriously," the presidential aide said.

Medvedev to be invited to fringes of Lisbon Nato summit http://www.irishtimes.com/newspaper/world/2010/1019/1224281443358.html

RUADHÁN Mac CORMAIC in Deauville

RUSSIA’S TENSE relationship with Nato will dominate the agenda when President Dmitry Medvedev joins his French and German counterparts at a security summit in the French seaside town of Deauville today.

The two-day meeting is described by French officials as a tripartite “brainstorming” session in advance of an important Nato summit next month and France’s chairmanship of the G8 and G20 next year. The French and German leaders see it as an opportunity to consolidate their improving ties with Russia and to draw Moscow deeper into what the Élysée Palace calls “a common economic, human and security space” between Europe and Russia. Mr Medvedev arrived in Deauville last night to be greeted by Mr Sarkozy and Dr Merkel before the three leaders dined together at a local restaurant. At their formal summit meeting this morning, it is understood Mr Medvedev will be invited to attend meetings on the fringes of next month’s Nato summit in Lisbon, where leaders of the Atlantic alliance are due to approve a new strategic doctrine.

Moscow officially regards Nato as the greatest threat to its security, however, and remains hostile to the organisation’s plans to develop an anti-missile defence system. Russia’s ambassador to Nato, Dmitry Rogozin, said Moscow was wary about accepting such an invitation and needed more details about an offer to cooperate over missile defence.

While Nato says the plan is aimed against a missile threat from Iran, Moscow is concerned it could also be used to counter Russia’s long-range nuclear arsenal, weakening its deterrent and leaving it vulnerable.

“We do not want to be hit with any surprises in Lisbon. We need to understand what this means in principle: the parameters of the missile defence system; who it will be aimed against; who will press the button,” Mr Rogozin told Russian media this week.

Mr Medvedev is expected to reiterate his call for a new security treaty in Europe, although France and Germany have rallied around Berlin’s idea for a less formal EU- Russia “political and security committee” to structure closer discussions. Paris sees the tripartite summit – the first since 2006 – as an opportunity to build on the still fragile improvement in political and economic co-operation between Russia and Europe. “Russia seems to us to be rediscovering the merits of a co-operative attitude towards western countries,” a French official said. “It will be a chance . . . to consolidate this positive change.”

France and Germany seek to 'anchor Russia to the West' http://www.telegraph.co.uk/news/worldnews/europe/france/8072104/France-and- Germany-seek-to-anchor-Russia-to-the-West.html

France and Germany launched a joint drive to 'anchor Russia to the West' at a three-way summit on Monday in northern France billed as sealing a new era of co-operation between Moscow and Europe.

By Henry Samuel in Paris Published: 10:53PM BST 18 Oct 2010

German Chancellor Merkel, France's President Sarkozy and Russia's President Medvedev wave as they leave the hotel before the tripartite summit in Deauville Photo: REUTERS President Nicolas Sarkozy of France, Chancellor Angela Merkel of Germany and Russia's President Dmitry Medvedev are meeting for two days at the Normandy seaside resort of Deauville to discuss building a pan-European security partnership.

Nato will unveil its new security concept next month at its summit in Lisbon, and the French and German leaders hope to persuade Mr Medvedev to lend his support. In particular, they hope to reach common ground over Nato's European missile defence plan, which Moscow sees as a potential threat.

While the United States and Nato say the plan is aimed against a missile threat from Iran, Moscow is seeking assurances it won't also be used to neutralise Russia's long-range nuclear arsenal.

The German and French leaders were said to have reassured Britain and the European Union – neither of whom were invited – that the summit was merely a "brainstorming session" but they will broach serious issues like security and economic partnership ahead of next month's G20 summit of leading economies in Seoul.

Russia, France and Germany all opposed the 2003 US-led invasion of Iraq, but ties since then have been strained by France's full return to Nato's military wing, Russia's war with Georgia in 2008 and its gas disputes with Ukraine.

However, French officials say tensions have eased between Russia and the West since Barack Obama, the US President sought to "reset" strained ties with his country's former Cold War foe.

Still, Mr Medvedev's last engagement before leaving Moscow for the summit was hardly conciliatory: he awarded medals to 10 Russian agents who were expelled from the United States in July for alleged spying.

Mr Sarkozy, who faces another day of massive protests and strikes on Tuesday against his pension reforms, hopes to play the statesman as he limbers up for France's presidency of the G20 and G8 next year.

October 18, 2010

At Deauville, Europe Embraces Russia http://www.nytimes.com/2010/10/19/world/europe/19iht-summit.html?src=twrhp

By KATRIN BENNHOLD

PARIS — President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany have had their differences over the years, but on one thing they appear to agree: if Europe wants to remain relevant in the world and maintain peace in its own backyard, it needs Russia.

On Monday, as the French and German leaders began two days of talks with their Russian counterpart on the Normandy coast, diplomats and foreign policy observers said conditions might now be in place for a closer, if informal strategic dialogue between Europe and Moscow.

Before heading to the resort town of Deauville, President Dmitri A. Medvedev of Russia said he wanted a “worthy global response” to his idea of a new European security architecture. French diplomats said that Washington’s separate efforts at a reset of relations with Russia had diffused some of the tensions between Russia and the West, while German diplomats pointed to a softening by some ex-Soviet satellite countries toward Moscow in recent months.

“The stars are aligned,” Mark Leonard of the European Council on Foreign Relations said. “Only three years ago, we saw almost unbridgeable gulfs between several E.U. member states and Russia. That has changed. President Obama’s reset has led to really big rethinks in Poland and the Baltic states.”

Mr. Sarkozy convened the Deauville summit talks in part to prepare for France’s leadership of the Group of 20 leading global economies starting next month. But the talks also come a month before an important meeting of NATO in Lisbon, where the alliance is to approve a new strategic doctrine. U.S. officials have expressed discontent with the idea that France and Germany are talking to Russia — without the United States present — about security in advance of the NATO talks.

Both Paris and Berlin have sought to reassure Washington in recent days by stressing that the three-way meeting had none of the anti-American undertones of the Paris-Berlin- Moscow axis that emerged in the wake of the U.S.-led invasion of Iraq in 2003.

No decisions will be made in Deauville, a French diplomat said, calling the meeting a “brainstorming session.”

Mrs. Merkel said Saturday that a goal of the summit was to improve cooperation between NATO and Russia, “for the Cold War is over for good.” She emphasized that a new “security architecture” should not hinder U.S.-European cooperation in NATO, which has invited Russia for a special meeting on the margins of the November summit meeting. Moscow has not yet responded to the invitation.

But even if no formal new structure emerges from the talks in Deauville, the meeting may lay the groundwork for an informal new forum on security issues, officials said.

Moscow is looking to create a Russia-E.U. committee on foreign policy and security, according to Russian news reports, and to build security cooperation in the “Euro- Atlantic and Eurasia region.” French diplomats have floated the idea of a new zone of economic and security cooperation comprising the E.U. and Russia, while German officials say they are open to the idea of Russian participation in the E.U.’s political and security committee, which is responsible for setting the bloc’s foreign policy.

Europe Should Be Careful of Smiling Bears 19 October 2010 By Janusz Onyszkiewicz

Remember the Partnership and Cooperation Agreement, aimed at enshrining “commonly shared values” between Russia and the European Community? Signed in 1994, during the hopeful early days of Russia’s first-ever democracy, the agreement was bolstered in 1999 by the creation of the European Union’s Common Security Defense Policy.

Both sides often refer to this desire to forge closer relations as a “strategic partnership.” But as French President Nicolas Sarkozy and German Chancellor Angela Merkel meet President Dmitry Medvedev in Deauville, France, on Tuesday, it would be wise to recognize that the Kremlin seems to be changing the terms of this nascent relationship.

In the wake of Russia’s apparent departure from democratization during Vladimir Putin’s presidency and of the wars in Chechnya and Georgia, the European Union has adopted increasingly cautious language, sounding less optimistic about the prospects of a real partnership.

Thus, the European Security Strategy, adopted in 2004, says only the following: “We should continue to work for closer relations with Russia, a major factor in our security and prosperity. Respect for common values will reinforce progress towards a strategic partnership.”

Russia’s August 2008 invasion of Georgia produced a sterner variation: “No strategic partnership is possible if the values of democracy, respect for human rights, and the rule of law are not fully shared and respected.”

Russians, meanwhile, are struggling to reconcile their disparate views on Europe. Some profess to be “sick and tired of dealing with Brussels bureaucrats.” As Konstantin Kosachev, chairman of the State Duma’s International Affairs Committee, put it, “In Germany, Italy, France, we can achieve much more.”

Kosachev and others do not believe that the EU is committed to serious talks on hard security. This is a Russian imperative — and with good reason. How to deal with Russia on security issues — particularly on energy security — is one of the most divisive issues facing the EU. Despite their commitment to speak to Russia with one voice, various EU countries negotiate with Russia bilaterally whenever possible (especially over lucrative business contracts), congregating under the EU umbrella only when necessary. That gives Russia great scope to play one country against another.

Russia, meanwhile, harbors deep disappointment with the West for its actions after communism’s collapse. During the era of Soviet leader Mikhail Gorbachev, it was assumed that the West would stick to the essence of its Cold War containment policies. Russians expected that once their country was seen to be no longer confrontational and expansionist, it would be treated as a legitimate partner, not as a defeated enemy. It would retain its status alongside the United States on the world stage, its territorial integrity would be unquestioned, and it would be left to manage its domestic affairs without outside interference or criticism.

Growing resentment toward the West has reinforced the Kremlin’s enduring penchant for the concepts of great global powers and spheres of influence, as well as the flawed belief that international relations is a zero-sum game in which others’ gain is Russia’s loss. Thus, Moscow cannot accept that more robust multilateral institutions, confidence, cooperation and interdependence could assure international security. On the contrary, Russia’s loss of superpower status is completely unacceptable.

Economic growth during the Putin years was combined with the defeat of Georgia, both of which were regarded in Russia as the beginning of a great political comeback. These two successes provided the confidence needed to try to remodel the trans-Atlantic security architecture. Medvedev’s proposed trans-Atlantic security treaty would enshrine the principle of avoiding external force to resolve national disputes, which would rule out international intervention in the conflicts affecting the North Caucasus, including Chechnya.

The status quo would be reinforced further by the principle that no country may increase its security to the detriment of another. But what remains unclear is who decides what is detrimental. Worse, the freedom to join military treaties, stipulated in the Helsinki Accords of 1975 and in other major international agreements like the Charter of Paris for a New Europe or the Charter for European Security, is ominously omitted. The expansion of military alliances, such as NATO, would be declared a threatening measure.

Europe should react to this Russian proposal. It should first acknowledge that Russia has a critical role to play in trans-Atlantic security and that it should be treated not only with caution, but also with respect. At the same time, a range of institutions already deals with the issue: the Organization for Security and Cooperation in Europe, the NATO-Russia Council and the Euro-Atlantic Partnership Council, to name only a few. These existing institutions might need to be reinvigorated and fortified, but there is no need for more of them.

Second, the principle of the indivisibility of European and U.S. security, so fundamental during the Cold War, remains valid. Security initiatives should therefore first be discussed bilaterally within the NATO-EU framework. Only then should a common position be presented at the OSCE. Speaking to Russia with one voice is absolutely essential.

Third, the idea implicit in Medvedev’s plan — that Russia should have veto power over all security-related decisions of NATO or the EU — must be rejected. Given that Russia’s own new military doctrine presents NATO as the country’s top potential danger, its leaders can logically claim that NATO enlargement undermines Russian security.

Russia should nonetheless be consulted on all major security issues. NATO-Russia consultation during the drafting of the latest NATO Strategic Concept is a good example — an approach that Russia itself rejected before adopting its new military doctrine. Consultations on Medvedev’s security plan should also include other former Soviet-bloc countries, such as Ukraine.

The best way to proceed on the Medvedev plan would be an OSCE declaration similar to the one adopted in Istanbul in 1999 — that is, a political resolution, not a legally binding treaty.

According Russia more formal recognition as a great power might help EU and U.S. efforts to engage its leaders in a serious security dialogue. But no treaty should be signed as long as the sincerity of Russia’s commitment to the norms of international behavior remains in doubt.

Janusz Onyszkiewicz, a former Polish defense minister, is chairman of the Council of Euro-Atlantic Association. © Project Syndicate

Participants in Munich Security Conf to hold visiting session in Moscow http://www.itar-tass.com/eng/level2.html?NewsID=15601135&PageNum=0

19.10.2010, 06.29

MOSCOW, October 19 (Itar-Tass) – Participants in the Munich Security Conference begin a visiting session in Moscow Tuesday.

Visiting sessions are a new format envisioning annual meetings in different countries for the purpose of developing a trans-Atlantic dialogue on security problems.

Russian Foreign Minister Sergei Lavrov, Security Council Secretary Nikolai Patrushev, Deputy Prime Minister Sergei Ivanov, notable politicians, and diplomats are expected to attend the session. “The participants will consider Russian President Dmitry Medvedev’s initiative on a new treaty on European security,” Andrei Nesterenko, the official spokesman for the Russian Foreign Ministry said.

“They are expected to give an outline to the principles of indivisible security,” he went on. “A very important factor is that the session is taking place in the run-up to the NATO summit in Lisbon where the North-Atlantic alliance hopes to endorse a new strategic concept, as well as to the summit of the Organization for Security and Cooperation in Europe /OSCE/ in Kazakhstan’s capital Astana.”

Russian General Staff chief starts visit to Serbia http://en.rian.ru/mlitary_news/20101019/161005665.html

07:48 19/10/2010

The chief of the Russian General Staff, Army Gen. Nikolai Makarov, is starting a two- day visit to Serbia on Tuesday, the Russian Defense Ministry said.

Makarov, who is also a Russian first deputy defense minister, will meet with Serbian President Boris Tadic and Defense Minister Dragan Sutanovac, and hold talks with his counterpart Lt. Gen. Miloje Miletic.

"The chief of the Russian General Staff will discuss with the leadership of the Serbian Defense Ministry the state and prospects of bilateral military cooperation, the military- political situation on the Balkans as well as urgent issues of ensuring international and European security," the Russian ministry said.

Makarov will also visit a Serbian Army brigade, inspect its infrastructure and get familiarized with its training routines and aspects of everyday life.

Polish govt. to approve Russian gas supply agreement http://en.rian.ru/business/20101019/161005320.html

06:08 19/10/2010

The Polish government will on Tuesday approve an agreement with Russia on natural gas supplies initialed in Moscow on Sunday, said Waldemar Pawlak, a deputy Polish prime minister.

Moscow and Warsaw on Sunday agreed the text of the document in the Russian capital. The deal envisions that the volumes of Russian gas supplies to Poland will be increased up to 11 billion cubic meters from the current 9 bcm annually. Russian gas will be supplied until 2022, and transited until 2019. For the document to come into force, it is to be signed by the two countries' governments and gas monopolies Gazprom and PGNiG.

An estimated 65-70 percent of all natural gas consumed in Poland comes from Russia.

WARSAW, October 19 (RIA Novosti)

Russian, Ukrainian experts to discuss nuclear cooperation http://en.rian.ru/world/20101019/161005091.html

05:08 19/10/2010

Russian and Ukrainian experts will discuss nuclear cooperation and the development of their countries' nuclear power industries at an annual conference to be held in the Moscow Region.

Representatives of Russian state nuclear corporation Rosatom, nuclear fuel company TVEL, nuclear power plant operator Rosenergoatom, Ukraine's Fuel and Energy Ministry and other organizations will deliver speeches.

Earlier Rosatom head Sergei Kiriyenko said the prospects of integrating the Russian and Ukrainian nuclear power industries are real.

Ukraine's cabinet on September 22 approved TVEL as the winner of the tender to build a nuclear fuel plant in the country. The plant is to come online in 2014.

MOSCOW, October 19 (RIA Novosti)

The Irish Times - Tuesday, October 19, 2010

19 Oct, 2010, 01.27PM IST,IANS

India, Russia to hold army exercises in Uttarakhand http://economictimes.indiatimes.com/news/politics/nation/India-Russia-to-hold-army- exercises-in-Uttarakhand/articleshow/6773849.cms

DEHRADUN: Two hundred soldiers each from the Indian and Russian armies will share warfare techniques during joint counter-terrorism exercises in Uttarakhand from Wednesday, an official here said.

Both the armies would conduct warfare exercises in the mountainous terrains of Ranikhet's Chobatiya area. These will continue till Oct 23, a mountain brigade official posted at Ranikhet said Tuesday.

"The aim is to learn and share warfare techniques while handling terrorists and insurgents. This is part of developing cooperation between the two armies," said the official.

The Indian and Russian militaries have been conducting joint INDRA exercises since 2003.

Medvedev to discuss energy co-operation in Turkmenistan http://centralasiaonline.com/cocoon/caii/xhtml/en_GB/features/caii/newsbriefs/2010/10/1 8/newsbrief-04

By Stan Rogers For CentralAsiaOnline.com 2010-10-18

ASHGABAT -- Russian President Dmitry Medvedev will discuss energy co-operation during a scheduled visit to Turkmenistan October 21-22, Turkmenistan.ru reported October 18, quoting Turkmen President Gurbanguly Berdymukhamedov's press office.

The two governments plan to sign various agreements during the summit. Uzbek President Islam Karimov, who is visiting Turkmenistan too, is expected to participate in the talks.

Medvedev to Travel to Ashgabat; Turkmen Dissidents Denied Entry to OSCE Meeting http://www.eurasianet.org/node/62179

October 18, 2010 - 2:04pm, by Catherine A. Fitzpatrick

After meeting with the leaders of France and Germany, Russian President Dmitry Medvedev is heading to Ashgabat October 22 to meet with Turkmen President Gurbanguly Berdymukhamedov. His trip will come right after a state visit from Uzbek President Islam Karimov scheduled for October 20-21, whose travel to Turkmenistan was postponed some weeks ago despite preparations for a friendship festival. According to a report from Russia's Nezavisimaya gazeta, Medvedev, Berdymukhamedov and Karimov are supposed to meet on October 23 to discuss the Turkmen leader's plan for a Central Asian and Caspian basin security summit.

Medvedev is likely going to attempt once again to try to fix the price of gas in an agreement that has lagged since the pipe explosion on a Turkmen pipeline last April , followed by mutual recriminations and ultimately a reduction in purchases from a one- time high of more than 50 billion cubic meters to only 10 bcm so far this year -- even less than Iran. A "competent" source of Nezavisimaya gazeta says no agreement will be signed, but the Russian president's visit is still about trying to preserve influence over energy policy in Turkmenistan. The agenda is still being coordinated, but the leaders are also likely to talk about the shipping routes from Turkmenbashi to Astrakhan and Mkhachkala.

But the Russian leader has more fish to fry as the three Eurasian leaders will be talking about some kind of new or different security arrangement. Turkmenistan, which prides itself on its neutrality, has been trying to get international support for its concept of a "mechanism" for pipeline security. This started out as a very general UN General Assembly (UNGA) resolution, but has evolved into a proposal for a permanent body under UN auspices that would address threats to pipelines.

Before UNGA in September, Turkmenistan organized a meeting of stakeholders, which included the major oil companies, EU and US. Most immediately the proposal seems to relate to the Turkmenistan-Afghanistan-Pakistan-India (TAPI) line, where Pakistan and India have now talked openly about the need to build the pipeline underground, and pay local "communities" (read: warlords) to keep it safe. Also in the background of these discussions is Turkmenistan's need to "diversify" its options, a reference to needing -- like the EU -- to escape from Russian dominion of its routes to foreign markets.

Now the Kremlin may be wanting in on these discussions and it will be interesting to see what results. There's a lot of brand confusion with security organizations these days in the Eurasian space -- particularly when it comes to human security. Western powers have tried to some extent to follow the original Helsinki principles of integrating state security progress with human rights compliance, but have confronted both Eurasian recalitrance and regression and the exigencies of their own geopolitical interests.

The Organization for Security and Cooperation in Europe (OSCE) is struggling on all fronts. In recent years, with Kazakhstan's help, Russia has steadily undermined the human rights and conflict monitoring aspects of the organization and complained about a lack of attention to "hard" security, its borders and internal order. Turkmenistan has defied OSCE by boycotting the human rights Review Conference, and is now grandstanding further, telling Kazakhstan, the current OSCE chair-in-office, that if it permits Turkmen dissidents to attend meetings, Ashgabat will not take part in the OSCE summit December 1-2 in Astana.

Meanwhile, despite Western diplomatic protest at the first part of the review conference in Warsaw, today the OSCE secretariat did not register Farid Tuhbatullin, the head of the Turkmen Initiative for Human Rights and another staff person, Lamija Muzurovic at this week's OSCE meeting in Vienna. The U.S. and other delegations reportedly planned to protest. Nurmuhammet Hanamov, founder of the Republican Party, an exile group, was also not admitted on the grounds that he allegedly advocated or planned violence. Both Tuhbatullin and Hanamov have been granted political asylum in Austria, and Turkmenistan's claims appear invalid. As diplomats become preoccupied with registration modalities, the larger OSCE issues loom. The elephant in the room in Vienna, not mentioned in a welter of single-issue agenda items, is the inability of OSCE to deploy its Police Advisory Group in southern Kyrgyzstan, and the delay in an international fact-finding mission endorsed by the OSCE Parliamentary Assembly -- despite not only the backing of Western capitals but Tashkent as well. The 52 unarmed advisors would not be authorized to disarm combatants, but the theory is that their presence might compel the inactive Kyrgyz police to function, instead of idly standing by while angry mobs have harmed lawyers and defendants in court trials related to the June violence.

The Collective Security Treaty Organization (CSTO) did not respond to the call of interim Kyrgyz President Roza Otunbayeva in June to help quell pogroms in southern Kyrgyzstan. The Russian-led CSTO said it was not mandated to engage in crowd control in domestic situations. At a recent CSTO summit in Yerevan in which peace-keeping was discussed, this concept seemed to be undergoing revision, but so far the CSTO's stabilizing affordances haven't been visible in Osh. To be sure, recently the CSTO moved 40 soldiers from the north to the south of Kyrgyzstan, and Russia continues to complain about narcotics flows in the region.

The Chinese-led SCO, which used to be mainly involved in providing large development loans to Central Asians is now aspiring to a greater security role as witnessed with joint military excersizes with Kazakhstan.

So many security organizations with so many acronyms -- and yet no peace for the people of Osh -- or for that matter people in other conflict zones where OSCE has still failed to score successes. There's also insecurity for some people, like the exiled activists of Turkmenistan, from their own state. A test for the sincerity of the Kazakh chair of the OSCE summit in Astana will be whether such dissidents will be given visas and allowed to participate in parallel events, and also whether the security agenda includes people as well as states.

Russia to expand number of Moldovan wine suppliers - chief doctor http://en.rian.ru/russia/20101019/161004711.html

03:34 19/10/2010

Russia will expand the number of Moldovan wine suppliers, said chief sanitary doctor Gennady Onishchenko, who heads Russian consumer rights watchdog Rospotrebnadzor.

The decision was made following a trip by Rospotrebnadzor experts to Moldova, where they had spent four days inspecting wineries. "Fourteen out of the stated 17 enterprises were checked; we will soon start the procedure of... expanding the number of wine suppliers," Onishchenko said.

Russia, previously the importer of 80 percent of all wine produced in Moldova, embargoed deliveries in March 2006. In 2007, over 40 Moldovan wine producing enterprises passed sanitation and epidemiological checks and supplies were resumed.

In April 2010, the service banned 47,000 litres of wine for safety reasons.

At the end of June, the agency declared the detection of pesticides and dibutilphthalates in Moldovan wine after Moldovan President Mihai Ghimpu declared June 28 the Day of Soviet Occupation. Onishchenko rejected any link between the department's actions and Moldovan authorities' policy.

In August, Russia said the situation with the wine supplies' quality has changed and resumed deliveries from 53 Moldovan suppliers. In September, Onischenko said Russia would widen the list of importers and open a new customs checkpoint on its border.

October 19, 2010 11:47

All militants who broke into Chechen parliament killed – Kadyrov (Part 2) http://www.interfax.com/newsinf.asp?id=196289

GROZNY. Oct 19 (Interfax) - The operation to destroy the militants who broke into the Chechen parliament building in Grozny on Tuesday morning has been completed, Chechen leader Ramzan Kadyrov told Interfax.

The operation took 15-20 minutes, Kadyrov said.

Three armed militants broke into the parliament building around 8:45 a.m. on Tuesday, killing two security guards and a parliament employee, he said.

The special operation was conducted by 12 special-task police officers," Kadyrov said.

"All parliamentarians are alive and safe," Kadyrov said. av ap Gunmen, suicide bomber attack Chechen parliament and ministry building http://www.msnbc.msn.com/id/39734140/ns/world_news-europe/

At least six dead, including four attackers, after clash with security forces msnbc.com staff and news service reports updated 1 minute ago

GROZNY, Russia — An insurgent attack on the parliament complex in the volatile Chechnya region left four assailants and at least two others dead, a Russian police spokesman said Tuesday.

Ramzan Bekkhoyev said there were at least four militants, one of whom blew himself up, killing two security guards at the complex in Grozny, the provincial capital.

Russian news agencies earlier reported the deaths of police, saying insurgents set off an explosive device at the entrance of parliament, while two others ran into the building, sparking a shootout with law enforcement.

Security forces killed the attackers, ending the assault, Kremlin-backed Chechen leader Ramzan Kadyrov and law enforcement agencies said.

The attack got underway after insurgents drove into the complex along with cars carrying lawmakers, RIA Novosti reported, citing a police source.

Earlier reports said the attackers had taken hostages, but officials later dismissed that information.Russian media also reported earlier that a separate group of attackers stormed the Ministry of Agriculture building.

Shooting erupted near the office of the parliament's speaker, Interfax reported, citing a security source. The speaker, Dukvakha Adburakhmanov, was unharmed, the news agency said, citing one of its sources.

Russian Interior Minister Rashid Nurgaliyev is in the Chechen capital holding talks with Kadyrov about violence in the region. The deputy head of the Interior Ministry told RIA Novosti that two police officers were among the dead in the Tuesday attack.

Struggles with Islamist insurgency The Kremlin is struggling to contain a growing Islamist insurgency in the North Caucasus, a strip of impoverished, mainly Muslim provinces along predominantly Orthodox Christian Russia's southern border.

Russia fought two wars with Chechen separatists in the 1990s before installing a loyal government there in 2000. Since then, most of the Islamist insurgents have moved over into the neighboring Russian republics of Dagestan and Ingushetia, with terrorist attacks seldom striking at the heart of Grozny in recent years. The Kremlin had declared victory in its battle with Chechen separatists, but analysts say a wave of shootings and bombings over recent months shows Moscow has failed to tame the growing insurgency.

Local leaders say it is fuelled by desperate poverty, clan rivalries, rampant corruption, Islamism and heavy-handed tactics by law enforcement agencies.

But in August a shootout between Kadyrov's security service officers and suspected insurgency left 19 people dead, including 5 civilians, in his home village of Tsentoroi, raising fears of a reviving insurgency.

This is a breaking news story. Please check back for more details.

Reuters and The Associated Press contributed to this report.

October 19, 2010 12:31

3 killed, 17 injured in Chechen parliament attack – investigators http://www.interfax.com/newsinf.asp?id=196311

MOSCOW. Oct 19 (Interfax) - Three people, including two police officers, were killed when gunmen broke into the parliament building in Grozny, capital of Russia's North Caucasus republic of Chechnya, on Tuesday, a spokesman for the Investigative Committee under the Russian Prosecutor General's Office told Interfax.

"The preliminary information available to investigators suggests that three militants entered the premises of the government complex in Grozny this morning. One of them blew himself up just outside the building of the Chechen republic's parliament," the spokesman said.

"The two others entered the building and barricaded themselves on the ground floor. They blew themselves up during the police operation. Investigators have already confirmed the death of three people, including two police officers and one civilian," he said.

A total of 17 people were injured in the attack, including six policemen and 11 civilians, the spokesman said.

Investigators are now examining the scene and the bodies of the killed gunmen.

Eyewitnesses are being questioned. tm ap Operation in Chechen parliament building over http://www.itar-tass.com/eng/level2.html?NewsID=15602116&PageNum=0

19.10.2010, 11.12

GROZNY, October 19 (Itar-Tass) -- A special operation in the central part of Grozny is over. According to preliminary reports, several people were killed and wounded, a representative of the Chechen interior ministry told Itar-Tass.

Conflicting reports are coming about the incident in the central part of the Chechen capital.

According to the information of the army, police and security services of the North Caucasian Federal District, several gunmen penetrated to the Chechen parliament building, situated in the Lenin District, at 09.00, Moscow time. “According to preliminary reports, several people were killed or wounded during the exchange of fire with the guards,” the source said.

A representative of the Chechen interior ministry specified that the gunmen had penetrated to the building on the territory of the government complex, which previously had housed the republican ministry of agriculture. Parliamentary hearings were planned to begin there at 09.00. “When a report came about the capture of the building, units of the Chechen interior ministry and of special services were moved to the area. According to preliminary information, all the gunmen who penetrated to the building were neutralized,” said a source in the Chechen police service.

The number of the dead and wounded is being specified.

A representative of the press centre of the Russian Interior Ministry told Itar-Tass that Interior Minister Rashid Nurgaliyev, who is touring the Northern Caucasus, had been informed of the incident. At present he is chairing a meeting in the premises of the Chechen interior ministry.

The central part of Grozny is blocked at the moment. Special task units and men of all the special services are staying there.

The gunmen, who broke into the government building, were destroyed. Four policemen were wounded, the Chechen interior ministry reports.

All terrorists in Chechen parliament attack ‘eliminated’ (Update 3) http://en.rian.ru/russia/20101019/161007470.html 11:19 19/10/2010

Police in Russia’s Chechnya have killed all the terrorists who attacked the republic’s parliament on Tuesday morning, an Interior Ministry official said

The deputy head of the republic’s Interior Ministry, Roman Edilov, said four militants and two police officers had died during the operation.

He also dismissed reports that the militants had taken hostages.

The attack began when a vehicle carrying terrorists drove in with cars carrying lawmakers, a police source told RIA Novosti earlier.

He added that a suicide bomber had blown himself up while the other militants headed toward parliament.

Parliament was evacuated and a special operation, headed by Chechen leader Ramzan Kadyrov, was launched to flush out the militants.

This is the second serious terrorist incident in Chechnya in recent months. In August, a suicide squad launched a massive attack on Kadyrov’s home village of Tsentroi.

Chechnya, which saw two brutal separatist wars in the 1990s and early 2000s, has seen relative calm in recent years under Kadyrov, a former militant turned Kremlin ally whom critics have accused of human rights abuses.

GROZNY, October 19 (RIA Novosti)

All militants in Chechen parliament raid killed http://www.google.com/hostednews/afp/article/ALeqM5gOZ1Zt1283jidLYOa_q8r5WEI NLA?docId=CNG.cc2bf94312973ececbcf6ea7a6025126.901

(AFP) – 1 hour ago

MOSCOW — All the militants who stormed the parliament building in Chechnya Tuesday have been killed, an official said.

"All the militants who attacked the Chechen parliament have been killed by government forces," a spokesman for the Chechen parliament Zelim Yakhikhanov told AFP.

"The operation is over and all the terrorists were liquidated, according to the Chechen interior ministry," he said, adding he personally saw four or five attackers. All the deputies who were in the parliament when it was attacked are alive and have been taken to safety, Chechnya's leader Ramzan Kadyrov told Interfax.

Three security guards and one civilian were killed in the raid, a spokesman for the interior ministry told AFP.

Russian news agency reports said that two militants blew themselves up in suicide attacks and another was killed in an exchange of fire.

At least 3 killed, 13 injured in Chechen parliament attack http://english.peopledaily.com.cn/90001/90777/90853/7170644.html

15:56, October 19, 2010

At least three people have died and another 13 injured and hospitalized in the terrorist attack on the regional parliament of Russia's North Caucasus republic of Chechnya, the RIA Novosti news agency reported Tuesday.

According to the newest source, surviving Chechen gunmen who broke into the parliament building located in Leninsky street of the regional capital of Grozny may be holding hostages, Interfax quoted a security source in Moscow.

"The operation is in its final stage," the source said, adding that two of the four militants who broke into the building blew themselves up and one was killed.

"Another attacker barricaded himself inside a room and an operation to destroy him is underway," the source said.

The Interfex also quoted the Chechen leader Ramzan Kadyrov as saying that two policemen and one employee was killed in the attack, all Chechen parliamentary deputies were unhurt. He also said the operation is over with all gunmen killed.

Spokesman of Russian Investigative Committee Vladimir Markin said that an investigative group was set up in Grozny to probe the attack.

Russian Prime Minister Vladimir Putin has conferred the incident with Chechen leader Ramzan Kadyrov, and relevant compensation to victims and their families.

Source:Xinhua

19 October 2010 Last updated at 07:41 GMT Gunmen attack Chechen parliament in Grozny http://www.bbc.co.uk/news/world-europe-11571673

The parliament in the restive Russian republic of Chechnya has come under attack with at least six dead.

The parliament in the capital, Grozny, was attacked by gunmen, leaving at least three personnel dead.

Reports suggest three attackers were killed, with two reportedly blowing themselves up.

Interfax quotes President Ramzan Kadyrov as saying the operation against the militants is over and all militants involved there have been killed.

He said deputies inside the building at the time were alive and had been taken to safety.

Other Russian news agencies say at least 10 people were injured in the violence.

Renewed violence

According to some sources the shooting broke out around the office of the parliamentary speaker, though he was reportedly unharmed.

Russia's Interior Minister Rashid Nurgaliyev is visiting Chechnya and is thought to be in an emergency meeting with Mr Kadyrov, who is strongly backed by the Kremlin.

Moscow is struggling to contain a growing Islamist insurgency in the North Caucasus, a strip of poor, ethnically mixed provinces along Russia's southern border.

The Kremlin had declared victory in its battle with Chechen separatists, but analysts say continuing shootings and bombings over recent months show Moscow has failed to stamp out the insurgency.

Gunmen Attack Parliament in Chechnya http://www.nytimes.com/2010/10/20/world/europe/20chechen.html?src=twrhp

By MICHAEL SCHWIRTZ

Published: October 19, 2010

MOSCOW—Gunmen burst into the Parliament of Chechnya in southern Russia on Tuesday morning, killing several people in a shootout, according to Russian news reports. Unnamed law enforcement sources speaking to Russian news media said that three or four men entered the building in Grozny and opened fire close to the office of the Parliament’s speaker, Dujuvakha Adurakhmanov. Reports said that Mr. Adurakhmanov was still alive, but that at least four people had been killed.

The gunmen have reportedly begun taking hostages. There were also reports that the Agriculture Ministry was under attack.

Russian forces fought two wars in Chechnya against a fierce separatist movement that has evolved over the last decade into an Islamist insurgency responsible for almost daily attacks against law enforcement and government officials in the region.

Though violence is common in Chechnya and throughout the southern Russian territory known as the North Caucasus, Tuesday’s attack against the Parliament building was particularly brazen.

The attack echoes another raid by militants in August on Tsenteroi, the home village of Chechnya’s president, Ramzan A. Kadyrov, and could be an indication that insurgents are stepping up their campaign to target the region’s top leaders.

10/19/2010 09:16 RUSSIA - CHECHNYA Chechen rebels attack Parliament and the Ministry of Agriculture in Grozny http://www.asianews.it/news-en/Chechen-rebels-attack-Parliament-and-the-Ministry-of- Agriculture-in-Grozny-19756.html

All fighters and an unknown number of other people have been killed in the operation. The President of the Parliament was able to escape. The attack came as the Russian Interior Minister visits the Chechen capital.

Moscow (AsiaNews / Agencies) This morning Chechen rebels launched an attack on Parliament buildings and the Ministry of Agriculture in Grozny, which has resulted in the death of all members of the commando. “The operation is over, all rebels have been killed” reported Interfax quoting a security forces source in Chechnya. According to the same Russian agency a meeting between the Russian Interior Minister who is in Grozny and the Chechen president Ramzan Kadyrov is underway.

The reconstruction of events is not yet clear. It appears that a suicide bomber blew himself up outside the Parliament, while two accomplices fired on soldiers guarding the building. The Chechen rebels then entered the parliament building in Grozny taking several people hostage. This was confirmed by an anonymous source in the regional Interior Ministry, adding that three guards were killed in the attack. The situation remains confused, even with regard to the dynamics of the attack. According to the agency RIA Novosti two people died in the first suicide attack. According to other sources, there were no explosions, three or four armed men instead stormed the building shooting. The President of Parliament, Dukuvakha Abdurakhmanov, remained inside the building and was unarmed. According to the latest news he managed to leave the building and was not hurt.

The shooting continued for about an hour inside the building. "Regular police forces, officers in riot gear and a unit of the Parliament Security Service intervened," said a security source. The Ministry of Agriculture is under attack, according to Russian news agency Itar-Tass, quoting a source in the same department.

An attempt was underway in Chechnya sought by President Ramzan Kadyrov – a close Kremlin ally - to impose “Chechen traditional Islam" on his country to reduce the strength of fundamentalist Islam.

Shootout erupts in Chechen Republic http://rt.com/Top_News/2010-10-19/chechnya-shootout-erupts-parliament.html/print

19 October, 2010, 09:19

A suicide bomber has attacked the parliament of Russia's republic of Chechnya. Reports indicate up to four people may have been killed in the assault.

There is also information the gunmen have taken hostages. However reports coming from Grozny are contradictory. ITAR-TASS news agency quotes a police source as saying the skirmish is now over.

RIA Novosti news agency is citing an anonymous source in the country's law enforcement body as saying: "On Tuesday morning, when cars with deputies were entering the territory of the parliament, they were followed by a car carrying terrorists. One of them detonated the explosive device he was carrying, the other two managed to get to the parliament. A shoot-out has erupted."

Interfax new agency, however, says there have two suicide blasts and that up to four gunman managed to break into the building and open fire.

There are also reports the head of the parliament was in the building and that the gunfight took place near his office. According to Interfax, he was evacuated.

The leader of the republic Ramzan Kadyrov is said to be personally in charge of the operation to neutralize the militants. Russian Internal Affairs Minister, who is in the Chechen capital, has been informed of the situation. The has been no official confirmation of this information yet.

The incident occurred as the Chechen parliament prepares to celebrate its fifth anniversary.

The Chechen Republic has been relatively safe from terrorist attacks in cities, with militants mostly hiding in rural areas and targeting villages from time to time. One of the largest-scale of such incidents this year was the attack on Ramzan Kadyrov’s hometown Tsentroy in August.

Some 20 to 30 militants armed with assault rifles, grenade launchers and explosives stormed the settlement. The attack and the subsequent police operation resulted in six policemen being killed and 18 wounded. Seven local residents were hurt too. 12 attackers were killed by police, with the remainder retreating into the mountains.

The most recent bombing attack in the Chechen capital Grozny was in late June, when a suicide bomber set off an explosion near a police car. Several people were wounded by the shrapnel, but the terrorist himself was the only fatality.

The last hostage situation Chechnya was in late August, when a militant lost his nerve during an identity check. He managed to barricade himself in a nearby house, taking three people hostage. Police lost one officer during the rescue operation, but no civilians were hurt.

Reports: Gunmen storm Chechen government buildings http://www.washingtonpost.com/wp- dyn/content/article/2010/10/19/AR2010101900256.html

The Associated Press Tuesday, October 19, 2010; 2:23 AM

MOSCOW -- Russian news agencies report that insurgents have stormed the parliament and agriculture ministry in Russia's volatile Chechnya region and that people have died.

Interfax is reporting deaths in the parliament complex in the center of the Chechen capital as special forces converge on the scene.

Interfax says shooting erupted in the office of the speaker of the Chechen parliament, but he was evacuated safely, citing a law enforcement source.

Itar-Tass reports that in a separate attack, several gunmen stormed the region's ministry of agriculture, citing a ministry source. 2 Jailed in Ruslan Yamadayev's Killing http://www.themoscowtimes.com/news/article/2-jailed-in-ruslan-yamadayevs- killing/420522.html

19 October 2010 By Natalya Krainova

A Chechen convicted of slaying Ruslan Yamadayev, a former State Duma deputy and powerful rival of Chechen President Ramzan Kadyrov, on a Moscow street in 2008 was jailed for 20 years Monday, while the Chechen who drove the getaway car got 15 years.

The Moscow City Court handed down the lengthy sentences to the gunman, Aslanbek Dadayev, 33, and the driver, Elimpasha Khatsuyev, 39, after a 15-week trial, a lawyer for a third defendant on trial, Musa Khadisov, told The Moscow Times.

The court did not establish who organized the attack, which Yamadayev's brother Isa long blamed on Kadyrov. Isa, however, unexpectedly made peace with Kadyrov in August.

Isa, who attended Monday's sentencing with several bodyguards, told reporters outside the court that he had hoped for "a more severe verdict of life in prison, given that the convicts were also involved in attacks on servicemen in Chechnya," Interfax reported.

The court did not convict the defendants of killing servicemen, Khadisov said.

Khadisov's client, Chechen native Timur Isayev, 31, was sentenced to 14 years in prison for teaming up with Dadayev to make an attempt on the life of banker Alexander Antonov and his guard Alexander Komarov, who were injured in a shootout in Moscow on March 11, 2009.

The court also ordered Dadayev to pay 4 million rubles ($131,000) and Khatsuyev to pay 1 million rubles ($33,000) in damages to Isa, Khadisov said.

Isayev was fined 4,000 rubles ($130), he said.

The three defendants were also convicted of illegal weapons possession.

The defendants had pleaded not guilty to all the charges, except Khatsuyev who admitted to illegal weapons possession.

The defense lawyers vowed to appeal.

"The court did not listen to our arguments," Khadisov said.

Khatsuyev's lawyer Zaur Samkhanov told Gazeta.ru that "the judge didn't even mention the defense's arguments in the verdict." Prosecutor Amalia Ustayeva told reporters that she was satisfied with the sentences, RIA- Novosti reported.

The court found that Khatsuyev drove the BMW that pulled up to the Mercedes driven by Yamadayev during Moscow rush-hour traffic on Smolenskaya Naberezhnaya on Sept. 24, 2008. Dadayev fired 16 bullets from within the BMW, killing Yamadayev and injuring former Chechen military commander Sergei Kizyun, who was sitting next to Yamadayev.

Isa's former bodyguard Khavazhi Yusupov has told investigators that Kadyrov personally ordered the killings of Ruslan and another brother, Sulim Yamadayev, and offered $1 million to kill Isa. Sulim was gunned down in Dubai in March 2009.

Yusupov was sentenced to 8 1/2 years in prison on attempted murder charges in June. An Iranian and a Tajik were convicted in Sulim's killing and sentenced to 25 years in a Dubai prison in April.

Isa's lawyer, Yury Yefimenkov, did not take repeated calls on his cell phone for comment Monday.

FACTBOX - Facts about Russia's Chechnya republic http://in.reuters.com/article/idINIndia-52285620101019

12:41pm IST

REUTERS - Here are some facts about Russia's mostly Muslim Chechnya republic on the country's restive southern fringe, where violence has escalated over recent months, leading the Kremlin to name the North Caucasus its biggest domestic political problem.

* A mountainous region in the Caucasus range, Chechnya is inhabited by a mainly Muslim people with a fearsome reputation dating from the late 18th century when warlord Sheikh Mansour led a jihad (holy war) against Russian rule. It has been a thorn on Russia's southern fringe ever since.

* Under Soviet rule, Chechnya was lumped with ethnically close Ingushetia, with Grozny the combined region's capital. When the Soviet Union collapsed in 1991, Ingushetia chose to become a republic within Russia while Chechnya declared independence.

* Soviet dictator Josef Stalin, fearing Chechens would be disloyal, deported the entire nation in 1944 to Central Asia, where many died. Soviet leader Nikita Khrushchev let them return in 1957.

* After former Chechen leader Dzhokhar Dudayev declared independence at the end of Soviet rule, Russian President Boris Yeltsin sent in troops in December 1994 and Russia became mired in a bloody separatist war. Mass rebel hostage-takings led to a truce being signed and Moscow withdrew its forces in 1996.

* During three years of de facto independence, the region was gripped by murders and kidnapping.

* In 1999, after Chechen hardliners invaded the adjacent region of Dagestan and Vladimir Putin, then prime minister, blamed rebels for bombings in Russian cities, including Moscow, Russian troops were sent back to Chechnya and separatist leaders fled.

Officially called a counter-terrorist operation, a second war began in Chechnya. Russia kept security restrictions and troops until April 2009.

* Chechen rebels seized a theatre in Moscow in 2002, holding 850 people hostage and demanding an end to the war. Around 120 hostages died. In September 2004, gunmen demanding Chechen independence seized a school in the town of Beslan in North Ossetia, near Chechnya, resulting in the death of 330 people, more than half of them children.

* Putin, as president, started installing local proxies to run an administration loyal to Moscow. His first local Chechen boss, Akhmat Kadyrov, was assassinated in a bomb blast in May 2004. His son, Ramzan, is currently the president.

Rights groups accuse Kadyrov, an ex-rebel turned Kremlin loyalist, of abductions and torture in present-day Chechnya, which he dismisses as attempts to discredit him.

* Chechen rebel Doku Umarov is Russia's most wanted guerrilla leader. His group claimed responsibility for an Aug. 17 dam disaster in Siberia that killed 75 and for bombing a Russian express train between Moscow and St Petersburg in November that killed 26 people.

* Two female suicide bombers killed 39 at two crowded Moscow metro stations in March earlier this year. Chechen rebel leader Umarov claimed responsibility for the attacks, which were the worst the capital had seen in six years.

* Increasing violence in the region and fears that militants will take their insurgency to Russia's economic heartland from the mountains of the northern Caucasus have drawn promises from the Kremlin to crush the militants.

* Kadyrov has amassed a large personal militia, which number in the thousands and are called "Kadyrovtsy". Rights groups and locals say they use heavy-handedness to carry out Kadyrov's personal decrees and permeate the society with fear. Soyuz-2 carrier rocket for first time to orbit US Globalstar sats http://www.itar-tass.com/eng/level2.html?NewsID=15601446

19.10.2010, 10.02

MOSCOW, October 19 (Itar-Tass) - The Soyuz-2 carrier rocket of the 1a modernisation stage with six American satellites Globalstar-2 will be launched from the Baikonur cosmodrome on Tuesday. The Russian Federal Space Agency (Roskosmos) told Itar-Tass that the “launch of the carrier rocket with the Fregat upper stage is scheduled for 21:11, Moscow time.”

“During the launch of the American satellites the area of the fall of the spent first stage of Soyuz-2 will be in the Karaganda region (Kazakhstan), nose cone – in the East Kazakhstan region (Kazakhstan) or in the Altai Territory (Russia), the second stage – in the East Kazakhstan region (Kazakhstan) or in the Altai Territory (Russia), the third stage – in the Pacific Ocean,” Roskosmos noted.

The carrier rocket's combustion duration will be 528 seconds. Then by means of two ignitions of the Fregate engine the satellites will be taken to the target orbit. The total duration of orbiting from the moment of the rocket launch to the separation of the spacecraft from the upper stage will be 1 hour and 40 minutes. After the separation of the satellites the Fregat upper stage by means of the third ignition of the engine will be transferred to the disposal orbit. At about 01:25, Moscow time on Wednesday it will cease to exist in the Earth atmosphere west of New Zealand.

Border crossed once every four seconds http://www.barentsobserver.com/border-crossed-once-every-four-seconds.4831935- 116321.html

2010-10-19 About 8 million people will have crossed the Finnish-Russian border during 2010, which means an average of one person every four second.

Border traffic between Russia and Finland is boosting to an all-time high peak this year. If the traffic continues for the last few months, 2010 is seeing an increase of about ten percent, reports Helsingin Sanomat.

The increase is mainly due to the easing of Russia’s customs regulations. Until earlier this year Russians have been allowed to bring no more than 35 kilograms of goods worth up to €1,500 once a month from trips abroad for personal use. The new rules say now that the total weight can be 50 kilograms and the person can travel as often he wants.

The increase in border crossings is especially seen at the Nuijamaa crossing near Lappeenranta as well as the Imatra crossing, also on the road from St. Petersburg to Helsinki, according to Helsingin Sanomat. Two thirds of the people crossing the border are Russian citizens. Many border crossers go to South Karelia for shopping and weekend tourist trips. Tax-free sales in shops in Lappenranta and Imatra to non-EU visitors have grown by one quarter this year, reports Helsingin Sanomat. Russians go for shopping in Finland attracted by better quality of goods, as well as lower prices on the Finnish side.

The border crossings have also boosted at the Norwegian-Russian border in the north as previously reported by BarentsObserver. Especially on Saturdays are many people from the Kola Peninsula driving over to the Norwegian border town of Kirkenes for shopping.

The number of Russians crossing the border to Norway is up 35 percent in August compared to the same period last year.

Medvedev nominates governors of Ivanovo region, Perm territory http://www.itar-tass.com/eng/level2.html?NewsID=15601760

19.10.2010, 11.03

MOSCOW, October 19 (Itar-Tass) - Russian President Dmitry Medvedev has nominated incumbent governor of the Ivanovo region, Mikhail Men, for a new term of office, the Kremlin press service said on Tuesday.

Mikhail Men has been the region’s governor since 2005.

The president also nominated incumbent governor of the Perm Territory for a second term of office.

Chirkunov has been heading the region since December 1, 2005.

19.10.2010

New Moscow mayor is a friend of Putin, not of free press http://www.dw-world.de/dw/article/0,,6124628,00.html

Sergei Sobyanin is the Kremlin's man of choice to become the new mayor of Moscow. He is scheduled to be voted in this week and likely to back the regime with little regard for dissenting voices.

"There is opposition, look! Only 24 out of 25 deputies have voted for me," Sergei Sobyanin said just after deputies of the local parliament in Siberia had endorsed his appointment as governor of the oil province Tyumen in 2000. This week he faces a similar vote, this time about his candidacy for the post of Moscow mayor. Deputies of the Moscow City Council, mostly belonging to the ruling United Russia party, are expected to give their full support to Sobyanin. Indeed, the vote is generally seen as nothing more than a formality. The deputies had their first informal meetings with Sobyanin on Monday, and according to some media reports, they were "elated."

Tackling corruption and traffic jams

President Dmitry Medvedev presented Sobyanin on Friday as the man he would like to see as the future mayor of the Russian capital. First and foremost, he said, Sobyanin will have to tackle widespread corruption, as well as the endless traffic jams marring the city.

According to Medvedev, "little had been done" in recent years to combat corruption, a clear reference to the previous mayor. Yuri Luzhkov was ousted last month - after 18 years - because the president "lost confidence" in him. The dismissal followed a smear campaign against Luzhkov on several TV channels, accusing him and his wife of widespread fraud and corruption.

Sobyanin's appointment is expected to have great political significance, with parliamentary and presidential elections scheduled for 2011 and 2012. The Moscow vote, as always, will be of critical importance.

The peak of a steady career

Sergei Sobyanin is a little known figure in Russia. He rarely gives interviews, although he has been one of Russia's most influential politicians for years. Since Medvedev came to power in 2008, he has served as deputy prime minister and chief of staff for Prime Minister Vladimir Putin. He headed Medvedev's election staff in 2008.

Before moving to Moscow, Sobyanin was governor of Tymen, an area twice the size of France, with a population of just 3.5 million. The province is home to Russia's biggest oil and gas deposits, which are concentrated in two autonomous regions in the north. Sobyanin was born in one of the two, Khanty-Mansiysk, in 1958. He started his working life as a plumber, then studied to be a lawyer and an engineer.

During the 1980s he was active in the Communist youth movement Komsomol. In the early 1990s he became mayor of the oil town of Kogalym, later chairman of the legislature of the Khanty-Mansiysk region. After that, with full support from the Kremlin, he was elected governor of Tyumen.

No tolerance for opposition

Under Sobyanin's rule, the province saw a construction boom, a legacy, which many saw as positive. But he also turned out to be a rather rigid governor, who did not tolerate any resistance and took harsh measures against what was left of a free press. "A journalist cannot be independent," he once said.

Sobyanin also expressed sympathy for Soviet dictator Joseph Stalin, praising the "development" of the country under his rule.

Sobyanin has always been eager to express his loyalty to Vladimir Putin. He supported Putin's candidacy for the presidency in 2000 and was the first governor to become a member of the Kremlin party United Russia. In 2005 Putin brought him to Moscow to become his chief of staff - as the successor to Dmitry Medvedev, who had at the time become a deputy prime minister.

"They say that Russia's wealth grows from Siberia," Putin said at the time. "Well, Siberians know best how to do this."

Author: Geert Groot Koerkamp, Moscow Editor: Nancy Isenson

October 18, 2010 The New Sheriff in Town http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1287425267

By Tom Balmforth Russia Profile

Strategy 31 Activists Say Sobyanin’s Appointment Could Make It Easier to Demonstrate in Moscow, but It Also Means City Hall Is Now Under Federal Control

President Dmitry Medvedev’s appointment of Sergei Sobyanin as mayor of Moscow on Friday is one of the final plays in the ouster of Yuri Luzhkov, orchestrated by a Kremlin seeking to get its man into City Hall ahead of two key elections starting late next year. All has gone according to plan, say analysts, although the Moscow City Duma still needs to give its blessing to Premier Vladimir Putin’s former chief of staff Sobyanin. Meanwhile, the City Hall reshuffle has invited speculation that demonstrations in the Russian capital will be handled more calmly and could even be given the official go-ahead. Still, activists aren’t enthused with his appointment.

Medvedev invited Sergei Sobyanin to his Gorky residence hours after nominating the former deputy prime minister as his preferred successor to Luzhkov, calling Sobyanin an “experienced manager who possesses the necessary qualities for being mayor of Moscow.” Luzhkov’s likely successor, a Moscow outsider from Siberia’s Khanty- Mansiisk autonomous district, still needs the Moscow City Duma to rubberstamp his appointment. This is expected to take place at an extraordinary session on October 21, but Sobyanin appeared confident on Friday that this was just a formality, and has already announced his mayoral objectives. “The questions of socially protecting the population, resolving the transport problem, integrating [the city] into federal programs, working jointly with the federal branches of power, and the fight against corruption – these should all of course become priorities for the activities of the Moscow government,” Sobyanin told the Russian president, who fired Luzhkov on September 28 for having “lost confidence” in him.

Sobyanin’s appointment finally puts to bed rumors that Acting Moscow Mayor Vladimir Resin could take the reins as a two-year stopgap. “Sobyanin on the one hand is a man who has experience of city managing, and on the other hand is very close to the Kremlin – his choice is logical,” said Sergei Mikheev, the vice president of the Center for Political Technologies.

As Putin’s chief of staff, Sobyanin, who has gubernatorial experience from his stint as governor of the Tyumen Region between 2001 and 2004, has become close to the Kremlin and a personal friend of Putin during almost six years as the premier’s chief of staff.

Ever since Putin abolished direct elections for regional heads in 2004 and the campaign to jettison entrenched Boris Yeltsin-era governors picked up speed two years ago, there was already speculation that Sobyanin was being primed to replace Luzhkov. “I heard rumors that Sobyanin was one of the Kremlin candidates to take the mayor’s post about two years ago, so I can’t say this appointment comes as much of a surprise,” said Mikheev.

Speaking to The New Times weekly magazine a week after his ouster, Yuri Luzhkov said that the Kremlin sought his removal in favor of a more reliable ally in the post of Moscow mayor, a position which oversees a sizeable portion of the Russian electorate, ahead of a series of key elections. “We can say that the operation to replace Luzhkov was launched with one person in mind – that person was Sergei Sobyanin,” said Alexei Mukhin, director of the Moscow-based Center for Political Information. “The people who were on the same shortlist with him – they were just statistics. This is clear.” The four- strong list of potential candidates to replace Luzhkov compiled by the United Russia ruling party included Transport Minister Igor Levitin, Nizhny Novgorod Mayor Valery Shantsev and Deputy Moscow Mayor Lyudmila Shevtsova.

The appointment of a slick manager who mediated with the regions and regional oil companies – Sobyanin served as chairman to TNK in Tyumen in the early 2000s – has provoked some analysts to speculate that this could deal a blow to Putin and the federal government. Mikheev played this version down. “If it was a loss, then Putin wouldn’t have agreed to this loss,” he said. Mukhin agreed. “Despite his fairly extensive experience of working at the federal level, Sergei Sobyanin beforehand was obviously an outstanding regional leader. So at this post of Moscow mayor he is going to be extremely useful for Vladimir Putin for the elections in 2011 and the presidential elections in 2012.”

As for the latest debate on who will step into Sobyanin’s shoes, Mukhin suggested that one of Sobyanin’s deputies would likely be appointed, and touted Deputy Head of the Government’s Central Office Kirill Androsov as a possibility.

Meanwhile, Sobyanin’s appointment has invited speculation that more leeway will be given to public protests in Moscow, such as the Strategy 31 anti-governmental demonstrations that were invariably dispersed violently by Moscow police under the iron-fisted management of Luzhkov. “If out of the millions of people in Moscow, 200 people want to gather on the 31st without fail on the Triumfalnaya Square, then let them,” said Vladislav Surkov, often touted as the political architect of today’s regime, in an interview with the Vzglyad Web site yesterday. The deputy chief of staff in the Kremlin administration added that demonstrations would still be broken up if they “disturb peace,” Echo of Moscow reported ahead of the Strategy 31 protest to take place in under two weeks.

Activists are expecting “mild liberalization” from Sobyanin, but have no illusions where his interests lie. “I don’t think Sobyanin is going to disperse the upcoming protest necessarily – we’ve already had information that apparently they intend to allow the protest on Triumfalnaya Square,” said Andrei Dukhonin, a regular Strategy 31 protestor with the Solidarity movement who doesn’t support Sobyanin. “I personally think this mayor’s appointment is a mistake. He is not up to the task of solving the city’s many problems. And I am entirely certain that it will now be the federal authorities who control the city. I know what Sobyanin represents – he’s part of the system and he’s one of Putin’s men,” he said. “But I still think there will be a mild liberalization. Having said that, if they think they’ve made a mistake with the protest, then of course they’ll clamp down again.”

I – complementing The Independent http://english.ruvr.ru/2010/10/19/26915593.html

Russian media tycoon Alexander Lebedev, owner of the London-based Independent Print publishing house will launch his new periodical “I” on October 26th.

Lebedev publishes The Independent and The Evening Standard in London and Novaya Gazeta in Russia.

The new paper targets those “interested in a quality daily issue for as little as 20p…thus serving a good supplement to the already much improved The Independent”, says the publishing house report. The Independent’s editor in chief Simon Kelner will head the new paper. He says “I” will become the first post-modern newspaper to satisfy the general demand for common sense combined with a modern viewpoint on things.

Critical Russian Newsweek magazine folds http://news.smh.com.au/breaking-news-world/critical-russian-newsweek-magazine-folds- 20101019-16r17.html

October 19, 2010 - 12:34AM

The Russian edition of Newsweek, often openly critical of the Kremlin, has hit the stands for the last time for economic reasons, the magazine's German publisher says.

"We are proud that Russian Newsweek has been prominent, award-winning and met the highest standards of journalistic work for six years," Axel Springer Verlag said in a statement on Monday.

"Unfortunately, we failed to put the magazine on a firm commercial footing that would give it a future," it said.

Axel Springer Verlag, active in 35 countries with more than 170 newspaper and magazines titles, including Germany's biggest daily, Bild, has been under licence since 2004 from Newsweek Inc to publish the Russian version.

The magazine won respect for its high-ranking sources and ability to probe social and political stories with a frankness few other Russian publications dared to match in an industry dominated by pro-government media.

The editor, Mikhail Fishman, confirmed in an interview on Monday the magazine closed for financial reasons.

"The reasons are purely economic. The magazine did not generate profit," Fishman told the Echo of Moscow radio station.

The magazine boldly ignored unspoken taboos in Russia.

In a provocative advertising campaign last year, a hand holding puppet strings appeared next to the slogan: "Trust in the courts is growing in Russia."

Another showed hands forming the shape of a jail window. "Our business is going over to a one-stop system," it said. "Everyone knows, we understand," the ad concluded in a campaign that several billboard companies and the Moscow metro refused to run.

The magazine reported on rehearsals for "live" phone-ins to Russian Prime Minister Vladimir Putin and leaked confidential government documents.

It boasted that it had "no censorship" or "banned topics or untouchable figures".

The magazine's previous editor, Leonid Parfyonov, was one of Russia's most well-known journalists, famously sacked from NTV television channel after he refused to accept censorship of his current affairs show.

In March, current editor Fishman was targeted in a video, published on the website of a pro-Kremlin youth organisation, which apparently showed him snorting cocaine with a scantily clad young woman.

In a smear campaign, a second video apparently showed him handing a bribe to a traffic policeman.

The disappearance of Russian Newsweek further reduces an already thin field of opposition print media, with the weekly New Times, daily economic newspaper Vedomosti and tri-weekly Novaya Gazeta among the most prominent remaining.

Novaya Gazeta Fears Shutdown in 2011 http://www.theotherrussia.org/2010/10/18/novaya-gazeta-fears-shutdown-in-2011/

October 18th, 2010

Editors at Novaya Gazeta, one of Russia’s most well-renowned opposition newspapers, fear that the publication may be shut down in the coming year.

Following months of legal battles, a Russian court declared in September that a decision by Roskomnadzor (Russia’s federal media supervision agency) to issue an official warning against the newspaper for “propagandizing nationalistic views” was valid. Since a publication can be shut down after two such warnings, Novaya Gazeta editors say that the court’s decision spells the beginning of the possible end of the newspaper.

In a post on Novaya Gazeta’s blog on Sunday evening, Deputy Chief Editor Sergei Sokolov explained the court case:

It’s entirely possible that next year Novaya Gazeta won’t be found in either kiosks or your mailbox. We may be shut down… What alarmed the federal officials? The article “Gang, agency, party. Who are the ‘legal nationalists’” – which is research dedicated to ultra-right organizations that openly preach nationalistic views. We quoted propagandistic texts from the web site of Russian Mind, we took photographs from a Nazi website in which people calling themselves legal politicians were covered in symbols that look fascist to the point of confusion. (Notarized copies of these materials were presented to the court.)

Why did we do this? Because Novaya Gazeta has taken a principally antifascist position for the course of many years: it demands that the authorities investigate the activities of nationalist-extremists, it explains to people what the activists from numerous “patriotic” movements that gallivant around the center of Moscow in Russian Marches actually are, it reports statistics on the victims of nationalists. (Several kilograms of these texts were presented to the court.)

In January 2009, fascists murdered our journalist Anastasia Baburova and a friend of our editorial office, lawyer Stanislav Markelov – they were shot in the back of the head in the center of Moscow. It was a public punishment for antifascists. (The court was aware of these circumstances.)

We carried out our own investigation and explained: the people now charged with murder associated with members of Russian Mind and had a certain attitude towards it. Meanwhile, Russian Mind advertises itself as a non-extremist and non-fascist organization. In order for readers and law enforcement agencies to get the proper impression of these citizens, we quoted THEIR program documents and showed THEIR photographs with Nazi symbols. (The court was aware of this.)

We expected that after this publication, Roskomnadzor would deal with the fact that the website of Russian Mind exists, and that prosecutors would begin looking into further criminal charges.

Roskomnadzor did deal with it – only not with the ultra-right, but with Novaya Gazeta.

The offending article can be read in Russian by clicking here.

Translation by theotherrussia.org.

De Niro caught in Russian visa snafu http://www.upi.com/Entertainment_News/Movies/2010/10/18/De-Niro-caught-in- Russian-visa-snafu/UPI-99601287452475/

Published: Oct. 18, 2010 at 9:41 PM MOSCOW, Oct. 18 (UPI) -- Robert De Niro was held up for several hours at Moscow's Sheremetyevo Airport because his Russian visa had incorrect entry and departure dates, officials said.

The Moscow Times reported the Oscar-winning Hollywood star flew to Moscow from Rome Friday, but was prevented from entering Russia because of the paperwork problem.

The trip's organizers sorted out the matter with customs officials, while the 67-year-old American actor-director sipped espresso in the arrival hall, the newspaper said.

De Niro, who was eventually admitted into the country, has been in Europe promoting his new film "Stone."

All-Russia Internet conference to open in St Petersburg http://www.itar-tass.com/eng/level2.html?NewsID=15602158&PageNum=0

19.10.2010, 11.50

ST. PETERSBURG, October 19 (Itar-Tass) -- The All-Russia conference “Internet and modern society (IMS-2010) on issues of development of information technologies is opening in St. Petersburg on Tuesday. The conference is annually held in the northern capital since 1998.

The conference is organized by leading institutes of higher education of St. Petersburg, the Public Chamber of Russia, the Russian Information Society Development Agency and the Russian Electronic Libraries Association. The aim of the conference is to promote the development of inter-disciplined researches of information technologies, electronic collections, as well as interaction of information resources, formation of an electronic space of scientific researches and innovations.

The conference organizers describe the study of peculiarities of the use of technologies of information society in the humanitarian sphere, development of knowledge society and electronic management as an important accent of the current conference.

Russian Press at a Glance, Tuesday, October 19, 2010 http://en.rian.ru/papers/20101019/161005921.html

08:54 19/10/2010

A brief look at what is in the Russian papers today POLITICS

The leaders of France, Germany and Russia are meeting in Deauville in northern France. Nicolas Sarkozy and Angela Merkel are expected to formally react to Dmitry Medvedev's European security pact initiative.

(Nezavisimaya Gazeta, Vremya Novostei)

Sergei Sobyanin, Russian President Dmitry Medvedev's nominee for the Moscow mayor, has met with the ruling United Russia party and the Communists. He confessed that he does not have a clear program of action but has the experience and knowledge to resolve problems.

(Vremya Novostei, Vedomosti, Kommersant, Rossiiskaya Gazeta)

The Moscow mayor saga is not proof of conflict within the Medvedev-Putin tandem.

(Vedomosti)

BUSINESS

Prime Minister Vladimir Putin told foreign investors on Monday that the government was ready to privatize attractive stakes in state companies, but asked that they contribute "smart investments" of technology and know-how to improve the Russian economy.

(Moscow Times, Kommersant, Vremya Novostei)

Russia's chief sanitary doctor Gennady Onishchenko said Moldovan winemakers had "learned their lesson well" and "forgave" 14 Moldovan wine producers who were previously out of favor with the Russian consumer rights watchdog Rospotrebnadzor. Onishchenko made the statement after a group of Russian experts returned from a trip to Moldova, where they inspected wineries.

(Vremya Novostei)

SOCIETY

A Chechen convicted of killing Ruslan Yamadayev, a former State Duma deputy and powerful rival of Chechen President Ramzan Kadyrov, on a Moscow street in 2008 was jailed for 20 years Monday, while the Chechen who drove the getaway car got 15 years.

(Vremya Novostei, Moscow Times, Rossiiskaya Gazeta)

Russia's Supreme Court has supported a bill in line with which officials who take small bribes will be fined rather than jailed. (Rossiiskaya Gazeta)

The Khimki town court freed from custody opposition activist Maxim Solopov, accused of attacking the town administration building in late July. The court obliged Solopov not to leave the town. Human rights advocates praised the ruling.

(Kommersant, Vremya Novostei)

OIL AND GAS

The Russian oil industry needs a new tax regime and over 7 trillion rubles ($230 billion) of investment, according to a draft general plan of the industry's development until 2020.

(Vedomosti)

INVESTMENT

Russian Prime Minister Vladimir Putin, speaking at a meeting of the advisory board on foreign investment, declared First Deputy Prime Minister Igor Shuvalov an "investment ombudsman."

(Kommersant, Rossiiskaya Gazeta)

Russian General Staff to Experiment with ‘Mono-Ethnic’ and ‘Mono-Religious’ Units http://georgiandaily.com/index.php? option=com_content&task=view&id=20224&Itemid=72

October 19, 2010

Paul Goble

Staunton, October 18 – Confronted by growing violence in the ranks often along ethnic and religious lines and by calls from the Russian Soldiers’ Mothers Committees not put their sons in units with people of other nationalities, Moscow is planning to set up as an experiment some “mono-ethnic” and “mono-religious” battalions, according to a Moscow newspaper.

In “Nezavisimaya gazeta” today, Vladimir Mukhin reports that because of the growth of “dedovshchina” in the Russian military – officials say it is up by more than a third over the last year – the General Staff is studying the experience of “the Savage Divisions” as the mono-ethnic units at the end of the Russian Imperial period were known (www.ng.ru/printed/246560). An anonymous source in the General Staff told Mukhin that the high command sees the formation of such units in which would serve “individuals of a single nationality or followers of a single religion” as “a way out of the situation” in which violence and indiscipline has become commonplace.

The source added that these units will be formed as “an experiment” in several of the strategic commands and will resemble the already existing East and West battalions in Chechnya, yet another way in which Chechnya is having an impact on Russian life far beyond the borders of the North Caucasus.

Yury Netkachev, a retired lieutenant journal and frequent commentator on military affairs, told the Moscow daily that “in essence, this is a return to the experience of ‘the Savage Divisions’ which existed first in the army of the Russian Empire and then for a certain time in Soviet forces.” And he suggested that the idea had merit.

The Russian military leadership shares that view and sees the formation of such units as a means of avoiding a continuing rise in the number of criminal cases involving clashes between the increasingly numerous non-Russian and non-Orthodox troops and Russian soldiers, who as a result of demographic decline form an ever smaller share of those in uniform.

Over the past months there have been a number of clashes along ethnic and religious lines in the Russian army, most recently at the Sokol Air Base near Perm where soldiers from the North Caucasus refused to obey orders and the commander turned to the local mufti for assistance.

According to Colonel Vladimir Popov, a historian and specialist on the Caucasus, the reported cases are only the tip of the iceberg, and the extent of this problem is far greater than many assume. He noted that in the formation of units in Chechnya, the General Staff had even established a special rule on the balance of Caucasians and Russians.

If there are too many soldiers from the Caucasus relative to the number of Russian commanders, the former often refuse to obey the latter. And that problem is now spreading, he said. “With the deteriorating demographic situation and the higher birthrate in the North Caucasus, Muslim draftees from there will soon form more than half of the entire contingent of the Russian Army.”

“On the one hand,” he said, “it would be better if they all served in one unit and were commanded by officers from their own region” But such an approach carries with it problems of its own: What happens if at some point “entire battalions” formed in this way “refuse to subordinate themselves to the Ministry of Defense as happened in June 1941.”

Retired Major General Vladimir Bogatyrev, a member of the Association of Units of Reserve Officers, is even more worried about the consequences of forming mono-ethnic or mono-religious units. Doing so, he said, “will not save [the army] from the problems” of insubordination and violence.

Those can be overcome only if officers learn how to better work with soldiers as educators as well as commanders, something he suggested the current leadership of the defense ministry does not appear to understand. And he said that restoring “the Savage Divisions” would be a mistake: A century ago, many of the peoples of the empire “did not know Russian.”

But today, he continued, “the situation is different. Russia is trying to build a democratic society. And corresponding to that, its army must be both democratic and international.” If it isn’t, he clearly implied, then the Russian Federation faces an increasingly problematic future, one that might involve either collapse or even greater authoritarianism.

The “Nezavisimaya” article did not discuss in any detail the history of the Savage Division of the last years of the Russian Empire, but there is one aspect of their history that may also be playing a certain role in the thinking of those at the top of the Russian military and political system now.

The units that made up the Savage Division were among the most disciplined and combat ready in the Russian Imperial Army, and perhaps most relevant now, they were the last to be infected by the revolutionary spirit that ultimately destroyed not only the Russian Imperial Army but the Russian Empire itself.

National Economic Trends

Ruble Snaps Two-Day Drop Versus Dollar, Gains Against Euro http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ayYle2hLySW4

By Emma O’Brien

Oct. 19 (Bloomberg) -- Russia’s ruble snapped a two-day sliding streak against the dollar, strengthening 0.3 percent to 30.39 per dollar by 10:33 a.m. in Moscow. It was also 0.3 percent higher at 42.2750 per euro, gaining for a second day.

To contact the editor responsible for this story: Emma O’Brien at [email protected]

Last Updated: October 19, 2010 02:35 EDT

October 19, 2010 09:11 Banks have 521.5 bln rbs on CBR correspondent accounts on October 19 http://www.interfax.com/newsinf.asp?id=196200

MOSCOW. October 19 (Interfax) - Russian banks have 521.5 billion rubles on correspondent accounts in the Central Bank as of October 19 including 364.7 billion rubles for Moscow banks.

The balance on October 18 was 478.3 billion rublesand 320.4 billion rubles, respectively.

Banks had 593.8 billion rubles on deposit accounts in the Central Bank on October 19 against 649.2 billion rubles on previous day.

Corn Crop Likely Down, Imports Up http://www.themoscowtimes.com/business/article/corn-crop-likely-down-imports- up/420563.html

19 October 2010 Bloomberg

The corn crop may fall 24 percent this year, increasing the need for imported supplies, SovEcon said Monday.

The corn harvest may come to less than 3 million metric tons, compared with 3.96 million tons last year, the researcher said in a statement without being more precise. The nation harvested 6.68 million tons of grain in 2008.

Russia may import more than 2 million tons of corn in the marketing year that started July 1, with most of the deliveries sourced from Ukraine, said Andrei Sizov Jr., SovEcon managing director. Imports from the United States may come to “several hundred thousand tons,” with deliveries unlikely before the start of 2011, he said.

“Traders are starting to look for sources of grain not only for the Russian regions that border on Ukraine, but also” for areas in central and northwestern Russia, SovEcon said on its web site.

Corn prices in Russia exceed 7,000 rubles ($229) a ton and are still rising, according to the researcher.

October 18, 2010 Cracking the Piggy Bank http://www.russiaprofile.org/page.php?pageid=Business&articleid=a1287423765

By Svetlana Kononova Special to Russia Profile

Upcoming Elections May Put Russia’s Reserve Fund in Danger of Destruction The magazine Euromoney presented the Finance Minister of the Year 2010 award to Russian Finance Minister and Vice Premier Alexei Kudrin. The magazine praised his policy of preserving revenue generated by growing oil prices for the Russian budget. The Stabilization Fund that Kudrin set up did allow Russia to come out of the global financial crisis in much better shape than expected, but this “oil money” may not be around for much longer.

The award was presented to Kudrin during the autumn session of the International Monetary Fund (IMF) and the World Bank in Washington. “Kudrin is rightly hailed as a fiscal manager of the highest order,” Euromoney said. “Not just in the West, where his championing of the free market and fiscal prudence have long made him a favorite of foreign investors, but also in Russia, a country that has not always taken kindly to reformers. Entering the financial crisis with nearly $600 billion in foreign reserves allowed Russia to manage a 30 percent decline in the ruble. The Stabilization Fund also enabled Russia to pay off its foreign debt early. Kudrin is rightly praised for his commitment to tax and budget reform, Russia’s desire to join the World Trade Organization (WTO) and continuing the progress in privatization.”

Presenting the award, Padraic Fallon, the chairman of Euromoney Institutional Investor, noted that Kudrin’s policy focused on establishing reserves with oil-generated revenues despite considerable political pressure.

The Russian Finance Minister told journalists after the ceremony that the award is all the more precious since it was bestowed after the crisis. “Russia has already learnt this lesson; it was able to prepare and pass through this period. In this context, this is a result. And when you see your result, you feel satisfied. And when the result is praised by the professional community, it is especially important,” Kudrin said.

The Euromoney award is not the first time that Kudrin’s work has been recognized by the international financial community. In 2005 Kudrin received the Finance Minister of the Year award from Banker magazine, which belongs to the Financial Times group. In 2006 he was recognized as the best Finance Minister of a developing European country by the Emerging Markets newspaper, published by the IMF and the World Bank.

Kudrin has been running Russia’s Ministry of Finance since 2000, and he has been the only remaining “liberal reformer” in the Russian government since 2007. Kudrin’s proposals to continue privatization, increase the retirement age and cut the army of bureaucrats were repeatedly criticized by his political opponents, especially by the ruling United Russia party, which he refused to join.

His idea of setting up a Stabilization Fund still has both critics and supporters in Russia. “The Stabilization Fund is ‘dead money,’ which doesn’t work in the real economy. It would be better used for modernization projects and building infrastructure,” said Olga Chernishova, an economist at the Federal Treasury. But Alexander Osin, chief economist at Finam Management, disagreed. “I believe that the creation of the Stabilization Fund is one of Kudrin’s main achievements. When he became the Finance Minister in 2000, it was too risky to invest the ‘oil money’ inside the country,” he said. “Firstly, modernization projects would have been left unfinished by the beginning of the global economic crisis. Secondly, at that time private investors were much more interested in short-term, income-bearing placements in speculative areas of the Russian economy than in modernization projects. It means that Russia would have entered the crisis with a heavy load of expensive, unfinished projects, and without a ‘cushion’ like the Stabilization Fund.”

Russia and other BRIC countries have different strategies in terms of attracting private domestic and foreign investments, Osin explained. While Russia has decreased the role of the state in regulating the financial sector over the past decade, other BRIC countries have kept it. As a result, the volume of foreign investments per capita in Russia is $577, which is three to seven times less than in Asian countries and 30 times less than in Israel. “Now the Russian Finance Ministry has to solve two difficult tasks simultaneously – to optimize the budget and to stimulate the economy so that the real sector becomes more attractive to private investors,” Osin added. “The privatization of state banks and other state companies that the government plans to carry out is the next attempt to attract foreign investments to Russia. But it seems that immediate revenue is not the main goal of such privatization. The main goal seems to be to attract large foreign investors for the long-term.” Osin believes that Russia’s future strategy of economic development will depend on the success of this privatization policy.

But what will happen to the “safety cushion” in these circumstances? The better part of the Stabilization Fund, called the Reserve Fund, may soon be fully spent, experts say. In February of 2008 the Stabilization Fund was split into two parts – the Reserve Fund and the Fund of National Welfare of Russia. From September 2008 to March 2010 the amount of money in the Reserve Fund decreased 2.7 times to $58.9 billion. In April of 2010 Russian Prime Minister Vladimir Putin signed a decree that allows the Finance Ministry not to publicize information on the aggregate assets of the Reserve Fund and the Fund of National Welfare by February 1, 2012. Moreover, the ministry is no longer obligated to publish information on how oil revenues are spent on its Web site.

Russia is entering the “the pre-election season,” Kudrin said last week. That means that social spending may rise significantly to buttress the chances of the ruling United Russia party in next year’s elections. Experts believe that this might lead to increased inflation. Moreover, the destruction of the Reserve Fund may lead to quicker accumulation of state debt, economists believe. “We already can see it,” Osin said.

Business, Energy or Environmental regulations or discussions Russia to deliver on its Kyoto pledges http://english.ruvr.ru/2010/10/19/26915184.html

Three Russian energy projects will become its first contribution to the Kyoto Protocol adopted by the UN in 1992 as a measure to cut greenhouse gas emissions.

Three new hydropower plants near Moscow, in Siberia and the Urals should reduce Russia’s share of gas pollutants in the atmosphere by 4.3 million tons already in 2012.

The construction of the plants is conducted by German E.On and Russian OGK-4.

Russia signed the Kyoto Protocol in February 2005.

Gazprom, Novolipetsk, Razgulay, Polyus: Russian Stocks Preview http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=araCQdMMTwdU

By Maria Levitov

Oct. 19 (Bloomberg) -- The following companies may have unusual price changes in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

Russia’s Micex Index added 0.6 percent to 1,500.65. The dollar-denominated RTS Index was little changed at 1,582.47

OAO Gazprom (GAZP RX): The Russian gas-export monopoly said it boosted gas supplies to Turkey after deliveries to the country from Iran were disrupted. Gazprom rose 1.5 percent to 163.42 rubles.

OAO Novolipetsk Steel (NLMK RX): Russia’s biggest maker of steel by market value is due to report third-quarter production figures. Novolipetsk fell 1.6 percent to 110.94 rubles.

OAO Novorossiysk Commercial Sea Port (NMTP RX): Novorossiysk called an extraordinary general meeting of shareholders to consider buying 100 percent of Primorsk Commercial Port LLC for $2.15 billion, it said in an e-mailed statement. Novorossiysk fell 0.2 percent to 3.915 rubles.

OAO Razgulay Group (GRAZ RX): Wheat futures fell the most in two weeks on speculation that demand for the grain used in livestock feed will shrink as corn prices slump. Razgulay, the Russian grain and sugar producer, rose 0.5 percent to 44.599 rubles. OAO Polyus Gold (PLZL RX): Gold’s advance may pause after it failed to extend its rally at the end of last week and developed a “shooting star” formation, an indication that prices may decline, according to technical analysis by Barclays Capital. Polyus, Russia’s biggest gold-mine operator, fell 1.2 percent to 1,589.88 rubles.

To contact the reporter on this story: Maria Levitov in Moscow at [email protected]

To contact the editor responsible for this story: Willy Morris at [email protected]

Oligarch M&A Power Shown by Lowest TNK-BP Yields: Russia Credit http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aZvbXvY5aVco

By Torrey Clark and Jason Corcoran

Oct. 19 (Bloomberg) -- A rally in TNK-BP and VimpelCom Ltd. bonds are underscoring confidence in Russia’s billionaire businessmen to revive acquisitions from a five-year low.

TNK-BP’s dollar bonds due in 2012 surged yesterday, sending yields down 12 basis points to a record-low 3.28 percent, after BP Plc’s venture said it will spend $1.8 billion for BP assets in Venezuela and Vietnam, prices on Bloomberg show. VimpelCom’s Oct. 4 accord to purchase phone assets from Egyptian billionaire Naguib Sawiris in a $6.5 billion deal also drove yields on the Moscow-based company’s debt to a low. Mikhail Fridman, Russia’s third-richest man, was behind both deals.

Takeovers are climbing after an 86 percent slump in foreign purchases by Russian companies this year to $17.1 billion of deals, trailing the $33.9 billion by Indian companies and $29.3 billion out of Brazil, data compiled by Bloomberg show. The advances in TNK-BP and VimpelCom securities compare with losses on bonds in Europe and the U.S. after some of the year’s biggest acquisitions on concern the purchases may damage credit.

“TNK-BP’s financial metrics are quite comfortable,” Elena Anankina, a credit analyst at Standard & Poor’s in Moscow, said yesterday in an e-mail. Free operating cash flow covers 53 percent of outstanding debt, she said. The company had net debt of $5.8 billion at the end of June, according to TNK-BP’s website.

Oil prices above $80 a barrel through this month are helping to lift Russia’s economy after its worst recession since the Soviet era. Economic growth in the world’s largest energy exporter is forecast by the government at 4 percent this year. Deputy Economy Ministry Andrei Klepach said Oct. 6 that the country will have to “fight” to achieve growth of 3.9 percent to 4.5 percent in the next three years. Billionaires

Billionaires German Khan, Len Blavatnik, Victor Vekselberg and Mikhail Fridman, whose Alfa Group owns 39 percent of VimpelCom, control half of TNK-BP through a company called AAR. BP, based in London, owns the other 50 percent, according to TNK’s web site.

Fridman said last month the Russian shareholders’ relationship with BP has improved since a dispute in 2008 over management and expansion. The billionaires said at the time that BP treated the venture as a branch and stymied their attempts to expand overseas. Then TNK-BP Chief Executive Officer Robert Dudley, who denied the accusations, fled Russia two years ago after heading the venture for five years, citing “sustained harassment” and amid difficulty renewing his visa, as BP and its billionaire partners battled for control. Dudley took over as head of BP on Oct. 1.

Diversification

“One of TNK-BP’s bigger problems is its dependence on Russia, so anything that can change that is a positive for investors,” said Neil Murray, the head of corporate bonds at Scottish Widows Investment Partnership in Edinburgh who manages the equivalent of $3.8 billion including TNK-BP bonds. “It diversifies their business.”

TNK-BP accounts for about a quarter of BP’s output, a fifth of reserves and an eighth of group profits, according to Vladimir Buyanov, a Moscow-based spokesman for BP.

Russia and Venezuela, which signed an accord to support TNK-BP’s acquisition of the assets in the South American country, are “strategic partners,” President Dmitry Medvedev said last week during a visit by his counterpart Hugo Chavez to Moscow.

‘Ample Debt Capacity’

“TNK-BP has sufficient cash flow and ample debt capacity to pay for these assets,” Stan Polovets, chief executive officer of AAR, the Moscow-based consortium made of holding companies Alfa Group, Access Industries and Renova Group, said in an interview this month. “Finding the cash for these assets is not going to be a problem.”

TNK-BP may have $7.5 billion in cash flow from operations this year and expects to pay dividends of about $3 billion after the acquisition, Polovets said. Standard & Poor’s raised TNK- BP’s rating one level to BBB-, its lowest investment-grade ranking, in December. Yields on TNK-BP bonds due in 2012 have dropped from as high as 32.997 percent on Oct. 27 2008.

VimpelCom’s bonds rallied on prospects the Sawiris merger will transform the Russian company into the world’s fifth- largest mobile phone operator. The enlarged company would have a subscriber base of more than 174 million, and give the Russian company access to markets in Africa and the Middle East, according to its statement on Oct. 4. Dollar Debt Falls

Yields on VimpelCom securities due in 2013 fell to a low of 4.66 percent the following day and were at 4.84 percent yesterday, down from 5.91 percent on Aug. 26. Shares of VimpelCom, rated BB+ by S&P, one level below investment grade, rose 3.8 percent in New York since the announcement.

Russia’s dollar bonds due in 2020 fell for a fourth trading day yesterday, increasing the yield to 4.25 percent from 4.24 percent. The yield on the country’s ruble notes due August 2016 climbed 4 basis points, or 0.04 percent, to 7.12 percent.

The extra yield investors demand to hold Russian debt rather than U.S. Treasuries rose 6 basis points to 203, according to JPMorgan Chase & Co. EMBI+ indexes. The difference compares with 152 for debt of similarly rated Mexico and 181 for Brazil, which is rated two steps lower at Baa3 by Moody’s Investor Services.

Cost of Protection

The yieldspread on Russian bonds is 50 basis points below the average for emerging markets, down from a 15-month high of 105 in February, according to JPMorgan indexes.

The cost of protecting Russian debt against non-payment for five years using credit- default swaps increased 2 basis points to 136, according to data provider CMA. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.

Credit-default swaps for Russia, rated Baa1 by Moody’s Investors Service, its third- lowest investment grade, cost the same for the similar contracts for Turkey.

The ruble weakened 0.8 percent to 30.47 per dollar, the weakest closing price since Oct. 1. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency movements and interest rate differentials and allow companies to hedge against currency movements, show the ruble at 30.6658 in three months.

Happy Holders

CenturyLink Inc. bonds have slumped since the Monroe, Louisiana-based company, formerly known as CenturyTel, agreed in April to buy Qwest Communications, Inc. for about $10 billion. The yield spread on the company’s $500 million of 6 percent notes due 2017 over similar-maturity U.S. Treasury bonds grew 91 basis points to as high as 303 points in the month after the deal was announced April 22. The difference is 310 basis points today, according to Bloomberg prices.

The extra yield investors demand to hold TNK-BP’s dollar bonds due 2020 rather than Russian sovereign dollar bonds with similar maturity narrowed 7 basis points to 151 since July 28 when state-run Petroleos de Venezuela SA said BP was discussing selling assets in the South American country to TNK-BP.

“We think that the bonds are still relatively cheap,” said Murray at Scottish Widows. “We bought ours when they were issued, and we’re still happy holders.”

To contact the reporter on this story: Stephen Bierman in Moscow at [email protected]

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

UPDATE 1-Russia NLMK to up Q4 exports on domestic weakness http://af.reuters.com/article/energyOilNews/idAFLDE69I05720101019

Tue Oct 19, 2010 8:29am GMT

* NLMK says expects Q4 seasonal decline in Russia market

* Sees Q4 steel prices at Q3 levels

* Co's Q3 crude steel output 3.0 mln T, up 2.6 pct q/q

(Adds details)

MOSCOW, Oct 19 (Reuters) - Novolipetsk Steel, Russia's fourth-largest steel maker, said on Tuesday it could boost export volumes in the fourth quarter as domestic demand declines with the onset of the Russian winter.

"In Q4 2010 we expect some seasonal decline in demand from the domestic construction sector, which may impact the overall sales structure and increase export volumes," it said.

"According to our preliminary estimates, steel prices will be comparable to the Q3 level."

The company, controlled by Russia's richest man, Vladimir Lisin, did not provide any financial guidance for the current quarter.

It reiterated that the margin on its third-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) would decline to 30 percent from 36 percent in the second quarter and also said sales in the period should total $2.1 billion.

In the third quarter of 2009, Novolipetsk Steel, also known as NLMK, reported sales of $1.7 billion. Steel makers in Russia, the world's third-largest steel producer, are benefiting from their position as leading low-cost producers after a difficult 2009.

Domestic mills returned to full capacity in the second half of last year thanks largely to export demand, while domestic sales remained slow.

NLMK also reported that third-quarter crude steel output reached 3 million tonnes, up 2.6 percent from the second quarter and up from 2.9 million tonnes in the year-earlier period. (Reporting by Alfred Kueppers; Editing by Will Waterman)

Alrosa May Seek to Raise $2.5 Billion in IPO, Kommersant Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aXqG_SzXMttg

By Ilya Khrennikov

Oct. 19 (Bloomberg) -- ZAO Alrosa, the world’s largest diamond miner, may seek to raise between $2 billion and $2.5 billion through an initial public offering, Kommersant reported, citing Chief Executive Officer Fyodor Andreyev.

Alrosa may sell a 20 percent stake in Moscow and possibly also London and use the proceeds to develop new mines, including the GMK Timir iron ore project in East Siberia, the Moscow-based newspaper said, citing Andreyev.

The company plans to maintain gem production at between 32 million carats and 34 million carats for the next 10 years, Kommersant said. A carat is a fifth of a gram.

Alrosa may also decide at a board meeting in December to sell non-mining assets including hydropower plants and oil fields in Angola and Russia, Kommersant said.

To contact the reporters on this story: Ilya Khrennikov in Moscow at [email protected]

To contact the editor responsible for this story: Amanda Jordan at [email protected]

Rothschild Bought More Rusal Shares After IPO, Vedomosti Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aMoo9nijGyQw

By Maria Kolesnikova Oct. 19 (Bloomberg) -- Investor Nathaniel Rothschild bought 17 million more shares in billionaire Oleg Deripaska’s United Co. Rusal after the Russian aluminum producer’s initital public offering in Hong Kong, Vedomosti reported.

Rothschild, one of the so-called cornerstone investors who backed Rusal’s $2.24 billion IPO in January, told the Moscow- based newspaper that he’s seeking “more exposure” to commodities.

Click here for web link

To contact the reporter on this story: Maria Kolesnikova at [email protected]

To contact the editor responsible for this story: Brad Cook at [email protected]

UralChem May Revisit London IPO Plan, Sell $525 Million of Bonds http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aamTfiluvNd8

By Ilya Khrennikov

Oct. 19 (Bloomberg) -- UralChem Holding Plc, Russia’s second-largest producer of nitrogen-based fertilizers, may sell about $525 million of bonds to repay debt and revisit a plan for an initial public offering in London scrapped in April.

“If we see the situation in financial markets improve and investors aren’t nervous about external factors anymore, we can go ahead with another IPO attempt,” Chief Executive Officer Dmitry Osipov said in an interview in Moscow. “It’s only one of the options. We also have everything ready for a bond sale.”

UralChem canceled its proposed IPO on April 29, saying volatile markets failed to give it a “fair value.” The Moscow- based company, which had $1.34 billion of debt as of June 30, may consider selling bonds that can be converted into dollars after their sale, Osipov said.

UralChem, which increased its share of domestic sales to 40 percent in the first half from about 30 percent a year earlier, today said its net loss in the period narrowed to $13 million from $56 million. Revenue grew 40 percent to $663 million on higher fertilizer prices as rising food consumption and shrinking arable land in developing countries increased demand.

The net loss resulted from exchange rates and interest costs, Osipov said, while earnings before interest, tax, depreciation and amortization gained 90 percent to $137 million. UralChem plans to invest at least $300 million to boost fertilizer output 15 percent by 2014, Osipov said yesterday. Production may climb to 5.5 million metric tons from the 4.8 million tons planned for this year.

The company expects to report a “significant drop” in Russian sales for the third quarter as farmers cut winter-grain sowing after the country’s worst drought in 50 years, Osipov said. Producers are meeting government requests to hold down prices, which are about 10 percent lower than export prices minus transport costs, he said, adding that domestic prices may move in line with inflation next year.

To contact the reporter on this story: Ilya Khrennikov in Moscow at [email protected].

To contact the editor responsible for this story: Amanda Jordan at [email protected].

O'Key to raise up to $491 million in London IPO http://in.reuters.com/article/idINWLA569920101019

11:57am IST

MOSCOW, Oct 19 (Reuters) - Russian retailer O'Key could raise up to $491 million in a London IPO after pricing its offering at $9.9-$12.9 a share, valuing the company up to $3.26 billion.

Russia's third largest grocer by sales said on Tuesday it would sell up to 38.1 million shares in the form of GRDs -- representing a free float of 14.2 percent.

Goldman Sachs and VTB Capital (VTBR.MM: Quote, Profile, Research) were joint bookrunners on the offering. (Reporting by John Bowker; Editing by Dan Lalor)

Russian tycoon Prokhorov's Intergeo to sell coal assets to India's NMDC - paper http://en.rian.ru/business/20101019/161007281.html

11:07 19/10/2010

Intergeo, a new mining subsidiary of Russia's Onexim group private equity fund owned by billionaire Mikhail Prokhorov, is preparing to sell the Yakutia-based Kolmar coal company in northern Russia to Indian NMDC for at least $400 million, Kommersant business daily reported on Tuesday. NMDC, Asia's third iron ore producer, is currently conducting due diligence of Kolmar, and will formulate its offer by December 1, Kommersant said, quoting Intergeo Chief Executive Officer Maxim Finsky.

If NMDC decides against buying the asset, Kolmar will hold an Initial Public Offering (IPO) to find investors, the paper said.

The amount of $400 million, which Intergeo expects to raise from the sale of Kolmar, exceeds the amount by $100 million, which the company paid for the asset's acquisition, the paper said.

Analysts polled by the paper say the price of the deal could be higher. Nikolai Sosnovsky, an analyst at Uralsib investment bank, told the paper that the Indian metals company could offer a good premium for the asset as it lacked its own coal resources.

The Associated Press October 18, 2010, 10:32AM ET

PepsiCo to invest $140 million in Russian plant http://www.businessweek.com/ap/financialnews/D9IU5L5G0.htm

NEW YORK

PepsiCo Inc. will invest $140 million to build its 10th plant in Russia, a beverage plant in the Rostov region, the company said Monday.

The soft drink and snack maker, which is based in Purchase, N.Y., has been ramping up its investments in Russia and other emerging markets to expand its business overseas. The company announced a $1 billion investment program for Russia last year.

PepsiCo said Monday its CEO, Indra Nooyi, has signed a memorandum with leaders of the Rostov region to build the plant.

The plant will be located in Azov, where PepsiCo just completed a snack plant. The total investment for the two plants is worth $250 million.

Shares of PepsiCo fell 6 cents to $66.62 in morning trading Monday.

October 19, 2010 10:20 Sukhoi narrows IFRS net losses 20% to $91 mln in 2009 (Part 2) http://www.interfax.com/newsinf.asp?id=196223

MOSCOW. Oct 19 (Interfax) - CJSC Sukhoi Civil Aircraft narrowed net losses to International Financial Reporting Standards (IFRS) 20.5% in 2009 to $91.71 million, the company said in an earnings report.

Sales revenue grew 20% to $7.202 million, assets rose 31% to $1.126 billion, net debt decreased by 2.5% to $765.7 million, operating losses came to $65.526 million and exchange-rate losses were $23.3 million.

The report says results in 2009 were influenced above all by a 110% increase in government grants to $100.6 million, lower administrative and commercial expenses, higher interest spending and a weaker ruble.

Sukhoi Civil Aircraft's major project is the Sukhoi Superjet 100, which will replace the Tu-134 passenger planes. The first planes should be delivered to airlines by the end of this year.

Members of the Sukhoi Group own 75% of Sukhoi Civil Aircraft, and World's Wing SA owns 25%.

Interros Ends Rusal Accord Over ‘Destructive Actions’ at Norilsk http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=awNqGMd29Mt0

By Maria Kolesnikova

Oct. 19 (Bloomberg) -- Billionaire Vladimir Potanin’s Interros Holding Co. terminated a cooperation agreement with United Co. Rusal, calling for an end to “destructive actions” towards OAO GMK Norilsk Nickel, Russia’s biggest mining company.

Interros will vote against a proposal to replace Norilsk’s board early, which was intiated by Rusal, Oleg Deripaska’s aluminum producer, amid a shareholder dispute, the Moscow-based holding company said today in an e-mailed statement.

To contact the reporter on this story: Maria Kolesnikova in Moscow at [email protected]

To contact the editor responsible for this story: Torrey Clark at [email protected]

Russia's Interros to support current board at EGM http://in.reuters.com/article/idINLDE69I0CZ20101019 12:48pm IST

MOSCOW, Oct 19 (Reuters) - Russian tycoon Vladimir Potanin's Interros private equity fund, which holds about 25 percent of Norilsk Nickel (GMKN.MM: Quote, Profile, Research), said on Tuesday it will support the current board at the company's EGM on Thursday.

"Interros intends to vote against the early termination of the board of directors at the extraordinary general shareholders' meeting on October 21 and recommends that minority shareholders of Norilsk also take this action," it said.

Shareholders Potanin and Oleg Deripaska, who also holds roughly 25 percent of the world's largest nickel and palladium producer, are locked in a long running feud over control of the miner and its strategy. [ID:nLDE68E23Y]

Deripaska wants shareholders to dismiss the current board at the EGM and bring in new executives to spearhead a strategic shift at Norilsk Nickel.

(Reporting by Alfred Kueppers, editing by Toni Vorobyova)

Acron mulls IPO of Canadian potassium subsidiary http://www.rbcnews.com/free/20101019103417.shtml

RBC, 19.10.2010, Moscow 10:34:17.Russia's fertilizer producer Acron is now revising its Canadian assets: it is putting up for sale a number of potassium chloride fields in Canada's Saskatchewan province that it purchased back in 2008. Acron plans to use the funds raised to carry out additional geological prospecting at other fields. According to RBC Daily, Acron could stage an IPO of its Canadian subsidiary as early as 2012 to finance a potassium production project. On October 18, Acron announced that it sold the rights to develop one of its Saskatchewan fields to Canada-based Sanya Resource Corporation for CAD 6m.

For the Record 19 October 2010

Norilsk Nickel said Monday that its first shipment of metals to Shanghai, China, via the Arctic Ocean arrived in Shanghai. (Bloomberg)

Central Bank Chairman Sergei Ignatyev said Monday that Russia should ensure that creditors of International Industrial Bank get paid. (Bloomberg) The government may grant extraction tax breaks for up to 12 years for liquefied natural gas produced on the Yamal Peninsula, according to a statement on the government’s web site on Monday. (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

Russian court declares TNK-BP's Kovykta insolvent http://www.reuters.com/article/idUSLDE69I0DW20101019

3:58am EDT

* Court starts bankruptcy proceedings for RUSIA Petroleum

* TNK-BP's RUSIA Petroleum owns giant Kovykta gas field

* Bankruptcy proceedings to go on for 6 months, till April

MOSCOW, Oct 19 (Reuters) - A Russian regional court declared RUSIA Petroleum, the licence holder of the giant Kovykta gas field, majority owned by Russia's TNK-BP (TNBPI.RTS: Quote, Profile, Research, Stock Buzz), insolvent on Tuesday and opened bankruptcy proceedings.

The bankruptcy proceedings will go on for six months, until April 19 2011, the court said in an announcement posted on the Irkutsk Arbitrage Court web site.

TNK-BP, half owned by British major BP (BP.L: Quote, Profile, Research, Stock Buzz) and a quartet of Russia-connected billionaires, filed a petition to initiate bankruptcy proceedings for RUSIA Petroleum in June and said that it was determined to recover its investment in the gas project. [ID:nLDE652073]

In February, one of TNK-BP's shareholders, German Khan said that TNK-BP had invested around $1 billion in the Kovyka project and is looking to recover these costs. [ID:nLDE61P1OZ]

The East Siberian Kovykta gas field, 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 its gas behemoth Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) a gas export monopoly. Russian officials have repeatedly threatened to withdraw the Kovykta licence from TNK- BP for low production volumes, and TNK-BP announced its decision to withdraw from the project in 2007.

The company 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 fizzled out after Gazprom's finances became stretched because of the financial crisis and unclear prospects on gas exports to China.

(Reporting by Jessica Bachman; editing by Keiron Henderson)

Russia invites BP, Total to offshore oil projects http://af.reuters.com/article/commoditiesNews/idAFLDE69H24220101018

Mon Oct 18, 2010 5:03pm GMT

MOSCOW Oct 18 (Reuters) - Russia's top energy officials met with the chief executives of France's Total (TOTF.PA) and Britain's BP (BP.L) on Monday, to discuss potential cooperation in offshore oil deposit projects usually closed to foreigners.

Deputy Prime Minister Igor Sechin and Eduard Khudainatov, the CEO of Russia's largest producer Rosneft (ROSN.MM) held a meeting with Total's Christophe de Margerie and another one with BP's Robert Dudley, a Rosneft spokesman said.

Among other issues, "the companies discussed potential future cooperation on offshore deposits, " he said.

The meetings came as Prime Minister Vladimir Putin on Monday said Russia needs to attract more foreign investors. [ID:nLDE69H10A]

Currently only Rosneft and Gazprom (GAZP.MM), another state-controlled energy giant, have the right to develop Russia's continental shelf. But from the start of 2011 the list is expected to be widened and to include foreign firms [ID:nLDE68S0RB] (Reporting by Katya Golubkova; Writing by Toni Vorobyova)

LNG construction on Yamal in 2012 http://www.barentsobserver.com/lng-construction-on-yamal-in-2012.4831915- 116320.html 2010-10-19 Russia's largest independent gas producer Novatek plans to start construction of an LNG production plant on the Yamal Peninsula in 2012.

The construction will be carried out in three steps – the first is to start in 2012 and is expected to be completed in 2016, Reuters reports. The start of construction of the second and third trains is set for 2013 and 2014, respectively, and they will be finished in 2017 and 2018.

In June 2010 Novatek and Gazprom signed a project cooperation agreement on construction of a LNG plant on Yamal. The project is expected to cost 18-20 billion USD.

Both Novatek and Gazprom control huge gas reserves at Yamal. Gazprom is proceeding with the development of its Bovanekovo field located on the west side of the peninsula, while Novatek is planning production at its South Tambey field on the eastern side of the peninsula.

Novatek plans to produce 16 million tons of LNG per year. The company has earlier told about plans to use the Northern Sea Route to export gas to Asia.

Russia, the world's largest energy producer, aims to produce 1 trillion cubic metres of gas by 2030, and during his visit to Novatek's production region, Putin said the global LNG market would double by 2015.

Gazprom

Gas Curtain Divides Europe http://www.iar-gwu.org/node/208

Posted by Managingeditor on Tue, 10/19/2010 - 01:28 in Europe and Eurasia, International Trade and Investment

By Yvonne Chen Contributor October 18, 2010

A new cold war is brewing in Europe. In this war, Russia is still a powerhouse, but some players have switched sides. The crux of the conflict is no longer economic ideology, but rather energy policy. One or two snowstorms in the winter are bad, but imagine it without heating. Then, imagine it lasts for seven months. This is the situation Poland, Ukraine, Slovakia and Czech Republic are facing if construction of the new Northern European gas pipeline, Nord Stream goes according to plan.

Experts have coined the term “energy poverty” to describe the gap in winter heating affordability among Poles. In fact, Polish gas prices were up 23 percent by its national operator PGNiG in October 2009, just before the long winter. Over nine billion cubic meters of the total 14 billion cubic meters demanded last year was imported through from the Yamal gas pipe from Russia. Poland currently has no capacity to develop transmission from domestic and non-Russian sources. Only one billion cubic meters annually comes from non-Russian sources.

In much the same way that the United States is dependent on Middle East oil, Europe is reliant on Russian gas (with the exception of Norway due to its offshore sources and small population). Gas is used for heating. Gas is sent to Europe from Russia through pipelines (see map).

But high prices are just the beginning. While the Cold War is long over, Russia’s new weapon of choice is its natural gas monopoly. In the summer of 2009, Russia threatened that it would cut off gas transmission to Poland in retaliation for siding with Georgia during the Russian-Georgian war the previous year. A 2007 report issued by the Swedish Defense Research Agency counted over 55 incidents since 1991 of cut-offs, explicit threats, coercive pricing policy and certain takeovers regarding political bargaining connected to Russia’s gas monopoly. The largest demonstration to date occurred in January 2006 and January 2009, when Russia cut off Ukraine for months each time and, in turn, cut off the rest of Europe.

Countries in Western Europe are hoping to avoid another crisis caused by poor political relations between Russia and other Central European transit countries. That is why they are partnering with Germany to get the gas directly. With completion anticipated in 2012, the Nord Stream pipeline runs beneath the Baltic Sea from Vyborg, Russia to Griefswald in Germany. It is expected to carry a maximum of 55 billion cubic meters annually and to save over $1 billion annually in transit taxes and lower prices for Western Europe. Gazprom, Russia’s state owned natural gas company owns 51 percent of Nord Stream shares while E.ON and BASF each own 20 percent, and N.V. Nederlanse Gasunie 9 percent.

Russia experts Piotr Dutkiewicz and Richard Pipes argue that Russian identity is still at odds with the loss of its empire. Russia faces huge modernization challenges, while still trapped in a paradigm of imperial policy. The most noticeable manifestation of this tension is its attitude to the small former Soviet bloc states. To countries that are highly dependent on Russian gas such as Poland and Ukraine, the opening of the new pipe is worse than any previous threat. All of the gas to Western Europe currently flows through current gas transit countries in Eastern Europe that includes Poland. Poland is at risk of huge energy insecurity because Russia is planning to send gas to Western Europe through the Baltic Sea. When the project is finished in 2012, Poland will have to beg Russia and Germany for access to Nord Stream. In fact, Poland has already started negotiating the construction of a connection to Nord Stream.

Some experts argue that the pipeline is more political than just good business for Russia and Western Europe, noting that it is doubtful that the project will be profitable at all. It is expected to cost up to 12 billion USD but nobody can be sure about the final cost – Nord Stream must lay the pipe on the bottom of the Baltic Sea. It is impossible to predict how many World War II-era sea mines require removal. Moreover, the Baltic Sea is a small, shallow, inland sea. If the pipe breaks, there will be a huge and expensive ecological catastrophe to clean up.

Russia may enjoy good economic and political relations with Western Europe now – but will this always be the case? After Nord Stream is launched, it will be interesting to see how Russia handles its European gas monopoly over Western Europe.

This image is being used under Creative Commons licensing. The original source can be found here.