Russia 091210

Basic Political Developments RIA: Russia, U.S. to discuss prevention of incidents at sea - A U.S. Navy

delegation will visit Russia on December 10-12 to discuss the prevention of incidents at sea and future bilateral cooperation, a Russian Navy spokesman said.

AP: Russian FM: US, Russia close to reaching arms deal - Sergey Lavrov sounded upbeat Wednesday when asked about the prospects for a quick successor deal to the 1991 START I treaty that expired Friday.

Itar-Tass: US, RF generally coordinate doc to replace START-1 -Dept of State The Georgian Times: Georgia-key issue of disagreement between Russia and U.S.

- Georgia remains the key issue of disagreement between Russia and the United States - Philip Gordon, assistant secretary of state for Europe and Eurasian affairs has said at the International Relations` Council, while the participants were discussing the U.S. relations with European countries.

RIA: Russia, Belarus to discuss strategic partnership in Moscow BarentsObserver: Still no official confirmation on failed missile launch AFP: New Russian missile fails again in test: reports The Straits Times: Russian missile test fails again BarentsObserver launches BorderZone portal - The BorderZone website is located

at the address: www.barentsobserver.com/borderzone Itar-Tass: RF-Dutch intergovt comsn meeting to be held in May 2010-Zubkov Bloomberg: China Imposes Duties on U.S., Russian Steel Imports (Update1) ANA-MPA.gr: Deputy FM Kouvelis on Greek-Russian bilateral cooperation Emportal.rs: Greece, Russia boost transport ties - Visiting Russian transport

minister Igor Levitin and Greece's minister of infrastructure transport and networks Dimitris Reppas on Wednesday discussed further development of bilateral cooperation in the sectors of road, rail and air transports.

PressTV.ir: Kiriyenko: Bushehr plant ready next year - Russian Prime Minister Vladimir Putin and Kiriyenko discussed Rosatom's cooperation with Russian and foreign partners and the corporation's development plans for 2010 in a meeting on Wednesday.

Reuters: Areva gets legal ruling over Siemens/Rosatom JV Novinite.com: Russia Offers Again Funding for Bulgaria's Nuclear Project Standartnews: Moscow Presents Amended Agreement on NPP Belene Focus: Finam, Russia: Bulgaria buries Burgas-Alexandroupolis and Russia is

aware of it Itar-Tass: Russia CEC sending delegation to Abkhazia elections Today.az: Border and customs control in passenger trains en route Azerbaijan-

Russia and Russia-Azerbaijan simplified 24.kg: Known Russian political analyst attacked in Bishkek 24.kg: Known Russian political analyst attacked in Bishkek RIA: Analyst beaten in alleged political attack in Kyrgyzstan The Moscow Times: Communists Give Support to Medvedev - President Dmitry

Medvedev found an unlikely ally Wednesday in Communist leader Gennady

Zyuganov, who praised the president and criticized Prime Minister Vladimir Putin at a presentation of his own plan to modernize Russia.

Bloomberg: Russia May Amend Law Deterring Foreign Mine Investors (Update1)

The Moscow Times: Far East Investments Aim at Asian Market Itar-Tass: Chukotka reports biggest cost of food basket in Russia Interfax: Perm nightclub fire death toll rises to 131 RIA: Attackers in Ingushetia miss military vehicle, hit private home RFERL: Russian Police Search Apartment Of Opposition Activists The Moscow Times: From Megatons to Megawatts - According to the U.S.

Energy Department, in 2007 about 40 percent of nuclear fuel used by the U.S. nuclear power sector came from Russia  - By Gregory Austin and Danila Bochkarev

Bloomberg: Hermitage Buys $4.8 Million Popoff Collection as Auction Flops Bloomberg: Magnitude 6.1 Earthquake Strikes Sea of Okhotsk, USGS Says AMEinfo.com: Russia info agency to relaunch Arabic paper - The Russia

Information Agency (RIA Novosti) has re-launched its monthly newspaper, Moscow News in Arabic in the Arab world, KUNA has reported.

National Economic Trends RBC: Russia plans to start borrowing abroad in 2010 Interfax: Russia to settle debt to London Club by end of the year – Pankin Bloomberg: Russia to Sell Eurobonds No Earlier Than March, Pankin Says Bloomberg: Russian 11-Month Budget Deficit Widens to 4.9% of GDP (Update2) RenCap: Inflation in the first week of December picks up from zero but remains

historically low Agrimarket.info: Russia to increase grain quality Interfax: Russia raises import duty on rice by 70% PR-inside.com: Russia Agribusiness Report Q1 2010 - new report released

Business, Energy or Environmental regulations or discussions RenCap: Government to sell its 25% stake in TGK5 RenCap: BTA Bank Russia proposes debt restructuring with high risks Reuters: Sberbank exec says RUSAL could list shares in Q1 Reuters: Russia Sberbank may borrow abroad in H2 2010 Reuters: RPT-UPDATE 1-Sberbank to still buy Eurozone sovereign securities Reuters: Sberbank sees 25 pct gains on securities portfolio Reuters: Russia's Prof-Media plans IPO to repay debt-paper The Moscow Times: Rosatom Expects $17Bln in Revenues Bloomberg: Renaissance Expands Into Belarus Before State Asset Sales Start Bloomberg: Magnit November Sales Rise 19% to $470 Million on Store

Openings BNE: State could take stake in Avtovaz

Activity in the Oil and Gas sector (including regulatory) Upstreamonline: Kentz snares Sakhalin deal Oil and Gas Eurasia: Sevmash, Doris Engineering Join Forces

Bloomberg: E.ON Unit to Import Less Russian Gas This Year, Die Welt Says Bloomberg: LUKoil Drills for Saudi Gas Alfa: ESPO tariff proposed at $52/ton, tariffs in other directions are set to rise by

20% The Journal of Turkish Weekly: "Friendship Pipeline" Boosts Cooperation with

Neighbors: Kazakh Manager Barentsobserver: Oil pipe explosion on Yamal

Gazprom UPI: Gazprom hosts CNPC for gas talks Reuters: E.ON Ruhrgas may buy less Russian gas this year Dow Jones: Keppel Corp Units Get Contracts Worth S$160 Million - Work on the

rig is expected to start in the first quarter of 2010 and will be delivered to Libya for Russia's Gazprom in the second quarter of next year, Keppel said.

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Full Text Articles

Basic Political Developments

RIA: Russia, U.S. to discuss prevention of incidents at seahttp://en.rian.ru/mlitary_news/20091210/157179036.html

03:2010/12/2009

A U.S. Navy delegation will visit Russia on December 10-12 to discuss the prevention of incidents at sea and future bilateral cooperation, a Russian Navy spokesman said.

During a series of meetings between the visiting group of U.S. naval officials and Russia's top Navy commanders the sides "will discuss the implementation of the Agreement on the prevention of incidents at sea and the future cooperation between the Russian and the U.S. navies," the spokesman told RIA Novosti.

The Russian-U.S. Agreement on the prevention of incidents at sea was signed on 25 May 1972 in Moscow by the Secretary of the Navy for the United States and the Commander in Chief of the Soviet Navy for the Union of Soviet Socialist Republics (USSR).

In May 1973, during the first annual review, a protocol to the agreement was negotiated which extends certain provisions of the agreement to include non-military ships.

It was established to increase communication of military activities, thereby preventing miscalculations and avoiding armed conflicts that might arise from a misinterpretation of one side's intentions as hostile.

The agreement is extended automatically every three years.

In addition, Russia has long proposed to develop a draft international agreement on the prevention of incidents underwater to ease tensions over activities of nuclear submarines in neutral waters.

The proposal stipulates that countries which possess submarine fleets should warn other countries about the activities of their submarines in specific areas during patrol or training missions to avoid underwater collisions with submarines of other navies.

A recent collision between a British and a French nuclear sub has added urgency to the work on such an agreement.

The Royal Navy's HMS Vanguard and the French Navy's Triomphant collided in the Atlantic Ocean on the night between February 3-4, 2009.

HMS Vanguard was on a routine patrol in the Eastern Atlantic Ocean with a crew of 135, and was armed with a maximum of 16 Trident 2 D5 ballistic missiles carrying up to 48 warheads in total. Triomphant was returning from a tour of duty when the incident occurred; it was carrying a crew of 111, and was equipped with 16 M45 ballistic missiles with up to 48 warheads in total.

Both vessels sustained damage, but no injuries or radiation leaks were reported.

Although the U.S. opposes the signing of an agreement which could impose a certain degree of control over its large fleet of nuclear-powered submarines, Washington has to respond to the increased activity of the Russian submarines in the Arctic and near the U.S. coast.

In July, the United States was unable to detect the presence of Russian strategic submarines in the Arctic before they test-launched two ballistic missiles.

In August, two Russian attack submarines were spotted in international waters off the U.S. coast.

Russian President Dmitry Medvedev reiterated in November that Russia planned to build up a constant presence throughout the world's oceans.

So far, nuclear-powered strategic and attack submarines remain the core of Russia's ocean-faring fleet.

MOSCOW, December 10 (RIA Novosti)

AP: Russian FM: US, Russia close to reaching arms dealhttp://www.google.com/hostednews/ap/article/ALeqM5gEKQ943GssaqHeZz2h__Syvt6c3gD9CG5KDO0

(AP) – 6 hours ago

MOSCOW — Russia and the United States will sign a new nuclear arms deal shortly, the Russian foreign ministry said Wednesday.

Sergey Lavrov sounded upbeat Wednesday when asked about the prospects for a quick successor deal to the 1991 START I treaty that expired Friday.

Asked by a reporter whether the agreement could be signed by President Barack Obama and Russian President Dmitry Medvedev at the sidelines of the international climate summit in Copenhagen, Lavrov said: "The treaty will be signed soon."

He wouldn't elaborate.

Obama is set to attend the meeting in Copenhagen on Dec. 18, and Medvedev also could go.

White House spokesman Robert Gibbs said on Wednesday that negotiators continue to work to replace the expired treaty. But Gibbs said no ceremony has been scheduled to sign a new treaty.

The START I obliged each country to cut nuclear warheads by at least a quarter, to about 6,000 and included detailed verification procedures. Obama and Medvedev agreed at a summit in July to each cut nuclear warheads to between 1,500 and 1,675 within seven years as part of a new treaty.

In Washington, Daryl Kimball, executive director of the private Arms Control Association, and Linton Brooks, arms control negotiator for the Bush administration, also were optimistic an agreement could be reached soon.

Brooks said the negotiators were concentrating now on verification procedures, or ways to ensure the terms of the treaty would be followed. He said he anticipated the new treaty would go to the Senate for ratification in February.

"There will be a lot of rhetoric, but I will be extremely surprised if the treaty isn't ratified," he said at a seminar held by the Arms Control Association.

(This version CORRECTS the name of Russian President Dmitry Medvedev.)

Itar-Tass: US, RF generally coordinate doc to replace START-1 -Dept of State

http://www.itar-tass.com/eng/level2.html?NewsID=14624623&PageNum=0

10.12.2009, 02.40

WASHINGTON, December 10 (Itar-Tass) - The United States and Russia have coordinated the main part of the text of a new agreement that is to replace the Strategic Arms Reduction Treaty (START-1), spokesman for the US Department of State Ian Kelly said on Wednesday.

He noted that a considerable part of the text has been coordinated already, but the sides still have certain final questions that are to be settled. However, he did not specify any timeframe. He said he could not forecast when this will happen. However, it is important for the parties not to agree by a certain date, but to work out a good agreement.

The US State Department spokesman noted that the US negotiators have been very seriously working towards reaching an agreement and they still have the aim to complete the work by the end of this year. The US side’s priority is still getting a good agreement that would correspond to the American national interests. The US wants to have more predictability and stability in the relations with the RF in the nuclear sphere, it also counts on the clauses in the document that would guarantee an efficient verification process, Kelly said.

START is a bilateral treaty between the United States of America and the Union of Soviet Socialist Republics (USSR) on the Reduction and Limitation of Strategic Offensive Arms. The treaty was signed on 31 July 1991 and entered into force on 5 December 1994. The treaty was signed by the United States and the USSR, that barred its signatories from deploying more than 6,000 nuclear warheads atop a total of 1,600 ICBMs, submarine-launched ballistic missiles, and bombers. START negotiated the largest and most complex arms control treaty in history, and its final implementation in late 2001 resulted in the removal of about 80 percent of all strategic nuclear weapons then in existence. Proposed by United States President Ronald Reagan, it was renamed START I after negotiations began on the second START treaty, which became START II.

The treaty was set to expire on 5 December 2009, but currently remains in force indefinitely pending agreement on a successor, since Russia and the United States failed to reach agreement on a new pact until the deadline.

The first START proposal was presented by United States President Ronald Reagan in Geneva on 29 June 1982. Reagan proposed a dramatic reduction in strategic forces in two phases, which he referred to as SALT III at the time. The first phase would reduce overall warhead counts on any missile type to 5,000, with an additional limit of 2,500 on ICBMs. Additionally, a total of 850 ICBMs would be allowed, with a limit of 110 “heavy throw” missiles like the SS-18, with additional limits on the total “throw weight” of the missiles as well. The second phase introduced similar limits on heavy bombers and their warheads, and other strategic systems as well.

At the time the US had a commanding lead in strategic bombers. The US B-52 force, while aged, was a credible strategic threat but was only equipped with AGM-86 cruise missiles, beginning in 1982, because of Soviet air defence improvements in early 1980s.

The US also had begun to introduce new B-1B Lancer quasi-stealth bomber and was secretly developing the Advanced Technology Bomber (ATB) project that would eventually result in the B-2 Spirit stealth bomber. The USSR's force was of little threat to the US, on the other hand, as it was tasked almost entirely with attacking US convoys in the Atlantic and land targets on the Eurasian landmass. Although the USSR had 1,200 medium and heavy bombers, only 150 of them (Tupolev Tu-95s and Myasishchev M-4s) could reach North America (the latter only with in-flight refuelling). They also faced difficult problems in penetrating admittedly smaller and poorly defended US airspace. Possessing too few bombers available when compared to US bomber numbers was evened out by the US forces having to penetrate the much larger and heavier defended Soviet airspace. This changed when new Tu-95MS and Tu-160 bombers appeared in 1984 equipped with first Soviet AS-15 cruise missiles. By limiting the phase-in as it was proposed, the US would be left with a strategic advantage, for a time.

With the current START-I set expired on December 5, 2009, there are proposals to renew and expand the treaty, supported by US President Barack Obama.

Russian President Dmitry Medvedev, said, the day after the US elections, in his first state of the nation address, that Russia would move to deploy short-range Iskander missile systems in the western exclave of Kaliningrad “to neutralize if necessary the anti-ballistic missile system in Europe.” Russia insists that any movement towards a new START should be a legally binding document, and must, then, set lower ceilings on the number of nuclear warheads, and their delivery vehicles.

On March 17, 2009, Medvedev signalled that Russia would begin a “large- scale” rearmament and renewal of Russia’s nuclear arsenal. President Medvedev accused NATO of pushing ahead with expansion near Russian borders and ordered that this rearmament commence in 2011 with increased army, naval, and nuclear capabilities.

The Georgian Times: Georgia-key issue of disagreement between Russia and U.S.http://www.geotimes.ge/index.php?m=home&newsid=19526Georgia remains the key issue of disagreement between Russia and the United States - Philip Gordon, assistant secretary of state for Europe and Eurasian affairs has said at the International Relations` Council, while the participants were discussing the U.S. relations with European countries.Philip Gordon said that the United States had not recognized and would never recognize Abkhazia and South Ossetia as independent states. He said the best way for the solution of these problems peacefully, was the development of Georgia as the stable and prosperous country. He pledges the support of the U.S. government to Georgia.`We have differences with Russian government over Georgia. That is good example of how we can try to work constructively with Russia in the areas were we have common interests, but not hesitate to tell them that we have differences over Georgia. They have recognized Abkhazia and South Ossetia and we have clearly told them that we not only have not done that but we`ll never do that and we will expend significant efforts to make

sure others not do it either if Russia expenses significant efforts in persuading others to do so, and so far Russia has not succeeded in that. The vast majority of countries around the world with only two exceptions have not recognized them and I hope they won`t recognize Abkhazia and South Ossetia as independent countries. We continue to persuade Russia to allow humanitarian access into both regions. We regret that the OSCE presence in South Ossetia was not able to stay,` Philip Gordon said. Rustavi2 2009.12.10 11:24

RIA: Russia, Belarus to discuss strategic partnership in Moscowhttp://en.rian.ru/russia/20091210/157180594.html

07:4010/12/2009

Russia and Belarus will discuss on Thursday further cooperation in energy, trade and military spheres at a session of the ruling body of the union state the two ex-Soviet neighbors are trying to build, a Kremlin source said.

The meeting of the union state's Supreme State Council is expected to result in the signing of a number of documents, including a program on coordinated actions in the sphere of foreign policy and a treaty on the development of military-technical cooperation.

Russian President Dmitry Medvedev and Belarusian leader Alexander Lukashenko will hold a private meeting prior to the council's session "to focus on further strengthening of the economic foundation of the Russia-Belarus integration especially in the light of a recent agreement between Russia, Belarus and Kazakhstan to launch the work of a customs union on January 1, 2010."

The source said the session will also adopt the union state's budget for 2010 in the amount of 4.87 billion rubles (about $161 million). The Russian share in the budget is 65%.

"Overall, the upcoming meeting is aimed at emphasizing the strategic nature of the mutually-beneficial partnership between Russia and Belarus and giving an additional boost to its development," the Kremlin official said.

Russia and Belarus have sought to form a union to ensure greater political, economic and social integration since 1996, but the process has stalled over a series of disputes.

However, both countries have recently reaffirmed their efforts to adhere to the founding principles of the Union State and move forward "in the interests of the well-being of Russia and Belarus."

The Russian president pledged in November a 30-40% discount on natural gas for Belarus in 2010, while Prime Minister Vladimir Putin said last week that a cut in energy prices for Belarus should coincide with Minsk's integration into the Union State with Russia.

Belarusian leader Lukashenko said on December 8 that Russia and Belarus had been successfully strengthening defense and security and formulating common positions on international issues, and had achieved high levels of mutually advantageous cooperation in production and research over the past decade.

MOSCOW, December 10 (RIA Novosti)

BarentsObserver: Still no official confirmation on failed missile launchhttp://www.barentsobserver.com/still-no-official-confirmation-on-failed-missile-launch.4663955-116320.html

2009-12-10 Russia has yet not officially confirmed or denied that it was a failed Bulava missile launch that caused the strange spiral shaped lights over Northern Norway yesterday.

Leading Russian media claim that the strange light phenomenon that could be seen from large parts of Northern Norway yesterday morning in fact was a result of a failed missile launch from the White Sea, but have so far not been able to get any official confirmation on the theory.

A source in the military-industrial complex told newspaper Vedomosti that Russia yesterday conducted the 13. test launch of a Bulava missile, and that the launch was partially successful. The first two stages of the missile functioned well, but problems occurred with the third stage. In the earlier failed launches, problems occurred already at the first stage of the missile, the newspaper reports.

According to newspaper Kommersant, both the Russian Ministry of Defense, the Navy Headquarters and the Federal Space agency reject confirming even that a test launch did take place yesterday.

A source in the administration in the town of Severodvinsk, where the submarine used as platform for testing of the Bulava missiles is based, told Kommersant that the strategic nuclear submarine “Dmitri Donskoy”, the only sub capable of conducting such tests, left base on Monday for test launches from the sea.

As BarentsObserver reported yesterday, several Norwegian space and defense experts believe that the giant spiral shaped light that could be seen in the eastern sky for several minutes on Wednesday morning was caused by a failed missile launch from the White Sea.

The Bulava missile test Wednesday morning has been rescheduled several times. Last Bulava test from the submarine "Dmitri Donskoy" was on July 15. That test failed and the missile self-destructed soon after launch due to a defective steering system in its first stage. Next test-launch was slated for November 24, as reported by BarentsObserver, but was then postponded.

Watch 3D simulation of a possible explanation of the spiral shaped light on YouTube

AFP: New Russian missile fails again in test: reportsPublished: Thursday December 10, 2009

http://rawstory.com/news/afp/New_Russian_missile_fails_again_in__12102009.html

The new nuclear-capable missile central to Russia's plan to revamp its ageing weapons arsenal has suffered a new failure in testing, in a major blow for the armed forces, reports said Thursday.

The submarine-launched Bulava missile was test-fired from the Dmitry Donskoi submarine in the White Sea early Wednesday but failed at the third stage, the Kommersant and Vedomosti newspapers reported, quoting defence sources.

No further details on the circumstances of the launch were available.

The test was the 13th test-firing of the Bulava and the ninth time that the launch has failed, Vedomosti said.

However the Russian defence ministry declined to comment on the failure or even confirm that the test launch of the intercontinental missile had taken place, the reports added.

The problems with the Bulava have become an agonizing issue for the defence ministry which has ploughed a large proportion of its procurement budget into ensuring the missile becomes the key element of its revamped rocket forces.

The previous failure in July had forced the resignation of Yury Solomonov, the director of the Moscow Institute of Thermal Technology which is responsible for developing the missile.

The problems are also a major political embarrassment coming at the same time as Russia is still negotiating with the United States the parameters of a new arms reduction treaty to replace the 1991 START accord.

The treaty expired on December 5 and despite intense negotiations the two sides have yet to announce agreement on the text of a new agreement.

The Bulava, which can be equipped with up to 10 individually targeted nuclear warheads, has a maximum range of 8,000 kilometres (5,000 miles).

It is the sea-based version of the Topol-M, Russia's new surface-to-surface intercontinental missile, and designed to be launched from Moscow's newest Borei class of submarines.

Dec 10, 2009

The Straits Times: Russian missile test fails again http://www.straitstimes.com/BreakingNews/World/Story/STIStory_464889.html

MOSCOW - Russia's new nuclear-capable Bulava missile has suffered a new failure in testing which was the likely source of a mysterious light that appeared over Norway, Russian newspaper reports said Thursday.

The submarine-launched Bulava missile was test-fired from the Dmitry Donskoi submarine in the White Sea early Wednesday but failed at the third stage, the Kommersant and Vedomosti newspapers reported, quoting defence sources.

The test was the 13th test-firing of the Bulava and the ninth time that the launch has failed, Vedomosti said. The missile is central to Russia's plan to revamp its ageing weapons arsenal but is struggling with development problems.

Kommersant said the reported test-firing before dawn on Wednesday morning coincided with the appearance of an extraordinary light over northern Norway that captivated observers. Images of the white light that appeared in the sky above the Norwegian city of Tromso prompted explanations ranging from a meteor, northern lights, a failed missile or even a UFO.

The problems with the Bulava have become an agonising issue for the defence ministry which has ploughed a large proportion of its procurement budget into ensuring the missile becomes the key element of its revamped rocket forces.

The previous failure in July had forced the resignation of Yury Solomonov, the director of the Moscow Institute of Thermal Technology which is responsible for developing the missile. – AFP

BarentsObserver launches BorderZone portalhttp://www.barentsobserver.com/barentsobserver-launches-borderzone-portal.4663902-99350.html

2009-12-10 Are you curious about the Norwegian-Russian borderland? BarentsObserver now launches its BorderZone project, a web portal with comprehensive news, contact data and practical information from the two neighboring municipalities of Sør-Varanger and Pechenga.

The new portal offers extensive contact information to shops, offices, business, organizations, media, schools, culture organization, places to eat, hotels and much more. It is also offers a comprehensive introduction to cross-border travelling, visa issues and transport, and keeps you updated with news information from the area.

The BorderZone website is located at the address:www.barentsobserver.com/borderzone

The two municipalities of Sør-Varanger and Pechenga are neighbors across the 196 km long Norwegian-Russian border. For decades, Cold War tensions made cross-border contact between people in the area almost impossible. The 1990s saw a major increase in cross-border travelling. Still, contacts between Sør-Varanger and Pechenga even today remains at a modest level.

The new portal is made to facilitate cross-border knowledge and contacts between people living in the borderland area. It is however also a useful tool for other people interested in the area, be it business people, officials, researchers or other.

The BorderZone website is established with project support from the Norwegian Barents Secretariat.

Itar-Tass: RF-Dutch intergovt comsn meeting to be held in May 2010-Zubkov

http://www.itar-tass.com/eng/level2.html?NewsID=14624739&PageNum=0

10.12.2009, 05.22

THE HAGUE, December 10 (Itar-Tass) - Te Russia-Netherlands joint commission for economic cooperation will hold its regular meeting in Holland in late May 2010, Russian First Deputy Prime Minister Viktor Zubkov told Itar-Tass in an exclusive interview summarising the results of his working visit to the Netherlands.

On Wednesday, Zubkov met here Dutch Prime Minister Jan Peter Balkenende, his Dutch colleague in the intergovernmental commission – Economics Minister Maria van der Hoeven, heads of companies of the Project Delta group and visited a high technology centre of the Philips company.

According to Zubkov, the commission’s May 2010 meeting will be preceded by meetings of working groups on separate fields. Besides, at a meeting with Hoeven the parties agreed to hold next March-April a joint working meeting on cooperation in the oil and natural gas sphere. It will be held in a northern region of Russia with invitation of Dutch companies that have displayed interest in cooperation in this economy sphere, he said.

Bloomberg: China Imposes Duties on U.S., Russian Steel Imports (Update1)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aMJdy3k_HJdg

By Bloomberg News

Dec. 10 (Bloomberg) -- China, the world’s largest steel consumer, will impose provisional duties on some U.S. and Russian imports following anti-dumping and subsidy investigations, escalating a trade spat started in September.

Flat-rolled electrical steel products from steelmakers including AK Steel Holding Corp., OAO Novolipetsk Steel and Allegheny Ludlum Corp., would attract duties of as much as 25 percent from tomorrow, China’s commerce ministry said in two statements on its Web site today. The steel is used to make power transformers.

China is striking back after the U.S., the European Union and other countries slapped tariffs and filed complaints about Chinese steel and commodity products to the World Trade Organization this year. U.S. and Russia last year exported a combined $602 million of the targeted steel products to China, according to Mysteel Research Institute.

“Dumping allegations can’t always be made from one side,” Xu Xiangchun, an analyst at Mysteel, said from Beijing. “U.S. and Russian imports have hurt Baosteel Group Corp. and Wuhan Iron & Steel Group, the only two producers of transformer steel in China.”

The tariffs come after U.S. President Obama in a visit to Beijing last month pledged with China President Hu Jintao to work on easing trade frictions. Obama imposed tariffs on Chinese tires in September, and the U.S. later levied duties on some Chinese steel pipes. The two countries have $409 billion in annual two-way trade.

First Probe

Baoshan Iron & Steel Co., the listed unit of Baosteel, fell 1.3 percent to close at 9.12 yuan in Shanghai. Wuhan Iron & Steel Co., gained 3 percent to 8.57 yuan, also in Shanghai.

Richard Buangan, press officer at the U.S. Embassy in Beijing, declined to comment. Calls to the Russian embassy’s press office were answered. Baoshan Steel’s Vice President Chen Ying wasn’t immediately available for comment. Calls to Wuhan Steel were not answered.

U.S. steel products will face two duties, one for subsidies and the other for dumping, the Chinese ministry said in its statement. Russian companies will only pay tariffs for anti- dumping, it said. A final ruling will be decided later, the ministry said, without giving a time frame.

“This is the first time China has conducted an anti- subsidy and anti-dumping investigation,” the ministry said. The imports have hurt the Chinese steel industry, it said.

Disputes between China and its trading partners are escalating as the worst economic crisis since the Great Depression spurred countries to protect jobs. China protested U.S. duties of as much as 99 percent on $3.2 billion of Chinese steel pipe exports on Nov. 6, and announced the start of an anti-dumping probe into American carmakers.

The Chinese commerce ministry in October made a preliminary ruling that U.S., European, Russian and Taiwanese chemical companies had dumped nylon fibers at below-cost prices in the Chinese market. Nylon is used in to make textiles and toothbrushes.

--Xiao Yu. With assistance from Li Yanping. Editors: Tan Hwee Ann, Jacob Lloyd-Smith

To contact the Bloomberg News Staff of this story: Xiao Yu in Beijing at yxiao@bloomberg.net

Last Updated: December 10, 2009 02:35 EST

ANA-MPA.gr: Deputy FM Kouvelis on Greek-Russian bilateral cooperationhttp://www.ana-mpa.gr/anaweb/user/showplain?maindoc=8223384&service=142

   Deputy Foreign Minister Spyros Kouvelis, speaking at the end of the Joint Greek-Russian Interministerial Committee session on Wednesday, stressed the determination of Greece and Russia to strengthen bilateral cooperation in many sectors, from which many Greek businesses will benefit in a period of economic crisis.   The discussion started with energy cooperation and special emphasis was placed on the Burgas-Alexandroupoli pipeline.   The Greek side once again confirmed its interest in the speedy and effective implementation of the project, that is also of great interest for the country's energy planning, as Kouvelis said after the discussion.   Also discussed was cooperation for the development of the South Stream natural gas pipeline, the renewal of the cooperation agreement on the supply of natural gas after the end of 2010 for 2016, as well as cooperation between Greece and Russia on green technology issues and the saving of energy.

Emportal.rs: Greece, Russia boost transport tieshttp://www.emportal.rs/en/news/region/106958.html

10. December 2009. | 07:30

Source: ANA

Visiting Russian transport minister Igor Levitin and Greece's minister of infrastructure transport and networks Dimitris Reppas on Wednesday discussed

further development of bilateral cooperation in the sectors of road, rail and air transports.

Visiting Russian transport minister Igor Levitin and Greece's minister of infrastructure transport and networks Dimitris Reppas on Wednesday discussed further development of bilateral cooperation in the sectors of road, rail and air transports.

Speaking to reporters after the meeting, Reppas noted the traditional good relations between Greece and Russia, and announced that a committee of experts of the two ministries has been set up which will have completed its work in 2010 aimed at the signing by the two ministers of a new agreement on road transports, which he said will boost the trade cooperation and economic relations between the two countries.

On air transports, the two ministers stressed their determination to improve the existing framework, aimed at boosting tourism movement between Greece and Russia.

Regarding rail transports, Reppas did not rule out the prospect of a Thessaloniki-Moscow route being established within 2010, with a frequency of two routes weekly.

Levitin, in turn, described his talks in Athens as very satisfactory, stressing that the dialogue on the transports sector will continue, adding that there is a series of topics that could be advanced so as to facilitate the work of the transport companies of both countries.

PressTV.ir: Kiriyenko: Bushehr plant ready next yearhttp://www.presstv.ir/detail.aspx?id=113334&sectionid=351020104

Wed, 09 Dec 2009 23:22:47 GMTSergei Kiriyenko, General-Director of Russia's state nuclear corporation Rosatom, has declared that Iran's Bushehr nuclear power plant will come on stream next year.

Russian Prime Minister Vladimir Putin and Kiriyenko discussed Rosatom's cooperation with Russian and foreign partners and the corporation's development plans for 2010 in a meeting on Wednesday.

"Next year we will commission the Bushehr plant in Iran; we are at the final stage there, and are assembling equipment," Kiriyenko told Putin.

"In 2010 we plan to commission two power plants abroad. One of them is Bushehr and the other is the first unit of India's Kudankulam, which we plan to commission jointly with our Indian colleagues," the head of Rosatom added.

Western corporations began the construction of the Bushehr facility in the 1970s. However, following the 1979 Islamic Revolution in Iran, the Western companies reneged on their commitments and pulled out of the project due to political pressure from Washington.

Iran then turned to Russia to complete the project. In 1992, Tehran and Moscow signed a deal to complete the construction of the nuclear power plant.

The Bushehr plant was originally scheduled to be completed in 1999, but its start-up has been repeatedly delayed.

Reuters: Areva gets legal ruling over Siemens/Rosatom JVhttp://uk.reuters.com/article/idUKGEE5B81V820091209

Wed Dec 9, 2009 4:08pm GMT

* Areva/Siemens to complete mediation first

* Areva CEO says relations with Siemens amicable

PARIS, Dec 9 (Reuters) - Areva (CEPFi.PA: Quote, Profile, Research) said a court has blocked a nuclear power tie-up between Siemens (SIEGn.DE: Quote, Profile, Research) and Russia's Rosatom until the French and German companies complete mediation over their Areva NP joint venture.

Siemens, which sources say was unwilling to remain a minority shareholder, and Areva parted ways last January and have yet to agree a price for Areva to buy Siemens' 34 percent stake, which the French company values at around 2 billion euros ($2.95 billion).

The companies must also agree to settle a non-compete clause that prevents Siemens from setting up a rival operation before 2020. If mediation fails, both parties would likely turn to court to settle the terms of their divorce.

"We have obtained (a court ruling) that Siemens would not work with the Russians until the mediation is finished. Therefore, the joint venture of Rosatom and Siemens won't be tomorrow, if there is one," Anne Lauvergeon, the chief executive of Areva, said on Wednesday.

Lauvergeon, who was speaking before the foreign relations committee of the National Assembly, did not specify which court had issued the ruling. In January, Areva threatened former partner Siemens with possible legal action if the German group teamed up with the French nuclear reactor maker's Russian rival Rosatom.

Under the proposed venture, the German and Russian duo would have developed the Russian pressurized water reactor technology, a new-generation nuclear reactor that would compete with Areva's 1,650 megawatt Evolutionary Power Reactor.

Siemens and Rosatom were also looking to build new nuclear power plants and modernise existing plants, turning them into a direct rival of Areva, which is also

competing with Westinghouse Electric, a unit of Japan's Toshiba (6502.T: Quote, Profile, Research).

Areva said its contract with Siemens forbade the German company from competing against Areva until 2020.

Lauvergeon struck a conciliatory tone on Wednesday.

"We are conducting the mediation nicely. We are not angry at Siemens," she said. (Reporting by Nina Sovich, Marie Maitre, Benjamin Mallet; editing by Simon Jessop)

Novinite.com: Russia Offers Again Funding for Bulgaria's Nuclear Projecthttp://www.novinite.com/view_news.php?id=110909

Energy | December 10, 2009, Thursday

Russia's state nuclear company Rosatom has announced willingness to finance the multi-billion nuclear project in the Bulgarian Danube town of Belene, which has stalled over lack of funding.

“We are ready to sign an agreement with Bulgaria within days,” Rosatom General Director Sergey Kirienko said, as cited by Interfax.

This is Russia's second offer to pour money into Bulgaria's second nuclear plant Belene after Russian Prime Minister, Vladimir Putin, gave the green light to a EUR 3,8 B loan at the end of May.

Bulgaria's new government of the center-right GERB party has said however that it is not willing to provide any state guarantees for loans and is yet to decide whether to scrap or push ahead due to purely economic terms.

Bulgaria's previous Socialist-led cabinet picked German utility RWE for a 49-percent stake and contracted Russia's Atomstroyexport along with French Areva and Germany's Siemens to build the plant.

Belene's reactors are to be of the Russian VVER-1000 class, while the Western companies are providing instrumentation and control systems.

State power utility NEK has a majority stake in the plant.

RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on government to find new shareholders while it redefines the scope of investment it needs.

The new government, which has put Belene under review due to rising costs, plans to cut its shares in the project from 51% to 20-30%, which will still allow the country to keep its blocking quota.

Standartnews: Moscow Presents Amended Agreement on NPP Belenehttp://paper.standartnews.com/en/article.php?d=2009-12-10&article=31011

According to Rosatom head Sergey Kirienko, a Russian delegation arrives in Sofia today to present an amended agreement on the construction of NPP Belene. During a working meeting Mr. Kirienko has informed Russian PM Vladimir Putin that Rosatom has prepared an amended proposal to the Bulgarian government regarding the construction of the power plant. The amendments mostly concern the financing of the project - it has become clear that most probably the Russian party has found money to finance the realization of the project after the withdrawal of Germany's RWE. During their meeting, Mr. Kirienko has assured PM Putin that after his approval of the document, the Russian delegation for the intergovernmental commission, which convenes in Sofia on December 10-11, will try to reach a speedy agreement with the Bulgarian party on the issues concerning the implementation of NPP Belene project.The Bulgarian part still hasn't an official position on the issue. Yesterday the minister of economy, energy and tourism Traycho Traykov refused any comment regarding the work of the inter-governmental commission of Bulgaria and Russia. He only said that during the talks he was going to defend Bulgaria's national interests firmly. The press center of the ministry of economy didn't provide any information on the meetings either. For the first time the meeting will pass behind closed doors. It is expected minister Traykov to meet his Russian counterpart Sergey Shmatko, who will lead the Russian delegation to Sofia. Bulgarian ministry of economy officially informed on the arrival of Sergey Shmatko. However, there is no official information on the rest members of the delegation.Kristiyan Kosturkov

Focus: Finam, Russia: Bulgaria buries Burgas-Alexandroupolis and Russia is aware of ithttp://www.focus-fen.net/index.php?id=n202948

10 December 2009 | 10:21 | FOCUS News AgencyMoscow. Bulgaria will make a decision whether it will participate in Burgas-Alexandroupolis oil pipeline project after exploring the possible environmental effects. The exploration might take a year and half, said Prime Minister Boyko Borisov.After the change of the government Bulgaria reiterated several times it will reconsider its agreements with Russia concerning joint energy projects. Currently, Moscow and Sofia have three joint energy projects – Burgas-Alexandroupolis, South Stream and Belene NPP. All agreements on these projects were signed with the previous government. Despite the harsh words about all Russian energy projects, only Burgas-Alexandroupolis is subject to direct criticism, writes Russian Finam news website.“Up to now there are no specific claims to South Stream and Belene NPP. As to Burgas-Alexandroupolis, there are already concrete demands and they have to do with the environment. Nothing prevents Sofia from putting the same claims to the other two

projects because the gas pipeline and nuclear power plant potentially threaten the environment not less than the oil pipeline. The implementation of the oil pipeline has again been put off. It is possible that the environmental assessment will once again bury the project,” comments Alexander Shtok.

Itar-Tass: Russia CEC sending delegation to Abkhazia electionshttp://www.itar-tass.com/eng/level2.html?NewsID=14624481&PageNum=0

10.12.2009, 00.20

MOSCOW, December 10 (Itar-Tass) - Russia’s Central Election Commission (CEC) gives special attention to the Abkhazian presidential elections that will be held on December 12. Even membership of CEC delegation that will go to the republic testifies to this. “CEC head Vladimir Churov, his deputy Stanislav Vavilov, CEC members Yevgeny Kalyushin, Valery Kryukov and Siyabshakh Shapiyev will be working at the elections as observers,” secretary of the Russian CEC Nikolai Konkin told Itar-Tass on Wednesday.

He explained that Shapiyev will be simultaneously watching the progress of the Abkhazian presidential elections at a polling station organised in the Cherkessia republic. Besides, CEC member Vasily Volkov will perform observer functions at a polling station for the Abkhazian presidential election set up in Moscow.

A delegation of the State Duma lower house of Russia’s parliament led by the head of the house CIS affairs committee Alexei Ostrovsky and representatives of non-governmental organisations will also go to Abkhazia to monitor the elections.

On 12 December 2009 Abkhazia will hold its fourth Presidential election since the post of President of the Republic of Abkhazia was created in 1994. Incumbent president Sergei Bagapsh is running for a second term. He competes against 4 opposition candidates: former Vice President and Prime Minister Raul Khajimba, who came second behind Bagapsh in the 2004 Presidential election, and newcomers Beslan Butba, Zaur Ardzinba and Vitali Bganba. Khajimba has stated that he, Ardzinba and Butba would support each other should one of them reach the second round of the election.

According to the Law on the Election of the President of the Republic of Abkhazia, candidates for the Presidency have to: possess Abkhazian citizenship; be of Abkhaz nationality; be fluent in the Abkhaz language; be no younger than 35 and no older than 65 years of age; be eligible to vote; have permanently lived in Abkhazia for the last five years up to the election day; have an account in a credit institution officially registered in Abkhazia.

Prospective candidates had to be nominated between 13 October and 2 November 2009. This could be done either by an interest group, which had to present a list of signatures, or by a political party registered with the Central Election Commission. The only parties registered in this way were United Abkhazia, the Forum of the National Unity of

Abkhazia, the Party of the Economic Development of Abkhazia and the People’s Party. After the nomination period ended on 2 November, the Central Election Commission verified the signature lists and whether candidates satisfied the set requirements. To test the nominees' proficiency in Abkhaz, it established a language commission consisting of Aleksei Kaslandzia, Batal Khagush, Eva Tania, Adgur Skinkuba and Fatima Kvarchelia. Registration of the candidates had to be completed before 12 November and two days after their registration the Central Election Commission had to publish the list of nominees whose candidacy had been approved.

Five people were nominated for the presidency. On 5 November they successfully passed the Abkhaz language examination. Bagapsh and Khajimba were exempted from it as they had already passed a similar examination during the 2004 Presidential election, but they both volunteered to undergo it anyway. On 6 November, all five nominees were officially registered as candidates, and they received their certificates on 9 November.

Vitali Resh-ipa Bganba, doctor of Philosophy and Economics, with David Dasania as Vice Presidential candidate. Bganba was nominated by an interest group on 14 October.

Raul Jumka-ipa Khajimba, former Vice President, Prime Minister and Minister of Defence, with Vasilii Avidzba as Vice Presidential candidate. Khajimba was nominated by an interest group on 19 October. On 20 October Khajimba received the additional support of the Forum of the National Unity of Abkhazia, Aruaa and Akhatsa.

Beslan Butba, businessman and former member of the People's Assembly, with former Minister of the Interior Almasbei Kchach as Vice Presidential candidate. Butba was nominated on 23 October by the Party of the Economic Development of Abkhazia, which he leads. Butba received the additional support of Iakub Lakoba, head of the People's Party and a candidate in the two previous presidential elections, and Vitali Bigvava, representative of the youth organisation Apsilaa.

Sergei Uasyl-ipa Bagapsh, incumbent President, with Prime Minister Alyksandr Zolotinska-ipa Ankvab as Vice Presidential candidate. Bagapsh was nominated on 27 October by United Abkhazia. On 18 November Bagapsh received the additional support of the Communist Party.

Zaur Ardzinba, head of the Abkhazian state shipping company, with former head of the Ochamchira District Khripsom Jopua as Vice Presidential candidate. Ardzinba was nominated by an interest group on 29 October.

One person was nominated who subsequently withdrew his nomination:

Jamalik Aiba. Aiba was nominated by an interest group on 23 October. On 26 October the Central Election Commission reported that Aiba had withdrawn his nomination.

Sergei Bagapsh and Raul Khajimba already competed for the presidency in the 2004 Presidential election. That election was narrowly won by Bagapsh, but this was disputed

by Khajimba and his supporters. To end the severe crisis that followed Bagapsh and Khajimba reached an agreement under which Bagapsh became President and Khajimba Vice President. The arrangement was uneasy: Khajimba's Forum of the National Unity of Abkhazia remained in opposition and Khajimba on various occasions supported the opposition's criticism of government policy.

Today.az: Border and customs control in passenger trains en route Azerbaijan-Russia and Russia-Azerbaijan simplifiedhttp://www.today.az/news/society/58081.html

10 December 2009 [10:24] - Today.AzBorder and customs control in the passenger trains en route Azerbaijan-Russia and Russia-Azerbaijan have been simplified.It was announced at the event entitled “Improving customs and border control in the international passenger trains” in Yalama Border Checkpoint of Azerbaijan-Russia border.

It was mentioned the passengers will not lose time any more in the border and customs control.

The new system is applied to ensure fulfillment of convention on “Simplification of border procedures in international passenger trains”, comfort of the passengers, improve the work of the Yalama Border Checkpoint.

The control in the passenger trains en route Russia-Azerbaijan will begin at Yalama station and end at Khachmaz station.

A number of measures have been taken to strengthen control in border and customs checkpoint and improve the service.

24.kg: Known Russian political analyst attacked in Bishkekhttp://eng.24.kg/incidents/2009/12/10/9884.html

10/12-2009 07:39, Bishkek – News Agency “24.kg”

A well-known Russian political analyst, Alexander Knyazev, was attacked outside his house in Bishkek Wednesday night when he was coming back from work. As the victim told the October district police officers, four strangers of Asian appearance knocked him down as he was entering his house at about 19:30. They beat him severely and ran away with his laptop and a briefcase with documents.

This is the second attack against the expert, after the analogues one about a year ago.

“I have been long writing and saying things unpleasant for both authorities and opposition. Besides, I deeply deal with issues of the Russian compatriots, which may cause negative reaction of local nationalists and the Russian activists,” Knyazev said last year.

This time the doctor of political science as well believes his attack was triggered by his professional activity.

RIA: Analyst beaten in alleged political attack in Kyrgyzstanhttp://en.rian.ru/exsoviet/20091210/157183770.html

12:1710/12/2009

Assailants have beaten a Russian political analyst in the Kyrgyz capital of Bishkek in what he claims was a politically motivated attack, the interior ministry's press service said.

The attackers delivered several kidney punches and caused a head injury to Alexander Knyazev, head of the regional branch of the Moscow-based CIS Institute think tank. They also took his bag and laptop.

"The attack took place at about 19:30 local time [13:30 GMT] on Wednesday, near the victim's house. According to preliminary data, there were four attackers," the press service said.

Knyazev told RIA Novosti by phone that, in his opinion, the attack was politically motivated, as he often criticized Kygryz authorities. A year ago the analyst was attacked under similar circumstances.

His colleague, Andrei Grozin, said the attackers allegedly told Knyazev the attack was due to his "meddling in politics."

"This entails certain conclusions, but, I repeat, the matter should be investigated by relevant authorities," Grozin said.

BISHKEK/MOSCOW, December 10 (RIA Novosti)

The Moscow Times: Communists Give Support to Medvedev http://www.themoscowtimes.com/news/article/communists-give-support-to-medvedev/391211.html

10 December 2009By Alexander Bratersky

President Dmitry Medvedev found an unlikely ally Wednesday in Communist leader Gennady Zyuganov, who praised the president and criticized Prime Minister Vladimir Putin at a presentation of his own plan to modernize Russia.

Even the title of Zyuganov’s program, “Go Russia, Toward Socialism!” mirrored Medvedev’s “Go Russia!” article, which was released in September and served as the backbone for the president’s recent state-of-the-nation address calling for Russia to modernize.

“President Medvedev speaks about modernization, while Prime Minister Putin endorses conservatism,” Zyuganov told reporters as he sought to highlight political differences between the two leaders who say they run the country in tandem.

Zyuganov noted that Putin’s Cabinet and United Russia, chaired by Putin, had yet to draft a modernization program providing substance to Medvedev’s broad initiative. “The program of innovations offered by the president in the state-of-the-nation address has not been supported by the United Russia party and government,” he said.

The substance offered by the Communists’ modernization program includes abolishing the flat 13 percent income tax, boosting state support for agriculture, nationalizing raw material industries and giving tax holidays to medium-sized businesses.

Zyuganov said he agreed with Medvedev’s call to disband state corporations, which were created during Putin’s presidency and do not have to follow the same rules as other companies.

“President Medvedev said state corporations work ineffectively, but the prime minister provides cover for this ineffectiveness,” Zyuganov said.

He urged the State Council, a policymaking group comprised of federal government officials, governors and lawmakers and chaired by Medvedev, to review the Communists’ program at its next session in January.

Zyuganov used a book of comic strips to present the program during a news conference at the offices of Interfax.

While Zyuganov has grown increasingly critical of Putin during the economic crisis, he has taken a softer stance toward Medvedev in what analysts said could be a sign that the Communists prefer Medvedev in the ruling tandem. “I am not saying the Communists will make Medvedev their leader, but they will take each other’s interests into account” in the next State Duma elections, said Alexei Mukhin, an analyst with the Center for Political Information.

Mukhin said the Communist Party was the only major political group left for Medvedev because the others were controlled by Putin and his retinue.

Zyuganov denied on Wednesday that his party would merge with A Just Russia, an idea proposed by A Just Russia leader and Federation Council Speaker Sergei Mironov earlier this week.

Bloomberg: Russia May Amend Law Deterring Foreign Mine Investors (Update1)http://www.bloomberg.com/apps/news?pid=20601109&sid=akCdfKaKXH8Q

By Ilya Khrennikov

Dec. 10 (Bloomberg) -- Russia is considering an easing of mining laws designed to protect domestic producers because they’re deterring foreign investors and curbing development, Deputy Minister of Natural Resources Sergei Donskoy said.

The government may streamline the approval process for foreign investors, give them tax breaks and increase compensation should the state decide to take back assets.

“We have proposed the government amend the legislation,” Donskoy said in an interview. “We realize that the new laws are hampering exploration.”

Exxon Mobil Corp., the largest U.S. oil company, and Canada’s Barrick Gold Corp., the world’s biggest miner of the metal, have said the so-called strategic deposit legislation risks damaging Russia’s economy to protect local companies as they compete for the country’s mineral wealth.

“The thing with strategic deposit laws is that they are scaring off other investors who were considering coming to Russia,” said Sergei Lobov, manager of Barrick’s Fedorova Tundra project in the country’s northwest, which has been delayed by the legislation.

The laws, which came into force in May 2008, cover deposits deemed to be “strategic.” They include resources of more than 50 metric tons of gold, 70 million tons of oil and 500,000 tons of copper. Developers need permission from authorities including the Federal Security Service, formerly known as the KGB, and Prime Minister Vladimir Putin.

Shell, BP

Russia adopted the rules to clarify procedures after the state forcibly gained control of Royal Dutch Shell Plc’s Sakhalin venture in 2006 and threatened to revoke licenses to TNK-BP’s Kovykta gas field in 2007.

“It was timely in 2007 and early 2008 when prices for deposits peaked,” said Mikhail Leskov, a partner at NBLgold, a Moscow-based consultant advising mining companies including Petropavlovsk Plc. “Now, as the market plunged, it looks like this legislation limits exploration and drags Russia’s mining industry behind international competitors.”

The state can take back a deposit from developers and pay their costs plus a premium of 30 to 50 percent. Critics say that deters investors because it ignores the value exploration companies can add to a deposit by proving reserves.

“Companies may fail to prove large reserves at a field, or they may succeed,” said Lou Naumovski, a vice president at Toronto-based Kinross Gold Corp. “Limiting the amount of return for high-risk exploration ventures makes little sense, as companies are more likely not to bother exploring if they see a limitation on the potential returns for their efforts.”

‘Halfway Measures’

The Ministry of Natural Resources is proposing to gauge the market value of deposits where licenses have been withdrawn and pay investors half that amount, Donskoy said in a Nov. 10 interview in his office in Moscow.

“No government body is acting independently in Russia” said Konstantin Simonov, the head of Moscow-based National Energy Security Fund, an independent consultant. “The ministry obviously reacts to signals sent by Vladimir Putin, who said earlier this year the bureaucratic procedures should be streamlined for foreign investments.”

The ministry’s proposed changes are “all halfway measures,” said Valery Braiko, the former head of the Soviet Union’s largest gold-producing unit who now heads the Russian Gold Producers’ Union. The group is lobbying for the ministry to raise the threshold for strategic gold deposits to 200 tons.

Gold Mines

The current 50-ton threshold “means investors need to get this multi-stage approval at as high a level as Putin to develop a pretty small deposit,” Braiko said. “It’s ridiculous.”

Some foreign companies have succeeded in bringing projects into production. London-based Petropavlovsk mines gold in eastern Russia and said last month an expansion was ahead of schedule at its Pioneer pit. Kinross started output at the Kupol mine last year, becoming the largest gold producer in Russia after Moscow-based OAO Polyus Gold.

Barrick has made less progress and is still renegotiating the right to build its Fedorova mine, having previously been granted an exploration and development license. Robin Young, the chief executive officer of Amur Minerals Corp., a London-based miner, said his company faces the same situation with its own Russian project.

Other companies quit Russia altogether. Zoloto Resources Ltd., a Canadian gold explorer, stopped investing in the country last year after the laws were passed, company spokeswoman Yana Bobrovskaya said.

De Beers

De Beers, the world’s largest diamond company, withdrew from a mining joint venture in January after talks with the Federal Anti-Monopoly Service about the processing of gems in Russia, said Tom Beardmore-Gray, a spokesman for De Beers’ former joint Venture partner Archangel Diamond Corp. Lynette Gould, a spokeswoman for De Beers, declined to comment.

Russia has the world’s largest reserves of gold deposits, after South Africa and the U.S. Russia’s production gained 15 percent to 151 tons in the first nine months of 2009, according to the producers’ union, driven by output from Kinross and Petropavlovsk. Supply will decline in the “medium term” after smaller foreign miners fled Russia, Vitaly Nesis, the CEO of Russian precious metals producer OAO Polymetal, said in October.

“Russia obviously has a right to protect its national interests and give some preference to domestic miners,” Naumovski said. “Looking from another angle though, Russia is competing with other countries for investments in its resource sector and may lose this competition unless it considers amending the strategic law.”

Gold was little changed at $1,127.88 an ounce at 8:53 a.m. in London. Barrick shares rose 38 cents, or 1.4 percent, to 27.90 euros in Frankfurt trading.

To contact the reporter on this story: Ilya Khrennikov in Moscow ikhrennikov@bloomberg.net

Last Updated: December 10, 2009 04:03 EST

The Moscow Times: Far East Investments Aim at Asian Market http://www.themoscowtimes.com/business/article/far-east-investments-aim-at-asian-market/391188.html

10 December 2009By Maria Antonova

Russian Railways subsidiary Rusagrotrans plans to invest in a grain terminal to boost exports to Asian markets, but it may face competition from similar projects initiated by Japanese investors interested in Russian grain.

Rusagrotrans is looking at ports in Vanino, Zarubino and Vladivostok, and estimates the terminal “including sea components, rail infrastructure and elevator” to cost $10 million, Rusagrotrans deputy CEO Oleg Rogachyov said, Interfax reported. It was not clear how much the company was willing to contribute or who would become its partners.

A terminal with capacity of 1.5 million to 3 million metric tons per year would be optimal in the Far East, Rogachyov said.

Another grain terminal could be constructed in Slavyanka, a port in the Primorye region, by Berkut and Japanese firm Link Far East. The terminal will be operated by a joint venture of the two companies, which will invest “several million dollars” into the project, Berkut head Viktor Pokotilov said. The joint venture will be created after Dec. 20.

Siberian Agricultural Holding and Mitsui & Co. are also considering investing up to 20 million euros ($29.5 million) in a terminal, Interfax reported.

Rusagrotrans and the Unified Grain Company signed a strategic partnership agreement in October as part of Russia’s goal to modernize the grain industry and increase its export capacity. To raise exports to 40 million tons a year, Russia needs to invest 100 billion rubles ($3.2 billion) into infrastructure before 2015, Rusagrotrans said in a report published in mid-October. A total of 61 billion rubles should be spent on building grain elevators, 20 billion rubles on train cars and 19 billion rubles on two new ports, the company said.

There is currently a grain glut in Russia, but export capability is limited by outdated and insufficient logistical infrastructure, said Viktor Karnushin, head of the Lipetsk branch of the Agro-Invest holding. “The Asian market is one of the most attractive right now,” he said. “But shipping grain to the Far East across the entire country using our rail network may be problematic.”

Poor transportation, a deficit of long-term storage capacity, and an absence of deep-water ports are the biggest problems in the grain market infrastructure, said Maxim Klyagin, an analyst with Finam Management.

The Unified Grain Company is asking for 45 billion rubles to develop infrastructure, “including to create a far eastern corridor for delivering grain to Southeast Asian countries,” president Arkady Zlochevsky said in Sochi on Wednesday.

The company’s strategy has been approved by the Agriculture Ministry and is currently in the process of being approved by the Economic Development Ministry, said Aram Gukasyan, the firm’s deputy head.

Itar-Tass: Chukotka reports biggest cost of food basket in Russiahttp://www.itar-tass.com/eng/level2.html?NewsID=14624851&PageNum=0

09.12.2009, 23.39

ANADYR, December 9 (Itar-Tass) -- The cost of the minimum food basket (includes 33 items) in the Chukchi Autonomous District is the biggest in Russia and has amounted to 6,540.7 roubles (USD 1 = RUB 30.75) up to date.

The regional statistics department has already received the first results of Tuesday’s inspection of several food stores in the autonomous district. It was the 12th inspection this year.

Inspectors paid special attention to 429 food items sold in Chukotka’s major cities – Anadyr and Bilibino.

The increase in prices was the highest for potato and amounted to 43 percent to 63 roubles per kilogram, as compared to 44 roubles per kilogram in 2008.

The inspection showed that the price of cabbage had not changed and totalled 65 roubles per kilogram.

Prices of wheat bread and milk had grown at the same pace and amounted to 66 roubles.

The average price of sausages is 500 roubles per kilogram.

Prices of oranges and bananas exceed 200 roubles.

Specialists of the statistics department will analyze how the price of the basic foodstuffs has changed, Chief Expert of the Price and Finance Department at the Chukotka administration Irina Sinelnik said.

They will sum up the results of the monthly inspections to derive the cost-of-life indicator in the autonomous district.

Interfax: Perm nightclub fire death toll rises to 131http://www.interfax.com/newsinf.asp?id=135077

PERM. Dec 10 (Interfax) - The number of people killed by a fire at The Lame Horse nightclub in Perm early on December 5 has reached 131, the Perm territorial administration told Interfax on Thursday.

Two people recently died at Moscow hospitals and one more in a St. Petersburg hospital, it said.

A hundred other fire victims remain in hospital.

RIA: Attackers in Ingushetia miss military vehicle, hit private homehttp://en.rian.ru/russia/20091210/157181674.html

10:0610/12/2009ROSTOV-ON-DON, December 10 (RIA Novosti) - Militants in the southern Russian republic of Ingushetia bombed a private home instead of their intended target of a military vehicle, a local police spokesman said on Thursday.

The incident took place at about 6:00 p.m. Moscow time [15:00 GMT] on Wednesday. There were no reports of injuries or deaths from the attack.

The attackers using a grenade launcher initially targeted a UAZ vehicle carrying Russian Defense Ministry soldiers but missed and struck the roof of a private home.

"Nobody was injured there, a search for the criminals is underway," the spokesman said.

RFERL: Russian Police Search Apartment Of Opposition Activists http://www.rferl.org/content/Russian_Police_Search_Apartment_Of_Opposition_Activists/1900074.html

December 10, 2009 The Moscow apartments of opposition activists Aleksandr Averin and Sergei Fomchenkov have been searched by police, RFE/RL's Russian Service reports.

Averin and Fomchenkov are executive committee members of the opposition coalition Other Russia and are on the election committee that supports Eduard Limonov, a leader of Other Russia who plans to take part in the 2012 presidential election.

Averin told RFE/RL that police searched his apartment for about two hours on December 9 and confiscated his computer's hard drive and Limonov campaign literature.

Averin said the search by police may have been a "warning" from officials as the coalition prepares for a December 31 protest in Moscow.

Limonov told RFE/RL that unless the authorities give a full explanation for their actions the opposition will consider the search "an act of repressive lawlessness."

The Moscow Times: From Megatons to Megawatts http://www.themoscowtimes.com/opinion/article/from-megatons-to-megawatts/391187.html

10 December 2009By Gregory Austin and Danila Bochkarev

Russian nuclear fuel is keeping the lights on in California’s homes supplied by the Avila Beach and San Clemente nuclear power plants. Just less than 20 percent of all of the U.S. state’s electricity production comes from nuclear power. But California is not the only

state in which Russian nuclear fuel is being widely used for power generation. According to the U.S. Energy Department, in 2007 about 40 percent of nuclear fuel used by the U.S. nuclear power sector came from Russia. In May, Chicago-based Exelon and other U.S. utilities signed a key new agreement with Moscow-based Techsnabexport, or TENEX, allowing direct commercial sales of Russian nuclear fuel to the U.S. market. Previously, U.S. anti-dumping laws only allowed the selling of the uranium recovered from dismantled Soviet nuclear weapons.

Presidents Barack Obama and Dmitry Medvedev confirmed their commitment to resetting the U.S.-Russian strategic partnership during the Moscow summit in July. A good place to jump-start this process is by strengthening cooperation in the nuclear power sector.

Russia and the United States should take a joint leadership role in supporting the global nuclear industry and managing a safer “nuclear renaissance.” For example, both countries should work more closely together to establish an international nuclear fuel bank. A fuel bank based on the proliferation-resistant, closed fuel-cycle solution for civil nuclear energy is a point on which both countries can agree. Moreover, both sides can bring to the partnership valuable expertise in nuclear power generation.

The United States and Russia should build on these foundations by promoting technical cooperation between their respective civil nuclear industries. This would significantly advance their national energy security and bring tangible commercial benefits. Both countries would benefit from demonstrating stronger joint leadership to promote multilateral civil nuclear energy frameworks.

Aside from the benefits for energy security, bilateral cooperation in this field could also help to rejuvenate stalled U.S.-Russian dialogue on other matters of global strategic importance.

Unfortunately, the civil nuclear agenda has often been held hostage, especially under the past administration, to serious divergences between Moscow and Washington over larger global strategic issues, including Iran. There are profound differences in opinion between Russian and Western security experts and elites as to the range of cooperative possibilities in the nuclear energy relationship.

But there is reason for optimism as the stage is already set for closer cooperation between the United States and Russia. In an April 1 joint statement by the Group of Eight, the U.S. and Russian presidents called for further bilateral nuclear cooperation. “Together, we seek to secure nuclear weapons and materials, while promoting the safe use of nuclear energy for peaceful purposes,” Medvedev and Obama stressed in the statement.

The United States and Russia share a vision of a sustainable energy future less reliant on dwindling and environmentally damaging fossil fuels. A joint U.S.-Russian initiative on civil nuclear energy would be a step closer to this goal.

The two countries need to make commitments that go beyond their current strategies. For example, Washington and Moscow should resume the process of ratifying the United States-Russia Civil Nuclear Cooperation Agreement, also known as the 123 Agreement. In fact, ratification of the 123 Agreement is an indispensable precondition for conducting joint scientific experiments and developing a full-scale technological and commercial partnership.

Moscow and Washington should also create a bilateral intergovernmental commission to define technical parameters for civil nuclear cooperation and commit to a firm deadline — for example, by the end of 2010 — for making a joint proposal on an international fuel bank that effectively merges the existing national proposals.

They should also establish a firm framework for transferring affordable and proliferation-resistant technology to developing countries. This can be done through a multilateral nuclear technology knowledge bank based on public-private cooperation under the auspices of the International Atomic Energy Agency. Furthermore, the United States and Russia should use the knowledge bank to develop a set of political and business incentives that promote a clear and rapid move to new power-generation solutions, such as thermo-nuclear fusion.

Civil nuclear energy can play the same role for U.S.-Russian relations that coal and steel played for German-French relations after World War II. A nuclear energy partnership can foster technical cooperation on a practical, functional and nonpoliticized basis, while simultaneously promoting global security.

Gregory Austin is vice president of program development and rapid response and Danila Bochkarev is associate for energy security at the EastWest Institute. The views expressed are those of the authors and not necessarily those of the EastWest Institute, its staff or board.

Bloomberg: Hermitage Buys $4.8 Million Popoff Collection as Auction Flopshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aktHj.XVXXhg

By John Varoli

Dec. 10 (Bloomberg) -- Russia’s State Hermitage Museum last night bought 92 watercolor portraits valued at about 3 million pounds ($4.8 million) from the Paris-based Popoff Collection after the works failed to sell at auction earlier this year.

The St. Petersburg museum, one of the largest in the world, didn’t name the price it paid for the art that it acquired directly from Maurice Baruch, head of Galerie Popoff, one of the biggest Russian art collections in the West.

In October, Christie’s International in London offered about 100 watercolor portraits of the Imperial family and Russian aristocracy by artists such as Karl Briullov, Orest Kiprensky, Petr Sokolov and Vladimir Hau. Only five of these lots sold. The paintings

were valued by the London-based auction house at the time as worth between 2.5 million pounds and 3.5 million pounds.

“The 19th-century Russian watercolor portraits from the Popoff Collection are some of the most spectacular of their kind in the world,” Viktor Faibisovich, the Hermitage’s head of new acquisitions, said in a telephone interview.

Faibisovich said the artworks arrived at the Hermitage yesterday, and that plans are being made to display them at the museum at the end of this month.

The top work is Hau’s “Portrait of Natalia Pushhkina,” (1844), wife to Russian poet Alexander Pushkin. That work didn’t sell at Christie’s on a low estimate of 120,000 pounds.

Auction Flop

More than half of the 580 lots failed to sell across the entire collection as Christie’s raised 5.5 million pounds on a low estimate of 9.7 million pounds.

The top presale lot was a 1778 Berlin-made porcelain dinner set that was a gift from the Prussian ruler, Frederick II, to Russia’s heir-to-the-throne, Grand Duke Paul. It failed to sell on a low estimate of 200,000 pounds.

The Russian government, with assistance from private sponsors, paid for the Popoff purchase, said Faibisovich. The museum staff wouldn’t comment on whether it will buy the porcelain in the collection.

Alexandre Popoff, a Paris dealer who opened his gallery in 1920, benefited from refugees arriving in France from the Soviet Union. Some were aristocrats who had to sell their valuables. Popoff’s buyers later included the Duke and Duchess of Windsor; Mstislav Rostropovich, the Russian cellist; actress Greta Garbo and composer Leonard Bernstein.

To contact the writer on the story: John Varoli in St. Petersburg at jvaroli@gmail.com.

Last Updated: December 9, 2009 20:52 EST

Bloomberg: Magnitude 6.1 Earthquake Strikes Sea of Okhotsk, USGS Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5hWkdRIoeZ0

By Tim Smith

Dec. 10 (Bloomberg) -- An earthquake measuring 6.1 magnitude has struck the Sea of Okhotsk, 388 kilometers north- west of the Russian Kuril Islands, the U.S. Geological Survey reported on its Web site.

To contact the reporter on this story: Tim Smith in Sydney at tsmith58@bloomberg.net

Last Updated: December 9, 2009 21:51 EST

AMEinfo.com: Russia info agency to relaunch Arabic paperhttp://www.ameinfo.com/218425.html

Thursday, December 10 - 2009

The Russia Information Agency (RIA Novosti) has re-launched its monthly newspaper, Moscow News in Arabic in the Arab world, KUNA has reported. The re-launch of 'Anbaa Moscow' comes after 17-year-long break, as it is designed to improve Russia's dialogue with the Arab world, the newspaper's editor-in-chief Raed Jaber said. The paper will have a circulation of 150,000 copies in 15 Arab countries and Israel, 1,000 of which will be circulated in Russia.

National Economic Trends

RBC: Russia plans to start borrowing abroad in 2010

http://www.rbcnews.com/free/20091210115212.shtml

      RBC, 10.12.2009, Moscow 11:52:12.Russia's foreign borrowings will be under $18bn in 2010, Deputy Finance Minister of Russia Dmitry Pankin told the 7th Russian Bond Congress in St. Petersburg today. The official explained that it was difficult to give a more precise figure, as it would depend on oil prices. That said, in total in 2010-2012, the ministry planned to raise some $60bn in foreign financing.

      Regarding the terms of borrowings, it is more profitable for Russia to offer long-term securities, but with the decreased discount rate it would be unreasonable because of future budget expenses. Russia will not be ready to venture out to the international debt market until March 2010, when the legal environment is to be finalized, he noted. Russia has abstained from borrowing on the international market for 10 years, which has had a negative effect on its image because of insufficient contacts with investors.

Interfax: Russia to settle debt to London Club by end of the year – Pankinhttp://www.interfax.com/newsinf.asp?id=135100

ST. PETERSBURG. Dec 10 (Interfax) - By the end of 2009, Russia intends to settle debt owed to the London Club, Deputy Finance Minister Dmitry Pankin told journalists on Thursday.

"This is not a large amount. We hope to settle it by year's end," Pankin said.

He also confirmed plans to finish an exchange of USSR commercial debt by the end of the year.

Bloomberg: Russia to Sell Eurobonds No Earlier Than March, Pankin Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoeYdB5c5SFQ

By Anastasia Ustinova

Dec. 10 (Bloomberg) -- Russia will sell its first Eurobonds in a decade “no earlier” than March, Deputy Finance Minister Dmitry Pankin told reporters in St. Petersburg today.

To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at austinova@bloomberg.net

Last Updated: December 10, 2009 01:48 EST

Bloomberg: Russian 11-Month Budget Deficit Widens to 4.9% of GDP (Update2)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVpTAwZUyn98

By Alex Nicholson

Dec. 9 (Bloomberg) -- Russia’s budget deficit widened to 4.9 percent of gross domestic product at the end of November from 4.7 percent the previous month as the government spent 1.76 trillion rubles ($57.5 billion) more than it collected.

Revenue in the 11 months through November was 6.45 trillion rubles, or 96 percent of the income the government targets for 2009, while spending was 8.2 trillion rubles, or 82.6 percent of forecast expenditure, the Finance Ministry in Moscow said on its Web site today, citing preliminary figures.

Russia expects a budget shortfall for the first time in a decade after crude oil prices tumbled, curbing state income. The economy of the world’s biggest energy producer contracted the most on record in the second quarter, shrinking an annual 10.9 percent, and fell 8.9 percent in the third.

“Every year we underspend appallingly and in December we always see a sharp spike,” Anton Struchenevsky, an economist at Troika Dialog, Russia’s oldest investment bank, said by phone. That may lead to “considerable volatility” in the ruble’s exchange rate, he said.

At the same time, Struchenevsky said he doubted that the ruble would veer far from a rate of 35 to 36 against the dollar- euro basket which Bank Rossii uses to manage fluctuations that can hurt exporters.

Russian companies are due to make debt payments of about $19 billion this month, which may act as a counterweight to budget spending and “sterilize the extra ruble liquidity,” he said.

The ruble was 0.3 percent stronger against the dollar at 30.4620 at 3:43 p.m. in Moscow and 0.4 percent stronger against the euro at 44.9004. Those movements left it 0.4 percent stronger against the basket.

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net.

Last Updated: December 9, 2009 09:02 EST

RenCap: Inflation in the first week of December picks up from zero but remains historically lowhttp://www.businessneweurope.eu/dispatch_text10715

RencapDecember 10, 2009

Consumer prices were up 0.1% in the first week of December, after zero change in the last week of November. Last year, inflation in the first week of December was 0.2%. Current YtD inflation amounted to 8.5%. We think that, during the remaining three weeks of the year, cumulative inflation could barely exceed 9%.

In November, the main contributors to CPI were prices for all goods which added 0.4% MoM. Services prices in November demonstrated insignificant growth (0.1% MoM).

We think that the drivers for the December price increase are still the same: traditional for fruit, vegetables and milk products prices, thus we are unlikely to see zero weekly inflation until the end of the year. An expected acceleration of budget spending in December is not reducing inflationary pressure. However, it should not be excessive as a significant part of the corresponding budget deficit is going to be financed via domestic borrowing and a return of deposits from commercial banks.

We agree with Central Bank of Russia (CBR) inflation estimates of 0.5-0.6% MoM in December and estimate that the YoY price change adjusted for the devaluation effect at the start of the year would be below 6.0%. According to indirect indicators, the real sector did not demonstrate a strong performance in November again, so, we think the CBR has enough arguments for further loosening of monetary policy and we expect the CBR's key rates to be cut by another 25-50 bpts by the end of the year.

 12/10/2009 09:35 

Agrimarket.info: Russia to increase grain qualityhttp://www.agrimarket.info/showart.php?id=87183

In 2009, the harvest of grains in Russia confirmed the tendency of recent three years – the quality of Russian wheat continues growing, declared Vitaliy Smirnov, the head of the

department of agricultural products of INSPECTORATE R, during the conference “Grain of Russia-2009”. According to V.Smirnov, two reasons caused the appearance of such tendency: from the one hand, agricultural producers understood that high quality of grains provides high profitability. And from the other hand, regional authorities started stimulating grain producers for securing of grain quality through imposition of special measures for the reduction of sowing infestation with corn bug. According to V.Smirnov, Egypt introduced more severe requirements for wheat of Russian origin (standard 1601) compared to European standard. At the same time, not only Egypt started toughening requirements for quality of the imported grains, but also the traditional countries-importers of Russian grains: Oman, Yemen, Sudan. Turkey also increased own level of requirements for gluten quality. To date, the traditional buyers of Russian grains became more demanding in quality of the supplied grains. And Russian sellers and produces have to satisfy the requirements in order to save own markets.

Interfax: Russia raises import duty on rice by 70%http://www.interfax.com/newsinf.asp?id=135066

MOSCOW. Dec 10 (Interfax) - Starting from December 10, Russia has increased the working import duty on rice in order to support domestic rice producers, who posted a record harvest this year.

Russia's rice import duty will increase to 0.12 euro per kilogram beginning December 10, the Federal Customs Service said.

The export duty will be in effect for nine months.

This year the Grain Union forecasts the rice harvest will total about 1 million tonnes, which will provide about 500,000 tonnes of grain rice.

Russia's annual demand for rice is estimated at 600,000 tonnes. Just four year's ago domestic production was only sufficient to supply 30% of domestic demand.

Last year Russia harvested 738,300 tonnes of rice net weight, 4.8% more than the 704,500 tonnes harvested in 2007

PR-inside.com: Russia Agribusiness Report Q1 2010 - new report releasedhttp://www.pr-inside.com/print1625502.htm

2009-12-10 09:50:35 - Russia Agribusiness Report Q1 2010 - a new market research report on companiesandmarkets.com

www.companiesandmarkets.com/Summary-Market-Report/russia-agribus ..

The establishment of the United Grain Company (UGC) is a key part of Russia´s strategy to recover its status as an agricultural powerhouse, following the market reforms of the 1990s that resulted in large cuts to key industries. The country aims to increase its grain exports to 50mn tonnes per year by 2020. The UGC, yet to begin activities, is set to increase the purchasing and selling of grain on the domestic market, increase grain exports and modernise and construct new port terminals and storage silos. This and other factors have led the report to forecast 16.5% growth in wheat production and 49% growth in corn production from 2009 to 2014 in our Russia Agribusiness Q110 report.

We have updated our rice outlook to reflect milled production, rather than rough production as in previous Russia reports. The change will allow us to use the latest figures available, as well as bring the Russia report in line with those for other markets. Rice production is likely to fluctuate throughout the forecast period but the general trend will be upwards.

Meanwhile, meat consumption in Russia remains low by developed world standards. In 2008 according to data from the Food and Agricultural Policy Research Institute (FAPRI) per capita consumption of beef and chicken stood at 16.6kg and 19.8kg, less than half of that of the US. This leaves plenty of room for growth and, in common with many other emerging markets, we expect meat consumption in Russia to increase significantly over our forecast period to 2014.

The Russian government has stated its aim to become self-sufficient in pork and poultry by 2011. The goal is over-ambitious in BMI´s view, but we nevertheless see poultry production continuing to grow strongly to the end of our forecast period in 2014, building on the 170% expansion seen from 2003-2007.

Anti-import measures, state and regional government subsidies, as well as demand for cheaper animal protein have all boosted poultry production. Between 2009 and 2014 we forecast production to rise by 83% from 1.81mn tonnes to 3.31mn.

We see milk production rising by 10.0% from 2009 to reach 36.1mn tonnes in 2014. While still a far cry from the levels of the first couple of years of the 1990s, this modest growth forecast does at least inspire hope that the industry is starting on the long road to recovery. In October 2009, the Russian government added fluid milk, butter and three types of cheeses to a list of intervention commodities. While no interventions have yet taken place on these commodities, the possibility adds a new dynamic to the dairy industry. This and other key issues are discussed at more length in Russia Agribusiness Q110.

Business, Energy or Environmental regulations or discussions

RenCap: Government to sell its 25% stake in TGK5

http://www.businessneweurope.eu/dispatch_text10715RencapDecember 10, 2009

Event: RBC reported yesterday (9 Dec) that a 25% stake in TGK5, held by the state, has been included in a government list of assets identified for privatisation in 2010. Along with OGK5, TGK5 was divested from UES as a so-called pilot privatisation project and, unusually a significant state shareholding was retained. KES-Holding, who paid a price 3x higher than the current market price, bought a large new issue of TGK5 shares and currently has a 49% TGK5 stake. Elsewhere, Kommersant reported yesterday that the Federal Grid Company had declared invalid the sales of state stakes in TGK6 and TGK7 to KES-Holding, because of KES's failure to meet deferred deadlines for payment and is claiming fines from KES totalling RUB25.9bn ($850mn).

Action: Neutral for TGK5, in our view.

Rationale: Given an apparent shortage of funds to meet all its obligations, we believe KES-Holding will be forced to choose priorities in its generation empire and, in our view, will focus its resources on TGK5 and TGK9. We surmise that the government decision to press ahead with sale of the state's TGK5 stake before asset prices have fully recovered from the effects of the global crisis is driven by a need to comply with the 2003 Energy Act, which calls for the state to exit from direct ownership in the competitive generation sector. For us, KES-Holding is the obvious contender of the 25% TGK5 stake and we expect share price weakness in the near term.

RenCap: BTA Bank Russia proposes debt restructuring with high riskshttp://www.businessneweurope.eu/dispatch_text10715

RencapDecember 10, 2009

Yesterday (9 Dec) Russian BTA Bank announced a bond restructuring proposal for its $100mn CLN maturing in December. Despite the quite generous offer made by the bank, we still see very significant risks to a successful restructuring. We also note that the problems of the bank which drove it to restructuring its liabilities are not typical for Russian banks and are much closer to the Kazakh BTA Bank.

In brief, the proposal presumes an increase in notional amount of debt to 110% of par, of which 10% plus the 2.5% consent fee are due to be paid in January. The rest would be delayed in four equal quarterly arrears starting from June 2010.

We think the main risk related to the proposal is that it effectively puts the bondholders in a position subordinated to the Central Bank of Russia (CBR), to which BTA currently owes around RUB12bn ($400mn) and which has been rescheduled until April. BTA's current financial position looks extremely weak to us and we see the risk of the bank not making the payment to CBR on time as very high.

In our view, the key factor which brought BTA to this point is very similar to that of the Kazakh BTA - aggressive lending to the companies related to the shareholders. Currently, BTA is the institution with highest proportion of CBR funding (a liability of 39% as 30 Sep). We believe that given the nature of BTA's loan portfolio, it will be very difficult for the bank to collect RUB12bn of cash by April to repay the loans to CBR. If the bank is unable to make the repayment, we see the risk of the bankruptcy as quite high, which will significantly decrease the visibility of recovery for bondholders.

Reuters: Sberbank exec says RUSAL could list shares in Q1http://www.iii.co.uk/news/?type=afxnews&articleid=7665411&subject=general&action=article

MOSCOW, Dec 10 (Reuters) - Indebted Russian aluminium giant UC RUSAL could realise plans to float shares in Hong Kong in the first quarter of 2010, a senior official from potential investor Sberbank told reporters on Thursday. "If the IPO takes place, we intend to participate," said Bella Zlatkis, first deputy chief executive of Sberbank, Russia's largest lender."I hope, I think, it could take place in the first quarter."Zlatkis also said she saw no risks to Sberbank's participation in the IPO from a lawsuit brought against RUSAL's main owner, Oleg Deripaska, by former associate Michael Cherney."These risks don't frighten us. They don't exist for us. For us, the only risks are the usual risks you would have with any IPO -- market risks," Zlatkis said.(Reporting by Oksana Kobzeva, writing by Robin Paxton) Keywords: RUSAL SBERBANK/ (robin.paxton@reuters.com; +7 495 775 1242; Reuters Messaging: robin.paxton.reuters.com@reuters.net)

Reuters: Russia Sberbank may borrow abroad in H2 2010http://www.iii.co.uk/news/?type=afxnews&articleid=7665406&subject=companies&action=article

MOSCOW, Dec 10 (Reuters) - Sberbank, Russia's biggest lender, has no plans to return to the external debt market in the first half of 2010 but will consider it in the second half of the year, the bank's first deputy chief executive officer Bella Zlatkis told reporters on Thursday. She added that the state-controlled bank was unlikely to launch its planned depository receipt programme in the first quarter of 2010.

(Reporting by Oksana Kobzeva; Writing by Dmitry Sergeyev; editing by Toni Vorobyova) Keywords: RUSSIA SBERBANK/ (dmitry.sergeev@reuters.com; +7 495 775 1242; Reuters Messaging: dmitry.sergeev.reuters.com@reuters.net)

Reuters: RPT-UPDATE 1-Sberbank to still buy Eurozone sovereign securitieshttp://www.reuters.com/article/idUSGEE5B90E720091210

* May return to external borrowings in H2 2010

(Adds quotes, details)

MOSCOW, Dec 10 (Reuters) - Sberbank (SBER03.MM), Russia's biggest lender, will continue buying high-quality Eurozone sovereign securities to diversify its securities portfolio, a senior official at the bank told reporters on Thursday.

State-controlled Sberbank, whose securities portfolio grew by 42.6 percent to 704.1 billion roubles in January-September 2009, acquired sovereign securities of Eurozone countries for the first time in October.

"We buy only top-quality securities of developed countries. So far, these securities are with a maturity of up to three years," said Bella Zlatkis, Sberbank's first deputy chief executive. "We are able to buy securities with a longer maturity."

Sberbank expects 25 percent gains on its securities portfolio in 2009, Zlatkis said. "It was a successful year."

The bank's corporate bonds portfolio increased by 175.9 percent in the first nine months of 2009, while the proportion of OFZ state bonds in the securities portfolio decreased to 34.5 percent from 53.5 percent, the bank said in a report.

Sberbank so far has no plans to return to the external debt market in the first half of 2010, but would consider doing so in the second half of next year, Zlatkis said. (Reporting by Oksana Kobzeva; writing by Dmitry Sergeyev; editing by Karen Foster)

Reuters: Sberbank sees 25 pct gains on securities portfoliohttp://www.reuters.com/article/idUSGEE5B909I20091210

ST PETERSBURG, Dec 10 (Reuters) - Sberbank (SBER03.MM), Russia's biggest lender, expects 25 percent gains on its securities portfolio in 2009, the bank's first deputy chief executive officer told reporters on Thursday.

"It was a successful year," Bella Zlatkis said.

Sberbank's securities portfolio grew by 42.6 percent in volume in the first nine months of 2009, reaching 704.1 billion roubles ($22.9 billion), the bank said in a report for January-September 2009.

In the same period, its corporate bonds portfolio increased by 175.9 percent while the proportion of OFZ state bonds in the securities portfolio decreased to 34.5 percent from 53.5 percent. (Reporting by Yelena Fabrichnaya, writing by Dmitry Sergeyev)

Reuters: Russia's Prof-Media plans IPO to repay debt-paperhttp://www.lse.co.uk/FinanceNews.asp?shareprice=&ArticleCode=c1vaw6usgyrej6d&ArticleHeadline=Russias_ProfMedia_plans_IPO_to_repay_debtpaper

Thu, 10th Dec 2009 06:21

MOSCOW, Dec 10 (Reuters) - Prof-Media, controlled by Russian industrial magnate Vladimir Potanin, plans to float up to 40 percent of its stock in an initial public offering in April 2010 to help service debts, a Russian newspaper reported on Thursday.

Vedomosti business daily, citing unnamed banking sources, reported the media firm had selected Merrill Lynch and Credit Suisse as underwriters for the proposed IPO in London, which could value Prof-Media at between $2.0 billion and $2.5 billion.

The newspaper quoted Prof-Media President Rafael Akopov saying the company had long been preparing for an IPO. He did not confirm any other details of the planned listing.

The listing could potentially raise between $800 million and $1 billion for the company's owners, Vedomosti said, which could help them to repay part of a $3 billion-plus debt to state-controlled bank VTB.

Prof-Media, which last year posted $639.4 million in revenues and $171.2 million in earnings before interest, taxation, depreciation and amortization (EBIDTA), is majority owner of Russian Internet company Rambler media Ltd. (robin.paxton@reuters.com; +7 495 775 1242; Reuters Messaging: robin.paxton.reuters.com@reuters.net)

The Moscow Times: Rosatom Expects $17Bln in Revenues http://www.themoscowtimes.com/business/article/rosatom-expects-17bln-in-revenues/391194.html

10 December 2009The Moscow Times

State nuclear firm Rosatom expects revenues of 518 billion rubles ($17 billion) this year as it plans to return to “serial” nuclear plant construction, it said Wednesday.

“This is 37 percent more than in last year. This is our goal,” Rosatom chief Sergei Kiriyenko said. “It’s extremely important for us that we’ve reached this output volume not at the expense of safety, but as it is improving.”

He said starting next year, the company would be building at least one new nuclear plant each year.

“It’s Busher in Iran next year. We’re practically at a final stage setting up the equipment. Then Kudankulam in India. In 2011, it’s the Kalininsky nuclear unit … and the second unit of Kudankulam. And every year like that,” he said.

India handed Rosatom a contract earlier this week to build four more reactors for its nuclear power station in Kudankulam, in southern India.

Bloomberg: Renaissance Expands Into Belarus Before State Asset Sales Start

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alCPq.s0fXQk

By Jason Corcoran

Dec. 10 (Bloomberg) -- Renaissance Capital, the Russian investment bank half-owned by billionaire Mikhail Prokhorov, opened an office in Minsk today as Belarus prepares to sell assets to comply with the terms of an emergency IMF loan.

“We are currently looking at a number of mergers and acquisitions opportunities, at Belarusian companies looking to tap into the international capital markets as well as the potential impact of future privatizations,” said Peter Vanhecke, head of Moscow-based RenCap’s investment banking business in Ukraine and central and eastern Europe.

Belarus was forced to borrow $2.23 billion from the International Monetary Fund this year to meet spending commitments after export revenue tumbled. The former Soviet republic has been run by Aleksandr Lukashenko, once a collective farm boss, since 1994.

RenCap said its Minsk office is the first in Belarus of a “major investment bank.” Galt & Taggart Securities, a unit of Tbilisi-based Bank of Georgia, opened an office last year to organize funding for Belarusian companies.

“We are the first international investment bank to have operations on the ground in Belarus and we feel that this puts us in a strong position to become the advisor of choice for both local public and private entities as well a foreign investors,” Vanhecke said.

To contact the reporter on this story: Jason Corcoran Moscow at +7-or Jcorcoran13@bloomberg.net

Last Updated: December 10, 2009 03:14 EST

Bloomberg: Magnit November Sales Rise 19% to $470 Million on Store Openings

By Maria Ermakova

Dec. 10 (Bloomberg) -- OAO Magnit, Russia’s second-biggest food retailer, said sales advanced 19 percent in November from the same month last year to 14.3 billion rubles ($470 million) as it opened more stores.

Magnit opened 56 stores last month, pushing the total to 3,098, the Krasnodar, southern Russia-based company said in an e- mailed statement today.

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

Last Updated: December 10, 2009 00:30 EST

BNE: State could take stake in Avtovaz

http://www.businessneweurope.eu/dispatch_text10715

bneDecember 10, 2009

The state could become a shareholder in stricken car maker Avtovaz as a result of a supplementary share issue, a highly placed source at the state corporotion Russian Technologies (Rostekhnologii) told Interfax December 9.

"The state could receive a stake during the share issue. This will come about if funds are injected directly and not via a contribution to Russian Technologies' share capital," the source said, as quoted by Interfax.

The share issue will dilute the stake owned by investment bank Troika Dialog and other minorities shareholders.

State corporation Russian Technologies will participate with budgeted funds. Global carmaking giant Renault-Nissan will make an overall EUR 240 contribution in the form of equipment from Renault and EUR 60m cash from Nissan. It is thought that the French company will not reduce its current stake 25% stake, according to Interfax.

Renault, Troika Dialog and Russian Technologies each own 25% plus one share in Avtovaz.

The Interfax source said the interest-free loan of R25bn Russian Technologies provided to Avtovaz in the spring 2009 will be converted into a long-term interest-free loan. Avtovaz is also set to receive R50bn rubles in state support, including R38bn to restructure debt and R12bn for working capital. A first tranche of R12bn could be

released by end 2009 in the form of a contribution to the share capital of Russian Technologies, Industry and Trade Minister Viktor Khristenko told Interfax on December 8. Funds will no longer be provided as interest-free loans.

Activity in the Oil and Gas sector (including regulatory)

Upstreamonline: Kentz snares Sakhalin deal http://www.upstreamonline.com/live/article201156.ece

Irish engineering group Kentz is primed to start a $25 million shutdown services and operations support contract for ExxonMobil offshoot Exxon Neftegas at the Sakhalin 1 development project in Far East Russia.

Upstream staff  Thursday, 10 December, 2009, 08:36 GMT

The shutdown is scheduled to take place during the third quarter of next year, the company said.

The Sakhalin-1 project is an oil and gas development on the north-east shelf of Sakhalin Island. Exxon Neftegas Ltd is the operator of the project.

Published: 10 December 2009  | Last updated:  10 December 2009

10.12.2009

Oil and Gas Eurasia: Sevmash, Doris Engineering Join Forceshttp://www.oilandgaseurasia.com/news/p/0/news/6258The northwest Russian shipyard and engineering plant Sevmash will establish a joint venture with the French-based Doris Engineering.An agreement on the establishment of the new company will be signed on 17 December, a press release from Sevmash informs. The signing ceremony will be held as part of Sevmash’ 70-year anniversary celebration.It is expected that the new company will be engaged in operations in the Shtokman project. Doris Engineering is one of the companies which is to provide engineering design to the Shtokman Development AG.

Copyirght 2009. Barentsobserver.com. All rights reserved.

Bloomberg: E.ON Unit to Import Less Russian Gas This Year, Die Welt Sayshttp://www.bloomberg.com/apps/news?pid=20601100&sid=aLXSFXGAWOVc

By Patrick Donahue

Dec. 9 (Bloomberg) -- E.ON AG’s Ruhrgas unit will import less gas from Russia this year than is stipulated in long-term contracts because of falling energy prices, Die Welt newspaper reported, citing unit head Bernhard Reutersberg.

The energy supplier’s gas imports from Russia won’t meet the minimum contractual level because spot-market prices are lower and Russian imports make less economic sense, the newspaper cited Reutersberg as saying.

The company will have to pay an unspecified sum to Russian state gas company Gazprom OAO, Die Welt said.

To contact the reporter on this story: Patrick Donahue in Berlin at at pdonahue1@bloomberg.net.

Last Updated: December 9, 2009 14:37 EST

Bloomberg: LUKoil Drills for Saudi Gas http://www.themoscowtimes.com/business/article/lukoil-drills-for-saudi-gas/391208.html

10 December 2009

LUKoil said it has started appraisal drilling at a Saudi Arabian gas field after reporting several dry wells last year.

The Tukhman structure in Block A has commercial natural-gas and condensate reserves in place, said a company official who declined to be identified in line with corporate policy. LUKoil will wait for the drilling results before disclosing the data.

(Bloomberg)

Alfa: ESPO tariff proposed at $52/ton, tariffs in other directions are set to rise by 20%http://www.businessneweurope.eu/dispatch_text10715

AlfaDecember 10, 2009

Yesterday the Federal Tariff Service (FTS) published its proposed crude transportation tariff on shipments through the ESPO. The proposal puts the total cost of shipment of crude from Taishet to the port of Nakhodka at RUB1,600 ($52) per ton. The final decision will be made on December 18. This is higher than the previously publicized range of $42-45/ton but way below the $130 level needed (according to Transneft) to make the ESPO a commercially viable project. The difference will be compensated by increases in transportation tariffs on shipments in other directions, which could rise as much as 20% in ruble terms in 2010.

This is NEGATIVE for the whole Russian oil industry. Even East Siberian producers will be subsidizing their eastern shipments at the expense of western routes. Rather than the government absorbing the cost of this project, the cost is being spread, negatively affecting the economics of oil production in mature areas.Chirvani Abdoullaev

The Journal of Turkish Weekly: "Friendship Pipeline" Boosts Cooperation with Neighbors: Kazakh Managerhttp://www.turkishweekly.net/news/93695/-quot-friendship-pipeline-quot-boosts-cooperation-with-neighbors-kazakh-manager.html

Thursday, 10 December 2009

The Central Asian gas pipeline, which will go into operation next year, will boost cooperation with Kazakhstan's neighbors and bring benefits to all in the region, the general manager of the Chinese-Kazakh joint venture Asian Gas Pipeline says.

In a recent interview with Chinese media, Beimbet Shayakhmetov said the construction of Line A of the dual pipeline has already been completed and ready for operation, while Line B is expected to begin to deliver gas in April or May next year, Xinhua reported.

The construction of the pipeline, which runs from the border between Turkmenistan and Uzbekistan, passing through Uzbekistan and Kazakhstan before reaching China, began in 2007.

Shayakhmetov said the 1,833-km pipeline is currently the longest gas pipeline in the world, with Turkmenistan, Uzbekistan, Kazakhstan and China directly involved in the project and Russia, Germany, Britain and the United States participating to varying extents.

The project has drawn a lot of international attention and the entry into operation has great significance, said the general manager.

The project has created large numbers of jobs in Kazakhstan and the country will also benefit by collecting gas transit fees, he said, adding that gas needs in Almaty region will be met after Phase II of the project is completed.

The pipeline has opened a new gateway for energy exports for both Turkmenistan and Uzbekistan, with the latter also benefiting from receiving large amounts of transit fees.

"In fact, most important of all, through this project, we and our neighbors have found more common interests and opportunities for cooperation between us," Shayakhmetov said.

Energy cooperation between Kazakhstan and China has reached a high level and bilateral cooperation in other areas has also been fruitful, Shayakhmetov said.

The two countries share a long border and China's powerful economy has an important impact on Kazakhstan's economic development, he said.

"During the Soviet era, Russia built a "friendship" natural gas pipeline leading to Europe. But in comparison, this Central Asian gas pipeline fully deserves the title of a "friendship pipeline," as it can well rival that pipeline in its immediate significance," he said.

Thursday, 10 December 2009

Barentsobserver: Oil pipe explosion on Yamalhttp://www.barentsobserver.com/oil-pipe-explosion-on-yamal.4663627-116321.html

2009-12-09 Oil spill covered 100 square meters of land after an explosion in an oil-gathering line in the Yamalo-Nenets Okrug last week.

According to the local Emergency Management Service, the accident was probably caused by metal fatigue, Uralinform.ru writes. A fire broke out, but was reported to have been put out quickly. No people were harmed in the accident and there was no danger of fire spreading.

The pipe belongs to the company Rosneft-Purneftegaz.

Gazprom

UPI: Gazprom hosts CNPC for gas talkshttp://www.upi.com/Science_News/Resource-Wars/2009/12/09/Gazprom-hosts-CNPC-for-gas-talks/UPI-48251260374604/

Published: Dec. 9, 2009 at 11:03 AM

MOSCOW, Dec. 9 (UPI) -- Officials from the China National Petroleum Corp. arrived in Moscow to discuss securing natural gas supplies from Russian energy giant Gazprom.

Alexander Ananenkov, deputy chairman of Gazprom's management committee, met with CNPC Vice President Wang Dongjin to discuss the terms of an October agreement setting the conditions for Russian gas supplies to China.

Both companies in October signed a framework agreement on the terms and conditions for gas supplies. Gazprom and CNPC signed a strategic cooperation agreement in 2004 on a variety of joint ventures related to Russian gas deliveries.

Deliveries of Russian gas would travel through a western corridor to China, Gazprom said.

The parties to the Moscow negotiations added terms were discussed to develop joint gas processing and gas chemical projects in eastern Russia and in other countries.

Reuters: E.ON Ruhrgas may buy less Russian gas this yearhttp://uk.reuters.com/article/idUKGEE5B90D020091210

Thu Dec 10, 2009 9:13am GMT

FRANKFURT, Dec 10 (Reuters) - E.ON's gas unit E.ON Ruhrgas (EONGn.DE: Quote, Profile, Research) may curb 2009 receipts of Russian gas under long term contracts due to a demand slump and defer purchases, its chief executive Bernhard Reutersberg said in an interview on Thursday.

"It could be that at the end of the year we will take a little less gas than is contractually agreed," he said in the daily paper Die Welt.

"If we don't take the minimum volume, we will have to pay for parts of the volumes and can take them later," he added.

European gas supply is plentiful and cheaper as industrial demand has plummeted in the financial crisis.

At the same time, competitive spot gas markets are springing up under liberalisation efforts, which have created lower prices to rival those available under long term delivery contracts.

Reutersberg said that it made no economic sense to over-import gas from its main partner, Russia's Gazprom (GAZP.MM: Quote, Profile, Research), and sell it in the spot markets, where it would weigh down prices even more.

E.ON Ruhrgas itself promotes new spot gas markets and exchange contracts for gas and has also responded to demands for separating distribution and transport.

It is in the process of moving 1,200 staff into its new E.ON Gastransport unit and expects to complete the move in August 2010.

Ruhrgas in the first nine months of 2009 saw its gas sales fall by 15 percent year-on-year to 428 billion kilowatt hours. [ID:nLB139751]

Media reports have said it expected a steep EBIT loss for the full year.

(Reporting by Vera Eckert)

Dow Jones: Keppel Corp Units Get Contracts Worth S$160 Millionhttp://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200912100005dowjonesdjonline000002&title=keppel-corp-units-get-contracts-worth-s160-

SINGAPORE -(Dow Jones)- Singapore-based rig builder Keppel Corp. (BN4.SG) said Thursday its units have secured contracts worth S$160 million, bringing the company's year-to-date order books to a total of S$1.5 billion.

The latest contract is for a floating production storage and offloading vessel conversion, a derrick lay barge completion and the life extension of a semisubmersible rig, Keppel said in a statement.

"As market sentiments liven up, we are receiving more enquiries with some new contracts materialising in the last quarter of this year," Keppel Offshore & Marine Tong's chief executive, Chong Heong, said in a statement.

While it expects to complete the conversion order in the first quarter of 2011, it is likely to finish the barge order by the second quarter of 2010.

Work on the rig is expected to start in the first quarter of 2010 and will be delivered to Libya for Russia's Gazprom in the second quarter of next year, Keppel said.

"The above contracts are not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation for the financial year ending 2009," it said.

-By P.R. Venkat, Dow Jones Newswires; +65 64154 152; venkat.pr@dowjones.com