Russia 110809

Basic Political Developments U.S., Russia to continue missile defense talks in St. Petersburg - The United

States and Russia will continue talks on the issue of a proposed European missile shield on August 11-12 in St. Petersburg, the U.S. Department of State said on Monday.

Medvedev and Aliyev to discuss Karabakh conflict in Sochi - According to the Kremlin press service, the leaders will discuss the Karabakh issue, the status of the Caspian Sea and bilateral relations.

o Medvedev-Aliyev meeting due in Sochio Azerbaijani President leaves for Russia (UPDATE) - Presidents Medvedev

and Aliyev will also discuss the Caspian theme in Sochi in the context of the ongoing negotiations on the legal status of the Caspian Sea and in light of the decisions of the Third Summit of Heads of Caspian littoral states in Baku in November 2010," the Kremlin press-service said.

Global Poll Finds Strong Pro-Russian Sentiment In Armenia - Three in four people in Armenia approve of the track record of Russia's current leadership, making it the fifth-most pro-Russian country in the world, according to a recent Gallup opinion poll.

Russian, Finnish PMs meet on Black Sea - Prime Minister Jyrki Katainen meets his Russian counterpart Vladimir Putin on Tuesday in Sochi, Russia. The premiers are to review the world financial situation as well as ties between their two countries and between the EU and Russia. He is accompanied on the trip by Minister for European Affairs and Foreign Trade Alexander Stubb of his own National Coalition Party – rather than Stubb’s successor as Foreign Minister, the SDP’s Erkki Tuomioja.

o Russian, Finnish premiers to meet in Sochi o EU seeks visa-free regime with Russia – Finnish PM: He said that as a EU

member state, Finland actively influences the shaping of European policy towards Russia, which will be an advantage for all.

Wirtschaftsblatt: Agreement with Russia on Belene NPP is close at hand - Moscow said it is working on a plan for the key steps for implementation. Atomstroyexport and NEC agreed to set up a working group to clarify all financial matters.

Nigeria: Country Worries Over Stalled Nuclear Accord With Russia Russia In Talks With North Korea Over Gas Pipeline: Foreign Minister Russia to send 50,000 Tons of Food Aid to North Korea Embassy asks Russians to not to visit three London boroughs Russia lifts ban on EU veggies imports

o Russia lifts vegetable embargo - The Commission today (9 August) welcomed Russia's confirmation that it has cancelled an import ban on

fresh EU vegetables, almost two months after the source of a serious outbreak of E.coli was identified.

Russia strengthens agricultural positions at WTO accession talks – Medvedev Presidential rights council to look at Belarus’ blacklist of Russians - The

Presidential Council for Human Rights is going to look at the list of Russians banned from entry to Belarus, the group’s leader Mikhail Fedotov has said.

Sea-based strategic missile twice as powerful as Bulava developed in Russia - Makeyev Center

o Russia tests state-of-the-art Liner strategic missileo Missile twice as powerful as "Bulava" created in Russia

New Russian light helicopter to appear at MAKS - Berkut VL is a two-seat light commercial helicopter with a take-off weight of 740 kg, a 147 hp engine, a maximum speed of 174 km/h, and range of 380 km.

Kaliningrad Bans Vote on Nuclear Plant - The Baltic exclave’s legislature has blocked a public referendum on the construction of a nuclear power plant, Interfax reported Monday.

Supreme Court to examine cutting sentence to intelligence colonel - The Russian Supreme Court will examine an appeal by the defence of foreign intelligence colonel Alexander Poteyev who was sentenced in absentia to a 25-year imprisonment for betraying Russian intelligence officers to the US.

Far-right groups on rise in Russia’s Far East - FSB chief o Far East’s anti-terrorist protection not enough

Fire put out at Mikoyan meat processing plant in Moscow Missing cargo plane not yet found in Magadan region

o Russian cargo plane carrying 8 missing: Ministryo Plane disappears in Russia's Far East after engine fire o Another Soviet-made aircraft crashes - A Soviet-era An-12 cargo plane

has apparently crash landed in flames in Russia’s Far Eastern Magadan Region.

Seven people killed in mass fight in Dagestan. o Seven killed in brawl, shootout in southern Russia

Krasnoyarsk Territory police tighten security after mass murder Russian scientists to develop space rover to study the Sun Moscow to Spend $46 Billion on Construction Over 2012-2014 - Spending may

reach $16.4 billion in 2014, up a third from this year’s level, Vedomosti said today, adding that Moscow construction companies may lack the capacity to build that much.

RIA Russian Press at a Glance, Tuesday, August 9, 2011 The Death of a Journal - Who Is Cracking Down on LiveJournal? Fears of dissolution - The closer the elections, the more actively politicians will

be marketing their goods. Two products are being offered: far-reaching promises and fear. In highest demand by the consumer is fear of “Russia’s collapse.”

Can Russia Survive Through 2020? - Strategy 2020 -- the question of where Russia will be in 2020 -- hangs in the air. There are a variety of scenarios being offered by leading political scientists and other analysts, but one thing is clear: There will be no miracles in the next nine years.

National Economic Trends Ruble plummets against dollar, euro

o Russian ruble drops 3 pct against dollar, stocks down as falling oil prices weigh on economy

Russian markets plunge again in wake of U.S. downgrade - The dollar-denominated RTS stock exchange index fell 4.23 percent in the first 30 minutes of trading on Tuesday past the psychologically important 1,600 points level to 1,596.99 after a dramatic plunge of 7.84 percent on Monday's close to 1,657.77 for the first time since December 10, 2010.

Russia’s foreign trade soars 36.1 percent to $386.9bn Russian government debt takes hit - Russia’s government debt market took a hit

from the instability on global fixed income markets as the ECB confirmed buying of Spanish and Italian long term sovereigns, and with the S&P downgrade of U.S. debt also weighing on sentiment.

A Grain of Discomfort - Russia's Bumper Wheat Harvest Gives Little Cause for Celebration

Russia: Back to oil's basics - How important is oil to Russia? RenCap Main risk remains the oil price - Given the turbulence in global financial markets

we take a preliminary look at our commodity price scenarios for Russia. Citi

Business, Energy or Environmental regulations or discussions VTB, Mechel, Polyus, Razgulay May Move: Russian Equities Preview Russian stock market daily morning report (August 09, 2011) Sberbank more than doubles net profit in 7M

o Sberbank RAS net profit $7 bln in first 7 months Gref raises Sberbank stake Citibank Loans $100M

o Citi Provided 1 year Trade Finance Loan to Russian Agricultural Bank Sitronics Seeks State Orders for Microchips, Vedomosti Reports Polyus Gold secures funding for possible buyout Polyus Has 3 Million Ounces of Gold in Kazakhstan, Romania Alrosa Rated as 'Buy' Alrosa Selling Hotel Division Russian H1 magnesium and titanium manufacture goes up Metinvest expands its distribution network in Russian Federation UAE- Russian regions open as Etihad Airways and S7 Airlines expand agreement

Activity in the Oil and Gas sector (including regulatory) LUKOIL, Rosneft, TNK-BP, Bashneft and Gazprom to bid for Iraq licences Russian oil companies return to Iraq - They are once again laying claims to oil

deposits in the country By Olga Mordyushenko

UPDATE 1-Baker Hughes awarded LUKOIL Iraq contract Rosneft to start paying Mineral Extraction Tax for Vankor's crude BP files suit against TNK-BP partner - Oil giant BP has filed a suit with a

Stockholm tribunal against Renova, one of its partners in its TNK-BP Russian joint venture, over Renova's unwillingness to allow it to team up with local giant Rosneft, Kommersant business daily said on Tuesday.

BP goes to tribunal with Renova - new round in dispute between BP and AAR BP seeks arbitration in dispute with Renova –report TNK-BP applies to acquire Itera - According to Izvestia, TNK-BP has made an

application to the Federal Anti-Monopoly Service related to the possible acquisition of a 50% stake in Itera.

Gazprom Gas export prices up 26% - Average gas export prices from Russia grew by 18 -

26% in the first half of the year, reports Prime, as high oil prices boosted the cost of gas under pricing formulas.

08-08-2011 12:56 Ukraine pays USD 477 million for July gas to Russia Gazprom commissioned USD 270 mln gas pipeline installed by Romanian

company - The gas pipeline installed by the Romanian company GSP (Petrol Services Group) was commissioned by Russia’s energy company Gazprom in June 2011. The project involved laying a 177 kilometers gas pipeline along the Russian continental shelf of the Black Sea, between Dzhubga-Lazarevskoe-Soci and connecting it with the Russia - Turkey inter continental pipeline. It is projected that the gas pipeline will have an annual throughput capacity of approx 3.8 billion cubic meters.

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Full Text Articles

Basic Political Developments

U.S., Russia to continue missile defense talks in St. Petersburghttp://en.rian.ru/mlitary_news/20110808/165633245.html

21:55 08/08/2011

WASHINGTON, August 8 (RIA Novosti)

The United States and Russia will continue talks on the issue of a proposed European missile shield on August 11-12 in St. Petersburg, the U.S. Department of State said on Monday.

Ellen Tauscher, Under Secretary of State for Arms Control and International Security, will meet with chief Russian negotiator on the issue, Russian Deputy Foreign Minister Sergei Ryabkov.

"Tauscher is scheduled to meet with her Russian colleague Deputy Foreign Minister Sergei Ryabkov. They will continue talks on missile defense cooperation," a State Department official told RIA Novosti.

Russia and NATO have agreed at a Russia-NATO summit in Lisbon in November 2010 to work on the missile shield but NATO wants it to be based on two independent systems that exchange information, while Russia favors a joint system with full-scale interoperability.

Russia has retained staunch opposition to the planned deployment of U.S. missile defense systems near its borders, claiming they would be a security threat. NATO and the United States insist that the shield would defend NATO members against missiles from North Korea and Iran and would not be directed at Russia.

Moscow demands legally binding guarantees that NATO missile defense systems will not be directed against it.

The European missile shield issue is widely considered a tester for the future of Russian-U.S. relations, especially in light with the upcoming general and presidential elections in both countries.

Medvedev and Aliyev to discuss Karabakh conflict in Sochi http://english.ruvr.ru/2011/08/09/54375945.html

Aug 9, 2011 03:19 Moscow Time

The presidents of Russia and Azerbaijan Dmitry Medvedev and Ilham Aliyev will hold talks today in Sochi.

According to the Kremlin press service, the leaders will discuss the Karabakh issue, the status of the Caspian Sea and bilateral relations.

In June, the heads of Russia, Azerbaijan and Armenia held talks in Kazan on the Nagorno-Karabakh issue. At the time the presidents did not reach a final agreement.

As far as the Caspian theme is concerned, Medvedev and Aliyev broached it in the context of ongoing negotiations on the legal status of the Caspian Sea, and in light of the decisions of the Third Caspian Summit, which took place in Baku in November last year.

10:26 09/08/2011 » Politics

Medvedev-Aliyev meeting due in Sochihttp://www.panorama.am/en/politics/2011/08/09/meeting-in-sochi/

Presidents of Russia and Azerbaijan Dmitry Medvedev and Ilham Aliyev will meet in Sochi today. The President of Azerbaijan is traveling to Sochi at the invitation of his Russian counterpart, the official website of the Russian President said.

The two leaders are expected to exchange views over the “key aspects in the Russian-Azerbaijani relations, as well as topical regional issues placed on the agenda, first of all those concerning the resolution of the Nagorno-Karabakh conflict,” Interfax reported citing the Kremlin’s press office.

The Kremlin reminded that the Russian and Azerbaijani Presidents have periodic meetings in a tripartite format, with Armenian President Serzh Sargsyan participating in the talks. The last meeting in that format took place in Kazan on June 24. The source in the Kremlin told Interfax that Dmitry Medvedev and Ilham Aliyev are also going to discuss the Caspian problem in the context of the ongoing negotiations on the legal status of the Caspian sea.

The President of Russia will also meet with the President of Ukraine Viktor Yanukovich in Sochi on August 11, the source said.  

Source: Panorama.am

Azerbaijani President leaves for Russia (UPDATE)http://en.trend.az/news/politics/1915896.html

[09.08.2011 11:35]

Background added after the second paragraph (the first version was posted at 11:20)

President of Azerbaijan Ilham Aliyev has today headed to Sochi, Russia, for a working visit.

At the Heydar Aliyev International Airport, the Head of State was seen off by Prime Minister Artur Rasizade and Baku Mayor Hajibala Abutalybov.

The Azerbaijani and Russian Presidents Ilham Aliyev and Dmitry Medvedev will discuss Nagorno-Karabakh conflict settlement and the legal status of the Caspian Sea at the talks in Sochi on Tuesday, RIA Novosti reported.

The press-service of the Russian President told journalists that President Aliyev will pay a working visit to Russia at the invitation of Russian counterpart.

"The extensive exchange of views on key aspects of Russian-Azerbaijani relations, as well as on the urgent issues of regional agenda, especially the negotiation process on Nagorno-Karabakh conflict settlement is planned to be held during the meeting of the two leaders," a statement said.

The Kremlin recalled that the Russian and Azerbaijani Presidents regularly meet during the trilateral talks on the Nagorno-Karabakh settlement with the Armenian President.

The last meeting was held in Kazan on June 24.

The conflict between the two South Caucasus countries began in 1988 when Armenia made territorial claims against Azerbaijan. Armenian armed forces have occupied 20 percent of Azerbaijan since 1992, including the Nagorno-Karabakh region and seven surrounding districts.

Azerbaijan and Armenia signed a ceasefire agreement in 1994. The co-chairs of the OSCE Minsk Group - Russia, France, and the U.S. - are currently holding the peace negotiations.

Armenia has not yet implemented the U.N. Security Council's four resolutions on the liberation of the Nagorno-Karabakh and the surrounding regions.

Presidents Medvedev and Aliyev will also discuss the Caspian theme in Sochi in the context of the ongoing negotiations on the legal status of the Caspian Sea and in light of the decisions of the Third Summit of Heads of Caspian littoral states in Baku in November 2010," the Kremlin press-service said.

In November 2003, the Caspian countries signed the Framework Convention for the Protection of the Marine Environment of the Caspian Sea.

In July 1998 Russia and Kazakhstan signed an agreement on the delineation of the northern part of the Caspian Sea in order to exercise sovereign rights for subsoil use.

On Nov. 29, 2001, and Feb. 27, 2003, Kazakhstan and Azerbaijan signed an agreement on the delineation of the Caspian Sea.

Kazakhstan, Azerbaijan and Russia signed an agreement on the delineation of adjacent sections of the Caspian Sea on May 14, 2003.

Global Poll Finds Strong Pro-Russian Sentiment In Armenia http://www.rferl.org/content/pro_russia_sentiment_in_armenia/24291052.html

August 09, 2011 YEREVAN -- Three in four people in Armenia approve of the track record of Russia's current leadership, making it the fifth-most pro-Russian country in the world, according to a recent Gallup opinion poll.

The poll -- conducted by Gallup in 104 countries last year -- shows that only 7 percent of Armenians are critical of the Kremlin's leadership, with another 17 percent being undecided. The remaining 75 percent positively assess policies pursued by President Dmitry Medvedev and Prime Minister Vladimir Putin, the U.S. pollster said. The poll showed that Moscow enjoys higher approval ratings in only four other countries surveyed: Tajikistan, Kyrgyzstan, Mali, and Uzbekistan.

The findings of the survey are in tune with strong pro-Russian sentiment that has traditionally existed in Armenia.

Despite increasingly favoring closer ties with the West, many Armenians continue to regard Russia as a guarantor of their country's security. The unresolved conflict over the breakaway Azerbaijani region of Nagorno-Karabakh and historically strained relations with neighboring Turkey are seen as key reasons for that.

The Gallup poll also found strong pro-Russian sympathies in much of the former Soviet Union, including Armenia's arch-foe Azerbaijan, where 54 percent of respondents thought well of the performance by Putin and Medvedev.

"Russia's sphere of influence continues to be most visible in former Soviet countries, where people are most likely to be familiar with the Kremlin's leadership and a median of 61 percent said they approved," the pollster said in an explanatory note.

Georgia is a rare exception to this rule due to Russian forces' occupation of the breakaway Georgian regions of South Ossetia and Abkhazia. As much as 76 percent of those polled in Georgia disapproved of the Kremlin's leadership.

"The popularity that Russia's leadership enjoys in several countries in Central Asia and in the Caucasus has its roots in their shared history as former Soviet republics," said Gallup. "But the high approval also reflects how dependent many residents of these counties are on remittances from Russia."

"In Tajikistan, where approval of Russia's leadership is the highest, the International Monetary Fund estimates that these remittances accounted for 50 percent of the country's GDP in 2008," it added.

In Armenia, remittances made up some 13 percent of the country's GDP last year.

Government data shows that around 80 percent of the 2010 cash remittances totaling at least $1.3 billion came from Russia, which is home to hundreds of thousands of Armenian migrant workers.

There are also hundreds of thousands of Tajik, Uzbek, and Kyrgyz citizens working in Russia.

Read more in Armenian here

Russian, Finnish PMs meet on Black Seahttp://www.yle.fi/uutiset/news/2011/08/russian_finnish_pms_meet_on_black_sea_2777031.html

published today 06:49 AM

Prime Minister Jyrki Katainen meets his Russian counterpart Vladimir Putin on Tuesday in Sochi, Russia. The premiers are to review the world financial situation as well as ties between their two countries and between the EU and Russia.

After a working lunch, Katainen and Putin are to hold a joint press conference. Katainen plans to return to Finland on Wednesday.

This is Katainen's first meeting with Putin since taking office in late June.

He is accompanied on the trip by Minister for European Affairs and Foreign Trade Alexander Stubb of his own National Coalition Party – rather than Stubb’s successor as Foreign Minister, the SDP’s Erkki Tuomioja.

Sochi, a Black Sea resort in Abkhazia, is to host the 2014 Winter Olympics.

YLE

Russian, Finnish premiers to meet in Sochihttp://en.rian.ru/world/20110809/165637622.html

05:22 09/08/2011

MOSCOW, August 9 (RIA Novosti)

Russian Prime Minister Vladimir Putin and his Finnish counterpart Jyrki Katainen will hold talks in the southern Russian resort of Sochi on Tuesday, the Russian government press service reported.

Putin and Katainen, who will be on a working visit to Russia on August 9-10, are expected to discuss bilateral cooperation, interaction between Russia and the European Union, as well as the global economic situation.

Bilateral trade last year totaled $16.75 billion, which is 27.7% more than in 2009.

Katainen, who was earlier Finland's finance minister, assumed the prime minister's office in June, and talks with Putin will his first on the new post.

00:33 09/08/2011ALL NEWS

EU seeks visa-free regime with Russia – Finnish PM

http://www.itar-tass.com/en/c154/200406.html

HELSINKI, August 9 (Itar-Tass) — A visa-free regime is a common major objective of Russia and the European Union, Finnish Prime Minister Jyrki Katainen told Itar-Tass on Monday.

According to the Finnish prime minister, making travels between Russia and EU countries easier would boost contacts between people as well as trade and economic cooperation. Jyrki Katainen said Finland is actively contributing to free travels between Russia and the EU, and the fact that most visas issued to Russian nationals are multi-entry testifies to that.

He believes it is particularly important to make transition to a visa-free travel regime a controlled process that would take place when both sides were ready.

The prime minister believes that at the present moment major joint projects are aimed at expanding the freedom of movement, partnership in the sphere of modernization and talks on a new basic treaty that would establish new frameworks of relations between Russia and the EU.

He said that as a EU member state, Finland actively influences the shaping of European policy towards Russia, which will be an advantage for all.

He said economy is one of the key spheres of relations between Russia and the European Union. According to him, about 80 percent of major investments in the Russian economy have come from EU countries.

Besides, he said that Russia and the European Union also discuss issues of cooperation in the sphere of foreign policy and the strengthening of security, for example in the sphere of crisis management.

Wirtschaftsblatt: Agreement with Russia on Belene NPP is close at hand http://www.focus-fen.net/index.php?id=n256728

09 August 2011 | 10:26 | FOCUS News AgencyHome / BulgariaVienna. The end of the dispute over the construction of Bulgarian Belene NPP is already in sight, the Austrian newspaper Wirtschaftsblatt comments. Two weeks ago, the Russian company Atomstroyexport claimed in the International Court of Arbitration in Paris against the Bulgarian electricity company NEC to pay compensation of EUR 58 million. Bulgaria reacted with counterclaim for EUR 61 million. Now, however, it seems that the project enters the calm waters. Moscow said it is working on a plan for the key steps for implementation. Atomstroyexport and NEC agreed to set up a working group to clarify all financial matters. Construction of Belene NPP is still controversial. The main difference come from the price. Russia stated that construction would take EUR 6.3 billion, while the Bulgarian government estimated cost of EUR billion. By the end of September Bulgaria must decide whether the project for construction of nuclear power will continue or not.

Nigeria: Country Worries Over Stalled Nuclear Accord With Russia http://allafrica.com/stories/201108080809.html

Zakariyya Adaramola

8 August 2011

The Federal Government has decried the non-implementation of an agreement between Nigeria and the Russian Federation on the development of nuclear energy for peaceful purposes in the country.

Speaking when he received in audience a 7- man delegation from the Russian State Corporation (RUSATOM) led by its Director General, Mr. Nikolay Spassy, the minister of Science and Technology, Professor, Ita Okon Bassey Ewa, said "Nigeria and the

Russian Federation signed a Cooperative agreement in 2009, since the signing of the agreement, no significant efforts were made to implement it". Speaking earlier, Mr. Spassky said they were in the ministry to brief the minister on the benefits of nuclear power plants.

August 08, 2011 22:00 PM

Russia In Talks With North Korea Over Gas Pipeline: Foreign Minister

http://www.bernama.com/bernama/v5/newsworld.php?id=606858

MOSCOW, Aug 8 (Bernama) -- Russia is in talks with North Korea to build a pipeline across the inter-Korean border to supply Siberian gas to South Korea, South Korea's Yonhap News Agency reported Russia's foreign minister as saying Monday.

Building a gas pipeline across the two divided Korean states has long been a coveted project of Russia to sell its Siberian gas to South Korea, one of the world's largest natural gas consumers.

South Korea is a big supporter of the project but it has yet to be approved by North Korea.

The two Koreas are still technically at war, with no peace treaty signed at the end of the 1950-53 Korean War.

South Korean experts have said that the pipeline project, if successfully pushed, would give cash-strapped North Korea tens of millions of dollars a year in handling charges.

After a meeting with his South Korean counterpart, Kim Sung-hwan, in the Russian capital, Russian Foreign Minister Sergey Lavrov said there currently are "contacts at the level of gas companies' chiefs" in the three nations for the gas pipeline project.

"If experts agree at the corporate level, all three capitals will provide political support," Lavrov told a press conference. The Russian diplomat also said talks are underway on another major project to erect power lines across the two Koreas to provide South Korea with the secondary power of Russia.

Lavrov said discussions are also under way to connect the Trans-Siberian Railway (TSR) and the Trans-Korean Railway (TKR), a project that experts say can help South Korea and even Japan transport European-bound exports overland.

The two foreign ministers met as regional players are trying to re-open stalled the six-party denuclearization talks with North Korea. The forum groups the two Koreas, Russia, the US, China and Japan.

Also speaking at the news conference, Kim said he and Lavrov had "in-depth" discussions about the current political situation on the Korean Peninsula.

"Both sides agreed that the six-party talks, if resumed, should be substantial and practical," Kim said.

Lavrov urged the six-party members to rely on "peaceful, political and diplomatic means" to help restart the talks.

Lavrov also said North Korean leader Kim Jong-il has been invited to visit Moscow "long ago" but the scheduling should be coordinated.

The Russian diplomat said Moscow and Pyongyang regularly discuss the situation on the Korean Peninsula.

"We want (North Korea) to develop dynamically and to solve its international problems that would facilitate the normalisation of the situation in Northeast Asia," he said.

Lavrov said bilateral trade between Moscow and Seoul should reach a record US$20 billion in 2011 and added South Korean investments in Russia are on the rise.

The two ministers said they also focused on expanding their relations, in particular through developing mutual projects in high technology such as space exploration and electronics.

-- BERNAMA

Russia to send 50,000 Tons of Food Aid to North Koreahttp://blogs.voanews.com/breaking-news/2011/08/08/russia-to-send-50000-tons-of-food-aid-to-north-korea/

Posted 8 hours ago

Russian Foreign Minister Sergei Lavrov says his country will send 50,000 tons of grain to North Korea to help it cope with food shortages after devastating floods.

Lavrov spoke to reporters Monday after a meeting with visiting South Korean counterpart Kim Sung-hwan.

The South Korean minister for foreign affairs and trade arrived in Moscow Sunday to discuss a wide range of topics, including the situation on the Korean peninsula and joint ventures with Russia.

The two officials said Moscow and Seoul favor a peaceful solution of the North Korean nuclear problem through political and diplomatic efforts. Lavrov said Moscow is discussing ways to overcome the current impasse in the six-nation talks on North Korea's nuclear disarmament with officials in Pyongyang. The last round of those talks was held in 2008 in China.

Russia's top diplomat also said that North Korean leader Kim Jong Il has a standing invitation to visit Russia again. Mr. Kim last visited Russia in 2002 when he met with then President Vladimir Putin in the eastern city of Vladivostok.

Lavrov told the news media Monday that he and the visiting South Korean official discussed tripartite economic projects, including the construction of a gas pipeline from Russia to South Korea via North Korea, and an electric power line along the same route. He said leaders of all three countries would support these projects if their corporations strike a deal.

He said he and Kim also looked into the possibility of connecting the Korean Railway lines with the Trans-Siberian Railway.

Relations between the two Koreas deteriorated last year with Seoul blaming Pyongyang for the sinking of its warship in March and Pyongyang launching an artillery attack on a South Korean island. Fifty South Koreans were killed in the two incidents.

02:48 09/08/2011ALL NEWS

Embassy asks Russians to not to visit three London boroughs

http://www.itar-tass.com/en/c154/200426.html

LONDON, August 9 (Itar-Tass) — The Russian Embassy in London UK has recommended Russian nationals to refrain from going to London’s Brixton, Enfield and Tottenham.

The embassy said there were no Russian nationals among people injured or detained during disorder on August 6 and 7. Meanwhile, London’s police have asked the parents to keep children at home.

Riots spread on Monday to Birmingham. Shops and restaurants in the centre of the city were looted, police said. Because of disorder, British Prime Minister David Cameron has cut short his Italian holiday to return to London to handle the response to escalating riots in the capital, his office said.

Russia lifts ban on EU veggies importshttp://english.ruvr.ru/2011/08/09/54381715.html

Aug 9, 2011 10:30 Moscow Time

Russia is lifting the ban on fresh vegetable imports from the European Union as of today, says Russia’s Chief Hygiene Authority Gennady Onishchenko.

According to him, no more additional certificates will be required from now on for every single imported batch of produce.

Russia banned vegetable imports from the European Union in early June following the enteric infection breakout that killed more than 50 people.

Russia lifts vegetable embargohttp://www.euractiv.com/en/trade/russia-lifts-vegetable-embargo-news-506943

Published 09 August 2011Tags Russia vegetable ban WTO

The Commission today (9 August) welcomed Russia's confirmation that it has cancelled an import ban on fresh EU vegetables, almost two months after the source of a serious outbreak of E.coli was identified.

According to Russian agency Interfax, consumer protection chief Gennady Onischenko said: "I took a decision to lift all the restrictions on imports of vegetables from the European Union from Tuesday, August 9.”

"On top of that a special regime that required an issuance of special certificates for each shipment of vegetables is also being lifted," Onishchenko added.

In a written statement, Health and Consumer Policy Commissioner John Dalli welcomed the decision taken by Moscow and said it was in compliance with an agreement reached

between European Commission President José Manuel Barroso and Russian President Dmitry Medvedev at the 10 June EU-Russia summit (see background).

Dalli explained that – under the agreement – the temporary certification system introduced by Russia for imports of fresh EU vegetables would be applied for up to ten days after no new human cases of the E. coli were reported by EU Member States. The last such case was reported on 27 July, according to Dalli.

It has taken Russia almost two months to lift the ‘vegetable embargo’. Germany isolated the deadly E.coli bacteria to contaminated bean sprouts grown at an organic farm in the north of the country on 12 June.

In his statement Dalli said: "Whereas the Commission remains vigilant and committed to learn the lessons of the crisis that has caused so much suffering, it is of course welcome that this development represents the successful outcome of intense efforts to sort out this trade issue that emerged as a result the E. coli outbreak."

The diplomatic language belied a long negotiation which has seen tempers frayed. Commission spokesmen have expressed profound dissatisfaction that the lifting of the import ban – agreed between Presidents Medvedev and Barroso at the summit – was not effected earlier.

In a recent statement, EU Trade Commissioner Karel De Gucht linked Russia's handling of the E.coli controversy with the country's bid to join the World Trade Organisation (WTO).

20:52 08/08/2011ALL NEWS

Russia strengthens agricultural positions at WTO accession talks – Medvedev

http://www.itar-tass.com/en/c154/200336.html

KRASNODAR, August 8 (Itar-Tass) —— Russia now has much stronger agricultural positions at the accession talks with the World Trade Organisation than 5-7 years ago, President Dmitry Medvedev said.

He stressed that the achievements made up to date should not be lost after accession to the WTO.

“We must keep everything, of course,” Medvedev said at a meeting with agricultural workers on Monday August 8.

“In our talks with the EU, the United States and other countries we try to defend the positions of our agricultural producers as much as we can,” the president said, adding that the Russian delegation has so far been succeeding in doing so.

“The overly stringent requirements put forth for us were rejected, but some countries, including our neighbours, gave up without fighting and they have a totally different situation now,” Medvedev said.

“We must preserve everything we have done and everything that cost us money, effort and hard work,” he said.

Russia has made a qualitative leap in terms of agriculture over the last several years. “If were joining the WTO 5-7 years ago, I am sure it would have been more difficult for us to defend the interests of our agricultural producers,” he said.

Medvedev said earlier, “We should cover the remaining distance quickly, without creating big problems for communication with our leading partners in the EU. I hope that the government will find such compromise.”

Medvedev instructed the government to speed up Russia's accession to the WTO and recalled that he discussed this issue in particular with the head of that organisation and the U.S. president.

“We believe it necessary to intensify our efforts to join the WTO,” he said.

Medvedev said Russia would use the shortest way possible to join the WTO. He said the form of accession was less important.

“I am very pleased by the fact that our decision to create the Customs Union stirred up international interest in Russia's accession to the WTO so much. Only recently did I think that no one was really interested in this. Now I am confident that accession is necessary not only for Russia, but also for its EU partners. This is an important result of the creation of the Customs Union,” Medvedev said.

“The only question that remains and that will most likely be solved shortly is the scenario of accession of the Russian Federation to the WTO: whether it will be done as part of a joint process of our union's accession to the organisation or we will do it separately, individually, but after coordinating our position in advance with our Customs Union partners. Both are possible, I think. What is important for us is the speed: whichever way is the shortest, we will use that way. If it turns out to be the way of concerted but individual accession, we will choose that way,” Medvedev said.

“Such instructions have been given to the government, and the government is working on this now,” the president added.

The United States actively supports Russia’s accession to the WTO and hopes that this process can be completed before the end of the current year, Under Secretary of State for Economic, Energy and Agricultural Affairs Robert Hormats said earlier.

The light at the end of the tunnel is now brighter than ever, he said at the Carnegie Endowment for International Peace on June 20, referring to prospects for Russia’s admission to the WTO.

But when asked if this work could be finished by July, Hormats gave no clear answer and repeated that the U.S. would use the end of the years as a feasible deadline and there was nothing that could prevent the sides from completing the process by that time.

However Russian officials said the other day that if the remaining questions were not solved by August, the process may drag on for years.

Hormats said that Washington was requiring no more and no less of Moscow than of other countries that seek WTO membership and stressed that there was no and could be no discrimination.

The U.S. administration continues to support to steadfastly support Russia’s admission to the WTO, U.S. Deputy Trade Representative Miriam Sapiro said earlier.

Russia may become a member of the World Trade Organisation before the end of the year, its Director-General Pascal Lamy said.

For the first time in about ten years that he has been dealing with Russia’s admission to the WTO, Lamy seems to be truly hopeful that the country’s admission to the organisation is real as never before, he said.

“We should cover the remaining distance quickly, without creating big problems for communication with our leading partners in the EU. I hope that the government will find such compromise,” Russian President Dmitry Medvedev said earlier.

Medvedev has instructed the government to speed up Russia's accession to the WTO and recalled that he discussed this issue in particular with the head of that organisation and the U.S. president.

“We believe it necessary to intensify our efforts to join the WTO,” he said.

Medvedev said Russia would use the shortest way possible to join the WTO. He said the form of accession was less important.

Usually, admission to the WTO takes about 10 years. Russia applied for admission in December 1994 and has repeatedly complained about the delay since then.

Presidential rights council to look at Belarus’ blacklist of Russianshttp://rt.com/politics/news-line/2011-08-09/#id15927

11:06

The Presidential Council for Human Rights is going to look at the list of Russians banned from entry to Belarus, the group’s leader Mikhail Fedotov has said. “We want to know who is banned from traveling to Belarus and why. We are members of the Union State, we have lots of agreements, let’s see how well they are observed,” Fedotov said. The council has already sent a suggestion to Minsk concerning the establishment of a contact group to look into Belarusian affairs. This spring, Belarus ordered several Russian rights activists, including Yury Djibladze of the Presidential Council for Human Rights, to leave the country. They have been banned from Belarus for at least a year.

08/09 09:56   Sea-based strategic missile twice as powerful as Bulava developed in Russia - Makeyev Center

http://www.interfax.com/txt.asp?rbr=4

Russia tests state-of-the-art Liner strategic missilehttp://rt.com/politics/news-line/2011-08-09/#id15927

11:08

Russia is currently testing a new, sea-based strategic missile called the “Liner”, which is more powerful than the Bulava, the Makeyev State Missile Center has reported. Liners, which have been undergoing tests since May, are capable of carrying nine to twelve small-class warheads, while the Bulava can only be equipped with six. "The Liner can carry 1.5 - 2 times more small-class warheads than the Bulava missile," the company said in a press release.

GOOGLE TRANSLATION

http://lenta.ru/news/2011/08/09/liner/

Missile twice as powerful as "Bulava" created in RussiaState Rocket Center Makeyev created a strategic sea-based missile "liner", the power of the combat load is twice as large as that of prospective ballistic missile submarines, P-30 "Bulava". As informs "Interfax", the first flight test of a new missile on 20 May 2011 and were found to be successful. According to the Makeyev State Rocket Center, the adoption of "liner" for service will extend the existence of north-western group of submarines to project 667BDRM 2025-2030 year.Many of the technical data "Liner" has not yet been disclosed. The missile is capable of carrying six to 12 combat units of low power or four blocks of medium power. According to the Makeyev State Rocket Center, "Bulava", whose adoption into service is scheduled for late 2011, can carry up to six blocks of low power. Earlier it was reported that F-30 can be equipped with six to ten nuclear units with capacity up to 150 kilotons each. "Liner" is also capable of carrying a mixed load of military combat units of various capacities.The first test "Liner" held on 20 May 2011, but then it was reported that the Russian navy has made ballistic missile test launch of "Blue", which is the main armament of submarines of Project 667BDRM "Dolphin". The launch was carried out on board the nuclear submarine K-84 "Ekaterinburg". Later it became known that the missile was launched "liner". Some experts suggested that the "Liner" is a deep modernization of missiles, "Blue".Liquid-fuel rocket sea-based "Blue" was put into service in 2007. Its length - 15 meters, diameter - 1.9 meters, the starting weight - 40 tons. Missile system allows for simultaneous and single launches of missiles while moving at depths of up to 55 meters and at speeds up to 7 knots. "Blue" is capable of carrying four to eight warheads, and its flight range is 8.3 thousand kilometers. Previously reported that the missile will be armed with Russia at least until 2030.

New Russian light helicopter to appear at MAKShttp://en.rian.ru/business/20110809/165640759.html

11:10 09/08/2011

MOSCOW, August 9 (RIA Novosti)

A new Russian light helicopter, the Berkut VL, will go on show for the first time at the Moscow Air Show at Zhukovsky next week, the machine’s maker Berkut said on Tuesday.

“We will show the first production standard Berkut VL, patented for mass production, at MAKS,” a Berkut representative said.

Berkut VL is a two-seat light commercial helicopter with a take-off weight of 740 kg, a 147 hp engine, a maximum speed of 174 km/h, and range of 380 km.

The machine is being produced at a plant in Tolyatti in central Russia. The factory can produce up to 15 a month. The Russian market is currently dominated by the US-made Robinson R22 and R44 light piston helicopters.

“Using a coaxial main rotor layout instead of the widely used classical layout with a tail rotor means the helicopter is easy to fly for new pilots. The absence of a tail rotor means the helicopter is much safer and if compared to a classical type helicopter it is uses less energy and has less drag,” Berkut’s chief designer Valentin Malkin said.

“These helicopters have no competitor in Russia,” Berkut’s development director Dmitry Rumyantsev said. “They are competitive with foreign helicopters in their technical characteristics, but are around half the price.”

Kaliningrad Bans Vote on Nuclear Plant http://www.themoscowtimes.com/news/article/kaliningrad-bans-vote-on-nuclear-plant/441762.html

08 August 2011The Moscow Times

Kaliningrad residents won’t get a chance to vote on whether they want a nulcear power plant in their backyard.

The Baltic exclave’s legislature has blocked a public referendum on the construction of a nuclear power plant, Interfax reported Monday.

Deputies agreed that a regional referendum was “impossible” because nuclear policy is the prerogative of the federal government, the report said, citing the legislature’s press service.

A representative for the group opposing construction of the Baltic Nuclear Power Plant told Interfax that it would challenge the lawmakers’ decision in court.

Rosatom began work on the plant, which will provide power to Kaliningrad region and neighboring Baltic states, in February 2010.

Local opposition to the construction has been pushing for a referendum on the project since April. A campaign group sent the regional legislature a request to name the date of the referendum in July.

Lithuanian Foreign Minster Audronius Azubalis called for public consultations on construction of the power plant in line with the Espoo Convention on Environmental

Impact Assessment, to which Russia is a signatory, during a meeting with Kaliningrad Governor Nikolai Tsukanov on Sunday.

Read more: http://www.themoscowtimes.com/news/article/kaliningrad-bans-vote-on-nuclear-plant/441762.html#ixzz1UVYEL1PT The Moscow Times

09:53 09/08/2011ALL NEWS

Supreme Court to examine cutting sentence to intelligence colonel

http://www.itar-tass.com/en/c154/200541.html

MOSCOW, August 9 (Itar-Tass) — The Russian Supreme Court will examine an appeal by the defence of foreign intelligence colonel Alexander Poteyev who was sentenced in absentia to a 25-year imprisonment for betraying Russian intelligence officers to the US.

A defence lawyer’s appeal requests the military collegium of the Supreme Court to mitigate the sentence, passed by the Moscow District Military Court.

“I request exonerating him from some episodes with which Poteyev is charged as divulging state secret information, and mitigating his sentence,” he said.

The lawyer noted that he does not request cancelling the sentence, since there are “episodes where the guilt of my client has been proven”. He also specified that he appealed the sentence on his own initiative, since he had never had contacts with Poteyev and represented his interests on an appointment.

On May 27, the military court found Poteyev guilty of a state treason and desertion as well as strapped him of his military rank “colonel” and military decorations, including the Order of Red Star. Besides, the defendant is to pay a fine, totalling his annual allowance.

Pateyev is now outside Russia. His case was heard in absentia and in camera, since materials, received by the court, had the “secret” code.

It follows from the court judgement that Poteyev committed a grave crime, qualified as a state treason, including a conveyance of state secret information to a foreign state for over ten years. Exposure of Russian intelligence officers was possible only over the

betrayal of Poteyev who had an access to all materials of a section of the Foreign Intelligence Service, office information and knew all agents of his section.

Incidentally, American agents received only that part of information which the colonel lay hands on. Using Poteyev’s information, US secret services learnt a mechanism of financing Russian agents abroad as well as communication channels. Acting deliberately, to the detriment of Russia’s security and ducking his military service, he betrayed secret information about Russian intelligence agents, including Anna Chapman, to unidentified American CIA representatives, inflicting damage to Russian intelligence activities.

Far-right groups on rise in Russia’s Far East - FSB chiefhttp://en.rian.ru/russia/20110809/165640285.html

10:29 09/08/2011

MOSCOW, August 9 (RIA Novosti)

Far-right youth movements in Russia’s Far East are using explosives in a bid to achieve their aims, the head of the Federal Security Service (FSB) said on Tuesday.

FSB chief Alexander Bortnikov’s comments came a week after an explosive device injured a five-year-old girl at a kindergarten in the Russian Far East city of Komsomolsk-na-Amur.

Far-right groups had earlier threatened to plant bombs in places frequented by migrants. A 26-year-old man has since been charged with “terrorism.”

Bortnikov, who is also the head of Russia’s Anti-Terrorism Committee, said the “unprecedented act” proved it was necessary to increase security in schools and kindergartens.

09:04 09/08/2011ALL NEWS

Far East’s anti-terrorist protection not enough

http://www.itar-tass.com/en/c154/200520.html

VLADIVOSTOK, August 9 (Itar-Tass) —— About 60 percent of the Far East’s objects where many people may be are not provided with means of protection from terror crimes,

and the region’s level of anti-terror protection does not answer the requirements for the present situation, Head of Russia’s National anti-terrorist committee /NAC/ Alexander Bortnikov told the committee’s meeting in the Far East, where one of the topics is security of APEC.

In the Far East, there are many crucial and potentially dangerous enterprises, major objects of transport infrastructure and other places where many people may be, he said.

“Despite the work to improve security measures, undertaken by authorities, owners and management of enterprises, the actual level of anti-terror protection does not answer the requirements for the situation in the region,” he said. “Only 40 percent places in the region where many people may be have security equipment, while regional and municipal budgets allocate annually only not more than 15-20 percent of the funds they had planned.”

The committee is concerned about anti-terrorist protection of major retail complexes and markets, Bortnikov siad.

“Though most of them are private, and developing companies make profits there, they still have not provided sufficient security measures,” he explained.

He called for additional attention to organisation of anti-terror measures of transport objects, enterprises with dangerous production cycles, objects and territories for mass events.

“During construction and preparations of objects for the summit, organisation of their anti-terror protection should be controlled permanently by the NAC and the Maritime Territory’s Operative Headquarters,” he said. “It is necessary to see to it that all previous orders and security requirements are followed.”

August 09, 2011 09:24

Fire put out at Mikoyan meat processing plant in Moscowhttp://www.interfax.com/newsinf.asp?id=264530

MOSCOW. Aug 9 (Interfax) - A large-scale fire that broke out at a facility at the Mikoyan meat processing plant in northern Moscow has been put out, a source in law enforcement services told Interfax.

"No one was injured in the fire. The flames had spread over an area of 2,000 meters," the source said.

Sd

(Our editorial staff can be reached at eng.editors@interfax.ru)

August 09, 2011 12:27

Missing cargo plane not yet found in Magadan regionhttp://www.interfax.com/newsinf.asp?id=264585

VLADIVOSTOK. Aug 9 (Interfax) - An aerial operation to search for an Antonov An-12 cargo airplane, which reportedly crashed in Russia's Magadan region, has been unsuccessful.

"The search operations at the possible site of the An-12 plane's crash are taking longer than expected. Visibility in the area is just 180 meters because of heavy fog. Two airplanes and a helicopter working in the area have not been able to find the site of the plane's crash," a spokesman for the Far East branch of the Russian Emergency Situations Ministry told Interfax.

A rescue team has left the village of Omsukchan and is heading to the suspected crash site, he said.

"Vehicles carrying 15 rescuers are en route to the site. They will have to cover some 50 kilometers over the district's complicated terrain in bad weather conditions," the spokesman said.

The pilot of an An-12 cargo airplane en route to Chukotka requested an emergency landing at Magadan's airport after detecting a fire in one of the plane's engines. The plane was 300 kilometers from Magadan when the problem occurred.

tm jv

(Our editorial staff can be reached at eng.editors@interfax.ru)

Russian cargo plane carrying 8 missing: Ministryhttp://www.hindustantimes.com/Russian-cargo-plane-carrying-8-missing-Ministry/Article1-731143.aspx

Agence France-PresseMoscow, August 09, 2011

A Russian cargo plane carrying eight people went missing on Tuesday after requesting emergency landing authorization in far-northern Magadan region, the emergencies ministry said.    "An An-12 plane disappeared from the radars at 0734 Moscow time (0334 GMT) 310 kilometers (192 miles) northeast of Magadan" after requesting emergency landing at the Magadan airport, RIA Novosti news agency quoted a ministry spokesman as saying.    The An-12 is used by both military and civilian organisations. In 2008, nine people died when a similar plane crashed near the city of Chelyabinsk after colliding with power lines.

Plane disappears in Russia's Far East after engine firehttp://en.rian.ru/russia/20110809/165640401.html

10:38 09/08/2011

MOSCOW, August 9 (RIA Novosti)

A plane carrying 11 people disappeared from radars on Tuesday in Russia's Far East after reporting a fuel leak and fire in an engine, emergencies officials said.

The An-12 transport plane, en route from Magadan to Chukotka, disappeared from radars at 07.34 Moscow time (03.34 GMT) some 300 kilometers from its take-off point, an airport spokesperson said.

Witnesses later said they had seen the plane fall to ground. Rescue officials said the plane had most likely crashed near the village of Omsukchan in the Magadan region. A helicopter carrying rescuers is on its way to the scene.

The search operation is being hindered by thick fog, the federal aviation agency Rosaviatsia said.

Another Soviet-made aircraft crasheshttp://www.themoscownews.com/russia/20110809/188911276.html

by Tom Washington at 09/08/2011 11:29

A Soviet-era An-12 cargo plane has apparently crash landed in flames in Russia’s Far Eastern Magadan Region.

The aircraft disappeared from the radar for several minutes on Tuesday morning before it came down to earth and its emergency beacon was picked up.

Emergency services scrambled helicopters to bring help to the scene, 50 km from the village of Omsukchan. The fate of the 11 people on board is not yet known, RIA Novosti reported.

 

Trying to land

The cargo plane left Magadan, bound for Keperveyem on the Chukotka peninsula. Soon after take-off one engine had problems and the captain asked for permission to land before the flight disappeared from the radar.

About 300 km from Magadan a fire broke out and the right engine started leaking fuel. The crew made a number of attempts to return to its starting point but was unable to land due to heavy fog.

 

Crash landing

Witnesses later said they had seen the plane fall to ground, and the emergency beacon was later detected. Two helicopters carrying rescuers are on their way to the scene.

The search operation is being hindered by thick fog, federal aviation agency Rosaviatsia said. The plane is no longer giving off any emergency signal.

“Emergency beacons have gone off twice, there have not been anymore,” the ministry representative said.

 

Other cases

The crash adds to a growing list of Soviet era aircraft accidents. In July an An-24 passenger aircraft crash landed into the Ob river in Siberia, killing 7 of its passengers.

In June earlier a Tu-134 plane crashed while trying to land in bad weather at Petrozavodsk, killing 47 out of 52 on board.

In January another TU-134  caught fire as it took off from Surgut and last December all Tupolev jets were grounded at Domodedovo for aircraft.

President Medvedev has since called for all the Tu-134 to be banned and An-24s to be grounded, prompting concern that there is nothing to replace them.

10:36 09/08/2011ALL NEWS

Seven people killed in mass fight in Dagestan.

http://www.itar-tass.com/en/c154/200584.html

MAKHACHKALA, August 9 (Itar-Tass) — Seven people, including a three-year-old girl, were killed during an exchange of fire between two groups of people in Dagestan’s Untsukul region, a spokesman for the investigation department of the Russian Investigative Committee in Dagestan told ITAR-TASS.

Earlier, the death of six people was reported.

According to investigators, “on Tuesday, at about 01.30 Moscow time, a brawl occurred between two groups of people near a filling station 10 kilometres from the settlement of Untsukul which ended with an exchange of fire, as a result, seven people were killed.” A hunting 7.62-mm calibre rifle Saiga was seized at the site of the incident.

Criminal proceedings were instituted.

Investigation is underway.

Seven killed in brawl, shootout in southern Russiahttp://af.reuters.com/article/worldNews/idAFTRE7780VM20110809

Tue Aug 9, 2011 6:27am GMT

MOSCOW (Reuters) - Seven people were killed in a brawl and shootout between residents of two villages in Russia's restive North Caucasus province of Dagestan early on Tuesday, the state news agency RIA said.

Several people were taken to hospital in the village of Untsukul for treatment after a fight in which two people died, but shooting then broke out between the two sides.

"The number of dead has risen to seven, including a seven- or eight-year-old girl," a regional police officer told RIA. Preliminary information showed the violence was "of a domestic nature," he said.

Interfax news agency said two people were killed in the fight and the others in the shootout.

Dagestan is plagued by corruption, unemployment and poverty which fosters violence and drives youths into the arms of insurgents who are trying to establish an Islamic state in Russia's North Caucasus region.

(Editing by Tim Pearce)

 10:39 09/08/2011ALL NEWS

Krasnoyarsk Territory police tighten security after mass murder

http://www.itar-tass.com/en/c154/200586.html

KRASNOYARSK, August 9 (Itar-Tass) — Krasnoyarsk Territory police tightened security in a number of areas as they launched a manhunt for suspected killers of five people, whose bodies were found on Monday.

Regional police said four people with criminal records were suspected of the commission of the murder. They were identified as Vladimir Sorvin, Nikolai Ageyev, Yevgeny Gagarkin and Vladimir Korolev. Police asked the local resident to report on the suspects' whereabouts by calling the hotline 8 /391/ 245-96-46.

The press service of the Interior Ministry's regional department told Itar-Tass on Tuesday that police had launched a contingency plan of actions near Yeniseisk and Lesosibirsk.

"In the settlements located in the Severo-Yeniseisky and Yeniseisky districts, as well as near the town of Lesosibirsk, police sent details to ensure the safety of the population and advised the local residents about the situation through the mass media. The suspects' photos were sent to all the police stations of the Krasnoyarsk Territory," the press service said.

The Interior Ministry department is interacting with line police in joint measures. Police blocked riverboat-, ferry-, bus-, and railway terminals.

The police officers and commanders of the military units in the area have been informed about the murder and the search for the criminals.

Taking part in the manhunt are district police and special task force police units.

The operation is led by regional police chief Vadim Antonov and director of the regional department of the Investigative Committee (SK) Igor Napalkov.

On Monday, the body of a watchman was found in a builders' cabin 2.5 kilometers from the Yeniseisk-Yepishchevo road, Severo-Yeniseisky district. He had gunshot wounds in the head and the stomach.

In another cabin, two badly burnt bodies were found. Police said it was not possible to immediately identify the victims. Two more bodies were found in an abandoned mine and a gully. The last two victims had worked as loggers.

Criminal proceedings were opened under the Criminal Code article over "the murder of two or more persons."

Russian scientists to develop space rover to study the Sunhttp://channel6newsonline.com/2011/08/russian-scientists-to-develop-space-rover-to-study-the-sun/

8 August 2011

MOSCOW, RUSSIA (BNO NEWS) -- Russian scientists are developing a space rover which will conduct studies of the Sun from a closer distance than ever before, the Russian academy of Sciences announced.

The Institute was cited by the Russian news agency Itar-Tass as saying that, along with the country's Federal Space Agency, it will be making final decisions on the rover platform and innards before 2012.

The institute explained that the space rover, which is called Interheliozond, is supposed to fly around the Sun along an orbit smaller than that of Mercury, which is the innermost planet in our solar system. The mission is expected to face extreme difficulties, but it is also expected to open up new perspectives.

As part of the project, the institute has developed a set of three telescopes - a coronagraph, a high-energy X-ray telescope, and an optical heliosphere telescope - which in total weigh approximately 40 kilograms (88.18 pounds).

The institute underlined the importance of the weight, as it is key for the delivery of the payload to orbit. New technologies and materials, such as instruments that used to weigh about 50 kilograms (110 pounds), are changing scientific developments, as these components now weigh from five to ten kilograms (11 to 22 pounds). However, scientists are now facing the issue of developing the rover with the appropriate insulation.

"Practically everything the rover telescopes will see will be new to mankind, such as the Sun's corona observed with the resolution of about 300 kilometers (186 miles)," said Sergei Bogachev, the leading researcher from the institute's Sun X-ray astronomy laboratory.

"The rover will study polar areas of the Sun for the first time ever," he added, as cited by Itar-Tass. "We will take a look at the interplanetary magnetic field, which, in the opinion of modern scientists, has the shape of a spiral centered on the Sun. We will also learn the real trajectory of Sun mass ejections towards the Earth."

The institute noted that the prospective orbit of Interheliozond will be under a hard impact from the Sun, and temperatures will near 600 degrees Celsius (1112 degrees Fahrenheit). Under such temperatures, many metals melt or become flexible, making it of extreme importance to protect key elements of telescopes from the heat.

Furthermore, the conditions will have high levels of radiation and plasma around the rover will be different, as it will have different speed and density of charged particles in the solar wind. These conditions may lead to gradual decay of the majority of known materials.

As a result, the institute underlined the importance of choosing the correct materials and understanding of their response to high temperatures in order for the project to succeed. Bogachev noted that "pioneer projects" such as the Interheliozond presents high risks, but he emphasized that they are also "vital for science."

(Copyright 2011 by BNO News B.V. All rights reserved. Info: sales@bnonews.com.)

Moscow to Spend $46 Billion on Construction Over 2012-2014http://www.bloomberg.com/news/2011-08-09/moscow-to-spend-46-billion-on-construction-over-2012-2014.html

QBy Ilya Khrennikov - Aug 9, 2011 8:42 AM GMT+0200

Moscow plans to spend 1.35 trillion rubles ($46 billion) on construction from 2012 to 2014, according to a plan published on a City Hall website.

Spending may reach $16.4 billion in 2014, up a third from this year’s level, Vedomosti said today, adding that Moscow construction companies may lack the capacity to build that much.

The program includes roads, infrastructure, social objectives and housing, according to the City Hall plan.

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

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Russian Press at a Glance, Tuesday, August 9, 2011http://en.rian.ru/papers/20110809/165639366.html

08:57 09/08/2011

POLITICS

Russian Investigative Committee spokesman Vladimir Markin said Russia has sent copies of criminal case materials on the 2008 South Ossetia war to the International Criminal Court in The Hague. Georgia, in turn, wants to bring Russia's leadership to account.

(Kommersant)

Standard & Poor's decision to downgrade the United States credit rating caused a political turmoil in America. Washington admits that the move was an unprecedented blow to the U.S. image.

(Kommersant)

BUSINESS & ECONOMY

Russian stocks followed international markets in a tailspin Monday after a U.S. credit downgrade stoked a huge equity sell-off and talk of a global economic slowdown.

(Moscow Times)

Russia could borrow up to $900 million per year from development banks and $300 million from international financial organizations in 2012-14, the Finance Ministry said in its draft debt policy outline for the period, posted on its web site.

(Moscow Times, Rossiiskaya Gazeta)

Standard & Poor's decision to downgrade the U.S. credit rating to AA+ caused a stampede of investors from risky assets. The leading western indices lost 2.8-5% over the day, while Russia's MICEX and RTS plummeted 5.5-7.7%.

(Kommersant)

The growth of new car sales in Russia dropped to 27% in July from 40% in June.

(Kommersant)

The Finance Ministry warned Russian regions that the volume of federal budget loans they may count on will sharply drop from 2012.

(Vedomosti)

SOCIETY

About 50 masked men attacked a group of about 15 architectural preservationists who tried to stop the demolition of a 19th-century building in downtown Moscow on Monday, activists said.

(Moscow Times)

Russia's Supreme Court drafted a new court practice review that could substantially soften the legal practice.

(Rossiiskaya Gazeta)

WORLD

A Ukrainian judge on Monday rejected requests by former Prime Minister Yulia Tymoshenko's lawyers to free her from police detention during her trial on a charge of abuse of office.

(Moscow Times, Vedomosti)

The Death of a Journalhttp://russiaprofile.org/culture_living/42637.html

Who Is Cracking Down on LiveJournal?

By Svetlana Kononova Special to Russia Profile 08/08/2011

LiveJournal, the largest and most popular blogging network in Russia, was knocked offline for several days at the end of July due to DDoS attacks, the platform’s owner SUP reported. This is the third attack on LiveJournal since the beginning of the year – an apparent sign that somebody is trying to limit its popularity and impact on public opinion.

Experts and users have conflicting theories on the recent attacks and on where the pressure against the blogging platform is coming from.

When LiveJournal was crippled by hacking attacks last month, theories quickly developed as to who was behind the sabotage. For some experts, such as Ilya Sachkov, the general director of Group-IB, a Moscow-based company that specializes in investigating computer crime, the scale of the attacks was significant and indicated that it was the work of well-off and professional saboteurs. “The average cost of DDoS attacks varies and may reach $1,500 a day. But in some cases, the cost can reach record levels of $5,000 per day,” Sachkov said, adding that costs depend on the quality of DDoS services and the difficulty of launching an attack.

DDoS attacks block access to Web sites and halt their activities by overloading them with requests sent from a network of computers or a “botnet,” controlled by a virus distributed by cyber-criminals. When the target network is overloaded, the site shuts down. “Attacks on such a popular platform as LiveJournal lead to a wide public response and increased attention from law-enforcers. Therefore, it requires highly professional perpetrators who can commit cyber-crimes for a long time without being punished,” Sachkov said.

In terms of the motivation behind the attacks, three main theories have emerged: political interference; internal problems at SUP; and a battle for control of the blogging market. Of these, many users and experts are pointing to political interference as the most likely.  LiveJournal plays the role of independent mass media in modern Russia, where television is fully controlled by the authorities. More than 32 million Internet users have accounts on LiveJournal, of which around two million blogs are updated regularly.

LiveJournal users, unlike TV audiences, are well-known for their skepticism toward the authorities. Used predominantly by the educated middle or aspiring middle-class, LiveJournal is often seen as the “cradle” of civil society. Protest movements such as the blue bucket flash-mobs against “migalki” – the blue flashing lights that allow high-ranking officials to flout basic traffic rules; the defenders of the Khimki Forest protesting against construction of a new Moscow to St. Petersburg highway; and pregnant women opposing diminishing maternity benefits have all used the platform to share information and galvanize support.

Previous attacks add weight to the theory that attempts to bring the site down are politically motivated. On April 5, Maria Garnaeva, an expert at antivirus company Kaspersky Lab, published data from the company’s monitoring of LiveJournal. “The first attack on LiveJournal was implemented on March 24. The owners of a botnet initiated an attack on Alexei Navalny’s [a leading anti-corruption activist] blog. On March 26, the bots received instructions to initiate attacks on the Web site of another well-known champion in the fight against corruption – Rospil.info,” she wrote.

Garnaeva also published a list of blogs which were attacked on April 4, all of which have a large Internet audience. Beyond Navalny, this list includes Internet-guru Anton Nossik, writer Tatiana Tolstaya, designer Artemy Lebedev, photographer Ilya Varlamov,

journalist Bozhena Rynska and a few dozen other popular bloggers. Most of those on the list are famous for their criticism or mocking of the authorities and not one is either a member of United Russia or a governmental official.

But some experts believe that internal problems at SUP are playing a decisive role. Writer Alexei Exler said he believes in a theory of “crooked hands and unprofessional management.” Meanwhile, Eugene Kaspersky, the head of Kaspersky Lab and a leading Internet security expert, said that “the patient is closer to DeadJournal than LiveJournal. It seems the problems are clinical. And in order to ‘straighten itself out,’ LiveJournal will not only need to upgrade its technical staff, but also to clean out the rot. It’s hard to believe that this will happen and problems with access to LiveJournal will probably happen again from time to time,” he wrote in his blog, relocating his posts from LiveJournal to his own personal Web site.

The third hypothesis over the attacks is that they were an attempt to expose problems within LiveJournal in order to weaken bloggers’ loyalty to the platform and lure them to its competitors in the market. While many popular bloggers created accounts on alternative platforms in the wake of LiveJournal’s problems, other large social networks like Facebook and VKontakte are not as convenient for blogging. Twitter gives users limited space, while Google+ requires users to post under their real names. Most top Russian bloggers still consider LiveJournal to be their “home.”

But combating the attacks, which can be managed from anywhere in the world, remains a challenge, beginning with identifying the perpetrators. Security experts have different ways to investigate DDoS attacks and identify cyber-criminals, explained Sachkov. “One method is ‘pattern.’ Every botnet is a set of computers with certain characteristics such as an IP-address and an operating system. These characteristics are constantly changing, but there is a mathematical model which allows us to calculate these changes and compare them. ‘Patterns’ are like unique fingerprints that include different geographical and technical data,” Sachkov said. “The other method is the ‘Honey Pot.’ This is a form of bait, which is installed on a controlled computer or virtual machine. When a virus infects the computer it is possible to monitor its activity: the instructions it receives, from where and who else it attacks.”

But even if caught, prosecutors may find it hard to bring the perpetrators to justice. Irina Levova, a leading analyst at the Russian Association of Electronic Communication (RAEC), said that if identified, the perpetrators of DDoS attacks on LiveJournal may be punished under Articles 272 and 273 of the Criminal Code, which cover “Illegal access to computer information” and “Creating, using and distributing malicious programs.” She believes current legislation is too lenient toward cyber criminals, allowing them to commit crimes repeatedly and inflict expensive damage. “From the point of view of members of the Committee against Cyber-Crime at the RAEC, the current Criminal Code is too kind to cyber-criminals. Work on amendments is a very difficult task and should be done via the joint efforts of Internet companies, law enforcement representatives and computer security experts,” Levova concluded.

Fears of dissolutionhttp://rt.com/politics/press/rossijskaya-gazeta/russia-fear-collapse-federation/en/

Published: 9 August, 2011, 05:19Edited: 9 August, 2011, 05:22

By Leonid Radzikhovsky

The closer the elections, the more actively politicians will be marketing their goods.  Two products are being offered: far-reaching promises and fear. In highest demand by the consumer is fear of “Russia’s collapse.”  

Clearly, after the 20th century, the time between 1917 and 1991, people are likely to fear just about anything. Plus the semi-acknowledged guilt complex regarding the vast, underdeveloped territory (we’re not developing it, but feel extremely bad about it at the same time). Therefore, today, the idea of a possible (“imminent”) “collapse of Russia” is just about as prevalent in society as was “so long as there’s no war” in the 1960-1970s. Today, the fear of war has diminished – there’s no one to fight… But the place where the nation’s fears reside is never empty. Hence the latest phobia of “Russia’s collapse.”

Politicians are no fools, and are able to play upon public sentiments: “You want fear? We’ve got it!”

Thus, they rush to explain (“hint”) that Russia is crumbling under the current government. Or, the other way around – with a change of leadership, Russia will fall apart. And the foregone conclusion, on which the conditions of the problem are focused: for the sake of saving Russia, leadership must be immediately replaced/preserved; therefore, vote for… [insert party name here].

They say that generals are getting ready for wars past. Politicians are preparing us for old crises by applying the collapse of the Russian Empire or the Soviet Union to today’s Russian realities. “Russia’s collapse” is a sustainable invocation that suppresses reason and evokes fear and emotion. But if one leaves emotions aside and looks at this proposal in detail, then it becomes evident that we are faced with just a frightening fictional tale.

The first version of collapse: the Russian Federation loses one or several districts, republics, etc. The Russian Constitution simply does not provision the possibility of “a withdrawal from Russia.” “The Russian Federation ensures integrity and inviolability of its territory” (The Constitution, Ch. 1 Art. 4). People have little interest in such things. But being ignorant of the laws does not free a person from the obligation to comply with them. And because there is no legal way to withdraw from the Russian Federation,

withdrawal from Russia’s territorial composition – unlike a withdrawal from the composition of the Soviet Union – would be in breach of law.       

A withdrawal from Russia is not only legally impossible, but also geopolitically. An overwhelming majority of districts and republics of the Russian Federation are surrounded by the Russian Federation. Where could they “go to” from Russia? Those that do have an exterior border, generally share that border with the CIS (Belarus, Ukraine, Kazakhstan) – i.e. it’s still “not quite” a border. In any event, the separatists should not count on these countries’ support. And finally, there are a number of districts in the Far East that border with the People’s Republic of China. But China, too, will not want to undermine relations with the Russian Federation by supporting the separatists, and especially go to war with Russia in order to adjoin these territories: everything that China needs it is able to purchase from Russia, while a war will be more costly, even in purely financial terms. This is especially true if we consider that a war with nuclear Russia is also a question of health – which cannot be bought.

So, the potential separatists cannot rely on the law and international law, have nowhere to go, and cannot count on the support of foreign states. What option do they have? Bold violence – a mosquito attacks the elephant. There is the option of facing the fear and risks of fighting with Moscow and turning their territories into a pile of independent stones like Grozny in the 1990s.

Will the local elites agree to this? Will that solve their problems? Will the local residents agree?    Not to mention that an overwhelming majority of regions are subsidized accordingly, and being “independent of the Russian budget” will not particularly play to their advantage. If we look at the sponsor regions – Tyumen, Khanty-Mansiysk Autonomous Area, etc., then it’s highly unlikely that they would want to turn their thriving territory into ruins! In fact, Russians – the majority of the population there – like to complain about Moscow, but would not want to secede from Russia even in their worst nightmare. 

Even separatism in the North Caucasus, which was in fact prevalent in the 1990s, has now waned. There are terrorists, there are bandits – but they are fighting for the distribution of the money flows from Moscow, and not for the separation from these flows! 

So, as long as Russia has central authority, regions will not be able to secede. And that is so evident that no one will seriously try tying the noose around their neck. 

That leaves us with the second option: The central power itself disappears, resulting in Russia’s total collapse. There is no judicially legitimate self-dissolution, like that of the Bialowieza Forest, on the horizon. Unlike the Soviet Union, Russia is not a union of separate states. This means a complete breakdown based on the 1917 model, and not that of 1991, with the violation of all laws.  

Of course, no one in the world will support this. Contrary to the myth that the West sleeps and sees the collapse of Russia, much hated by these Russophobes, the West (and East) will be horrified by the possibility of a nuclear power’s collapse. They were even in shock from the collapse of the Soviet Union, but then it was at least possible to keep all of the nuclear weapons in Russia – and the world sighed with relief.

If there is a chain reaction among separatists in Russia, where should the nuclear warheads be stored? Who will get the factories producing these missiles and nuclear warheads? Will it be the regional warlords or the raging crowd?! Who will be in charge of the nuclear fleet? Perhaps no one, as it may declare “independence” and engage in unrestricted piracy. And what to do with the air force and the paratroopers?    

Then, a complete economic chaos will reign on the “former Russian” territory. Who will get Gazprom, Sberbank, the Russian Railways, and Rosneft – companies where the majority stake is held by the government of the Russian Federation? Economic turmoil means the flight of millions, dozens of millions of people from the “former territories of Russia” – but where? And hunger for those who did not manage to escape.  

In short, that will indeed mean a repeat of 1917-1920, only with nuclear warheads. In other words, without any metaphors: “complete and irreversible ruin” of the Russian government, of the Russian people, of the Russian economy and culture – and a direct threat to the existence of humanity.  

Such would be the obvious results of this cataclysm. But what would be the reason?

For Russia to collapse in 1917, it required an illegitimate rise to power of extremists who liquidated private property and provoked a civil war.  

Are there extremists today who could take over Moscow and create conditions that make it impossible for the peoples and citizens of Russia to coexist? Such legitimate parties do not exist. Then who? Nazis? Anarchists? Who else? Simply psychos?

True, no one has yet managed to establish the limit of human foolishness. But isolated fanatics are incapable of taking power – that is why we have the army and the special forces. Meanwhile, the Russian people as a whole are not fixated on the craze of collective suicide (I won’t even mention the elites).  

Thus, I consider all talk about the collapse (or self-dissolution) of Russia to be a malicious “lie” that does not threaten us. However, further degradation of the basic social institutions – healthcare, education and the state apparatus – do. But why think about that?! It’s easier and more effective to make predictions about the Apocalypse – as long as it does not require any action.

Can Russia Survive Through 2020?Tuesday, 9 August 2011

http://www.turkishweekly.net/news/121260/can-russia-survive-through-2020-.html

Strategy 2020 -- the question of where Russia will be in 2020 -- hangs in the air. There are a variety of scenarios being offered by leading political scientists and other analysts, but one thing is clear: There will be no miracles in the next nine years.

The prospects for a country mired in archaic institutions, an oil- and gas-dependent economy, systemic corruption, unprotected property rights, corrupt courts, fraudulent elections and an apathetic population can only be dim at best.

I’m almost certain that Russia will not be able to survive in its current borders through 2020. This is not an exaggerated, sensational prognosis taken from the blogs of radical liberals or anarchists, but a clear-headed, objective analysis based on the Kremlin’s flawed policies over the past decade.

This prediction is not intended to fan the flames of separatism, extremism or crazy Zionist conspiracy theories. Rather, this is the umpteenth attempt to sound the alarm and draw public attention to the severity of Russia’s problems. In this way, we can help prevent the country from collapsing.

Today, Prime Minister Vladimir Putin is held hostage by a political dead end that he himself created, very similar to the trap former Soviet leader Leonid Brezhnev set for himself and the country.

Even if we assume for a second that Putin wanted to radically modernize and liberalize his system — or even retire if he so desired — he would not be allowed to do so by the elite who surround him.

This is the elite who believe that the government is their personal property. After betraying his role as the guarantor of the Constitution, Putin has effectively become a guarantor of corruption — guaranteeing the financial well-being of millions of bureaucrats, government employees and well-connected businesspeople.

Keeping Putin’s political and business elite in power until 2020 could become one of the main reasons for the country’s collapse. A corrupt bureaucracy, by definition, is incapable of instituting economic and political reforms.

And what about society? Most Russian adults do not vote, largely because they have lost faith in any hope that post-Soviet elections can be pluralistic, free and fair.

The one factor that has kept middle-class Russians distracted from politics is their high level of consumption. As long as they have money to spend, they will have much more interest in consumer goods than who is sitting in the State

Duma, local legislatures, Kremlin or White House — or their policies. But as soon as this relative prosperity drops, civil protest will surely awaken.

Any student of economics can name a dozen factors that carry a risk of economic collapse. Among them are the high dependence on natural resources; low productivity; an ineffective, corrupt, bloated and overly centralized state apparatus; dependent courts; technological backwardness; and an unattractive investment climate. These factors, among others, generate a vicious cycle of poverty and excludes the implementation of a long-term development strategy for the country.

It also guarantees a flight of capital, as well as Russia’s most talented and innovative people to freer and more open societies.

The key factor that will determine Russia’s collapse will be the price of oil. Once few years ago, a balanced budget required only $30 per barrel of oil. This year, it has jumped to $115 because of higher government spending, waste and corruption.

Next year, the figure will increase even further to $125 per barrel. If the price of oil drops to $90 a barrel, this will be the beginning of a serious economic crisis for Russia.

The stabilization fund might be able to hold the budget over for a couple of years, but inevitably the state will have to cut back on social programs. These cuts in social spending will only exacerbate public discontent. It may also provoke self-sufficient regions to rethink their loyalty to Moscow.

Unfortunately, only a severe crisis can produce the shock needed to spark change in Russia. We, as concerned and law-abiding citizens, must develop peaceful alternatives to existing policies and wait for the right moment when the politically impossible becomes the politically inevitable.

National Economic Trends

August 09, 2011 10:15

Ruble plummets against dollar, eurohttp://www.interfax.com/newsinf.asp?id=264543

MOSCOW. Aug 9 (Interfax) - The ruble continues to plummet against the dollar and euro, and the dual currency basket has hit a 2011 high amid the ongoing turmoil in the global markets.

The dollar soared 32 kopecks to from the previous closing level to 29.24-29.31 rubles/$1 in Tom deals on the Moscow Interbank Currency Exchange (MICEX) in the first few minutes. This is 75 kopecks above today's official rate.

The euro opened at 41.7 rubles/EUR1, which is 55 kopecks above the previous closing level and 75 above today's official rate.

The dual currency basket ($0.55 and EUR 0.45) opened the day at 34.85-34.9 rubles, or 40-45 kopecks above its previous closing value.

Pr

(Our editorial staff can be reached at eng.editors@interfax.ru)

Russian ruble drops 3 pct against dollar, stocks down as falling oil prices weigh on economyhttp://www.washingtonpost.com/business/markets/russian-ruble-drops-3-pct-against-us-dollar-hit-by-weak-oil-us-debt-downgrade/2011/08/09/gIQANuvx3I_story.html

By Associated Press, Updated: Tuesday, August 9, 10:04 AM

MOSCOW — The Russian ruble has lost nearly 3 percent against the dollar on the back of the U.S. debt downgrade and a sharp fall in oil prices.

The Russian currency on Tuesday dropped by 0.8 ruble to 29.4 against the U.S. dollar less than two hours into the trading day. The ruble also lost 2.4 percent against the euro.

Russian stocks are falling again, a day after the MICEX benchmark lost 5.5 percent, its biggest drop since 2009.

The MICEX was down 1.7 percent at 1,474 points.

Russia’s economy is suffering from the sharp fall in oil prices that has accompanied the global stock market rout. Oil is the backbone of the Russian economy.

Oil prices tumbled to their lowest in nearly a year to below $78 a barrel on Tuesday.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Russian markets plunge again in wake of U.S. downgradehttp://en.rian.ru/business/20110809/165640712.html

11:07 09/08/2011

MOSCOW, August 9 (RIA Novosti)

The Russian stock markets suffered a second day of losses at Tuesday's open, following big falls on Monday following rating agency Standard & Poor's Friday cut of the U.S. top-tier AAA rating with a negative outlook.

The dollar-denominated RTS stock exchange index fell 4.23 percent in the first 30 minutes of trading on Tuesday past the psychologically important 1,600 points level to 1,596.99 after a dramatic plunge of 7.84 percent on Monday's close to 1,657.77 for the first time since December 10, 2010.

The ruble-denominated MICEX index opened 2.62 percent lower on Tuesday to 1,462.31 points after a 5.5 percent slump on Monday.

The Russian ruble continued its slide on Tuesday as it fell by 28 kopecks against the U.S. dollar to 29.30 and by 63 kopecks against the euro to 41.75.

The value of the bi-currency basket, comprising $0.55 and 0.45 euros, at 10:03 a.m. Moscow time on Tuesday rose by 43 kopecks to 34.90 rubles.

Global stocks have been tumbling since late Friday when S&P took the decision to cut the U.S. top rating by one notch to AA-plus over concerns about America's growing budget deficit.

Russia ’s foreign trade soars 36.1 percent to $386.9bn http://www.blackseagrain.net/photo/russia2019s-foreign-trade-soars-36.1-percent-to-386.9bn

Foreign trade turnover of Russia in the first half of 2011 rose by 36.1% compared with the same period of last year, to USD 386.9 billion (including trade with Belarus and Kazakhstan), the Federal Customs Service said.

In the reporting period, trade volume with foreign countries reached $ 326.9 billion, a 34.4 percent growth, with the CIS countries – $ 60 billion (+46.1%).

The trade balance showed a surplus in the amount of $ 107 billion, up $ 12.6 billion more

than in H1, 2010. In the trade with foreign countries the balance equaled $ 89.6 billion (an increase of $ 7.4 billion), with the CIS countries - $ 17.4 billion (an increase of $ 5.2 billion).

Six-month volume of Russian exports totaled $246, 9 billion, a 30.4 percent gain as compared with the six months of 2010: exports to foreign countries - $ 208.2 billion (up 28%), to the CIS countries - $ 38.7 billion (+ 45.3 %). 

portnews

Russian government debt takes hit http://rt.com/business/news/russian-government-debt-market/

Published: 8 August, 2011, 22:06Edited: 8 August, 2011, 22:34

Russia’s government debt market took a hit from the instability on global fixed income markets as the ECB confirmed buying of Spanish and Italian long term sovereigns, and with the S&P downgrade of U.S. debt also weighing on sentiment.

The news that the ECB had stepped into the market in order to support demand for Italian and Spanish sovereign issues, as expected brought yields tumbling on Monday morning.Italian 10 year bonds fell more than 60 bp to 5.40%, and Spanish 10 years shed 79 bp to 5.25%, well below the 6% at which both were trading for much of last week.But the prospect of German support for the ECB move saw the yield on 10 year Bunds climb.

Also as expected, the downgrade of U.S. debt by Standard & Poor’s, saw a flight to the relative safety of T-Bills, despite the downgrade, with the considerably more volatile global outlook leaving little alternatives as havens, which saw yields on U.S. 10 years fall

In Russia the turmoil on global markets and the currency volatility which has broken over the last week had local government debt players looking only at how big the selloff would be.With the Russian rouble posting its biggest one day loss against the bi currency basket since May last year to lose 77 kopecks, to make it a 4.5% loss over the last 5 sessions – the biggest in more than 2 years. That set the scene for government debt to decrease from 20 to 70 bp across the yield curve, with the 10 year down 43bp as the Yield to Maturity climbed to 7.82%, and the 6 year series down 70bp with the YtM rising to 7.67%.

Despite the ugly day’s trade analysts say the direct impact of events in the U.S. is fairly minimal, with the main drivers of the days selloff coming from currency movements.

Uralsib Capital analyst, Dmitry Dudkin says the capacity for Russia to service its borrowing needs domestically means it is to some extent protected.

“The U.S. market of for Treasuries is quite stable, so Russia’s market of sovereign debt can go down a bit, but this move won’t be deep. Also, Russia’s Ministry of Finance doesn’t have any huge deals planned with dollar denominated obligations in the near future, with maybe a Eurobond issue possible in 2012. I don’t think Russian economy will need to borrow soon, but even if it will, domestic market will be the main lender.”

Egor Fyodorov, Senior Credit Analyst at ING Bank Moscow also noted that the daily outcome reflected a fairly emotional day in debt markets, despite having had time to brace for the impact of the weekends announcements by the ECB and S&P, with stabilization likely on the short term, barring a major external shock.

“I don’t think Russian investors will change their strategies neither short nor long term. And most of other markets haven’t reacted heavily, except Asian bonds having gone down. First, it happened because investors were ready for such a scenario and took that into account working out their investment plans. And second there’s no much alternative to American treasuries for global investment funds. The markets have been very emotional, which is in their nature, in fact. But, I think, already by the end of this week the situation will have stabilized.”

Dudkin noted that the support for the Italian sovereign market, the worlds third largest, was potentially inflationary and could have an upside for Russia transmitted through commodity prices.

“Historically, Europe has always followed a moderate budget policy and supported a strong euro. So this ECB move was rather exceptional, and if the Bank continues buying Italy’s debt further, is in fact the World’s 3rd market of sovereign bonds, so it will add to inflation in the Eurozone. This in turn will drive commodity markets higher, most importantly for Russia – in oil. So, the overall effect for Russia could be quite positive. ”

Source ING: Bloomberg

Over the course of this year Russian government debt has been solid against a volatile global backdrop, with a decades worth of generally tight fiscal policy and strong oil revenues, backing Russia’s debt position.Uralsib’s Dudkin believes that despite the prospect of increased outlays over the course of the coming year, commitments to rein in the budget deficit will buoy debt markets.

“This years performance is mainly due to a balanced budget policy in Russia, with the Government keeping its expenses under control. But in 2012, the year of elections, military expenses and some social spending will go up. Anyway, according to Russia’s Finance Minister Alexey Kudrin, who is always conservative, the government debt won’t exceed 3% of GDP in 2012.”

That sentiment was echoed by ING’s Fedorov who noted “After the crisis in 1998 Russian authorities just put balancing the level of Government debt in focus and was pretty careful with budget spending,” adding that once the key immediate driver is the rouble, with a debt rebound when crude prices and the rouble stabilize.

“I think the negative price trend will follow the rouble on FX markets, but when the rouble and Brent crude stabilise it will be strong signal to buy.”

A Grain of Discomforthttp://russiaprofile.org/business/42577.html

Russia's Bumper Wheat Harvest Gives Little Cause for CelebrationBy Tai Adelaja Russia Profile 08/08/2011

The great news from Russia this summer is that last year’s terrible drought has given way to this year's bumper harvests, with reports of overflowing grain silos in the country’s main wheat producing regions. Alas, Russian farmers will not be celebrating, because this year’s record harvest has been creating serious problems for wheat farmers, and “it does not bring any happiness to anyone,” Arkady Zlochevsky, the president of the Russian Grain Union, said on Wednesday. Over the past two weeks, the good harvest has triggered a 20 percent drop in domestic grain prices, leaving producers with very narrow profit margins, Zlochevsky said.

Buoyed by predictions of bumper wheat harvests this year, Russian President Dmitry Medvedev congratulated grain farmers last month on the start of the harvesting campaign and assured them that the grain market has finally stabilized. “About 20 million tons of grain had been harvested by the middle of July, and the weather is quite favorable,” Medvedev was quoted by Itar-Tass as telling a meeting on the situation on the grain market in Michurinsk, in the Tambov Region on July 25. “If you keep this pace, we will get the expected 90 million tons and even slightly more. We will not only meet our own grain needs this year, but we can also return to the question of boosting Russia’s export potential.”

This year’s grain harvests could bring in anything from 87 million tons to 94 million tons of grain against 60.9 million tons last year, according to various estimates. However, in many regions where farmers have started wheat harvesting, the price of grain has dropped considerably, Zlochevsky said. Fourth-class milling wheat now costs around 4,700 rubles ($156) to 4,800 ($160) rubles per ton, while a ton of wheat used in livestock feed now costs 4,000 rubles ($133). If the trend continues, he said, the cost of grain this year will go off-scale for 4,000 rubles per ton. "Such price drop dynamics will very soon leave farmers unable to cover even their cost of production," Zlochevsky said.

Adding to a crisis amidst plenty are other pesky problems, such as outdated technology and obsolete farm equipment. Farm tractors and combines are all stretched to their limits in the face of bumper harvests, Zlochevsky said. According to his estimates, the workload on a single farm tractor in Russia is 330 hectares per season, compared to around 150 hectares in the United States and Europe. "We run the risk of incurring serious [financial] losses even in the midst of wheat harvesting,” Zlochevsky said. “Neither the growth in world grain prices nor the increase in grain exports can stabilize falling domestic prices.”

Russia has exported over two million tons of grain since the government lifted a temporary embargo on exports on July 1. However, Russian grain exporters have had to resort to dumping, selling their grain at a $30 discount to European wheat in order to regain the market positions lost when the Kremlin banned shipments last year after a devastating drought. Wheat futures fell for three straight days last week on lingering concerns that cheaper grain from Russia will erode demand for supplies from the United States, Bloomberg reported. “We never expected the price difference to be so high,” Zlochevsky complained. “We were hoping that price difference per ton would not exceed five dollars at the most.”

Zlochevsky’s lament is of little consolation to the world’s top grain exporter, the United States, which has been feeling the heat as Russia and Romania sold a combined 240,000 metric tons last week to Egypt, the world’s largest wheat importer, at $261.94 and $262.50 a ton, undercutting the U.S. rate of $275.30 per ton. Zlochevsky estimates that Russia has the potential to export $4 billion worth of grain this year (or between 20 million and 25 million tons), which could position Russia as one of the three largest grain exporters in the world. However, this also comes at a great price: profits on the back of higher grain exports are going to grain exporters rather than farmers, Zlochevsky said.

Nor have falling domestic wheat prices given Russian consumers a reason to smile. Falling domestic wheat prices have not yielded direct benefits to Russian consumers in the forms of lower bread prices, Zlochevsky said. "The chance that the price of bread will go down even by a dime is remote," Zlochevsky said. “Reduction in grain prices in Russia has never been accompanied by a parallel reduction in the prices for bread.” And while the average profit margin for a wheat exporter in Russia could sometimes reach $30 per ton, he said, “this is of little significance to Russian farmers because domestic prices continue to fall.”

Russian wheat growers should certainly brace themselves for a tough time this season, said Andrei Sizov, the managing director of Sovecon, a Moscow-based agriculture consultancy. "However, the main problem is that the government is yet to come up with a mechanism of interventions to stabilize the grain market, even though preparatory work on it was supposed to have started a month ago.” In the absence of a proactive response from the government, however, the Russian Grain Union has devised a scheme to create a sort of a “cereal pawnshop,” where the government could hold onto grain as collateral, Gazeta.ru wrote on Friday. According to the scheme, the government would provide funds to the state-owned United Grain Company to buy grain from farmers with a right of redemption before an agreed date. This should allow farmers to deliver grain to regulated grain elevator stores and buy back at the same price when market conditions improve. The Grain Union estimates that the government could buy up to two million tons using such a scheme, in addition to 6.7 million tons of grain the government currently holds as an intervention fund.

Russia: Back to oil's basics

http://www.bne.eu/dispatch_text16323

Renaissance Capital August 8, 2011

How important is oil to Russia? We have previously argued that Russia would not be immune to an external shock, such as a US sovereign default or rating downgrade. However, given that the US's long-term credit downgrade by S&P is now translating into fears of imminent downgrades in global

growth, questions are increasingly being asked about how oil prices will fare in such an environment. We offer quantitative answers to how an already materialising decline in oil prices will affect Russia.

One-third of the variation in Russian GDP can be explained by oil To investigate this issue, we use statistical methods to estimate the relationship between Russia's GDP, current account and fiscal position, the rouble/dollar exchange rate and the Brent oil price. Figure 1 shows the relative importance for Russian GDP of a variation in the rest of the variables for 10 consecutive quarters. While Russian GDP's own random innovation accounts for around half its variability, the oil price plays a significant role in explaining the variation in Russia's output (accounting for about one-third of it).

A $15/bbl decline in oil prices lowers Russia's GDP growth by a maximum of 1.2% Figure 2 shows the response of Russia's GDP growth to a one-standard-deviation decline in the Brent oil price (equal to $15/bbl). The model indicates that economic activity in Russia responds negatively and the impact of the shock is maximised after three quarters, when the shock shaves close to 1.2% off growth. The average impact over four quarters is about 70 bpts.

Our scenario analyses demonstrate that, in addition to GDP, the rouble could suffer significantly on lower oil prices We further explore how our baseline 2011 scenario (at an oil price of $110/bbl) will vary given one- and two-standard-deviation falls in the oil price, corresponding respectively to $15/bbl and $30/bbl declines in oil prices. In the worst-case scenario, GDP growth may fall to 3.4% while the fiscal balance may deteriorate to 1.8% of GDP. The effect on the current account is minimal, due to the bigger transmission lags. However, the currency effect could be quite substantial, with the rouble/dollar exchange rate rising to 30.2 by the year-end, on our estimates.

These estimated responses should be interpreted only as a lower bound for the downside effectsThis is because our model does not capture the possible non-linear effects of a more pronounced decline in oil prices, as these usually accelerate the adverse impacts of shocks.

Main risk remains the oil price

http://www.bne.eu/dispatch_text16323

CitiAugust 8, 2011

Given the turbulence in global financial markets we take a preliminary look at our commodity price scenarios for Russia

Russia's government debt-to-GDP remains exceptionally low at under 10% of GDP and the 2011 deficit is likely to come under 2% if the oil price stays at around US$100/barrel. As of early August, Russia's reserves were US$534bn, including the national welfare fund of US$93bn and the reserve fund of US$27bn. Money supply stood at Rub20,742bn (US$690bn) at end-June and dollarization of total deposits at about 30%. External debt as of end-June was roughly equal to reserves at US$532bn with about US$33bn due until end-2011 and another US$34bn in 1H2012. Public sector external debt as of end-March 2011 stood at US$200bn of GDP or roughly 40% of total external debt.

Oil price remains main riskHowever, higher ruble flexibility should cushion any effect on the real economy compared to 2008. The direct effect of a US$10 per barrel move on the oil price would be about US$23-25bn pa on the current account and about US$17-20bn pa on the budget. The effect on the budget would be somewhat muted by the effect of ruble depreciation and higher inflation (we estimate that following a 10%YoY exchange rate devaluation the CPI would increase by about 3.5pp YoY) at the same time the impact on gas prices from oil prices increases that sensitivity. However, we would expect any effect on the overall balance of payments to be reduced by a contraction in imports (in the 1998 and 2008 crises import contraction was extremely rapid due to a drop in domestic demand). Substantial risks to the external balance remain from the capital account, including through external debt repayments and dollarization. To the extent that we expect the ruble to adjust relatively quickly to any commodity price shock, we believe dollarization may be not as large. During the 2008 crisis, external corporate debt roll-over ratios were more than 100% and banks had to repay most of their external debt in 4Q2008 and 1Q2009. However, their loan-to-deposit ratios were about 135% as opposed to about 90% now. Furthermore, our equity strategists estimate that the leverage in the system is less of a concern than in 2008.

Should oil prices remain in the $80-$90 range ...... we would expect a budget deficit of around 3% in 2011 requiring about US$50bn in financing, which could be easily accommodated by the reserve fund. However, a large fiscal stimulus in 2012 is unlikely. We would expect the ruble to depreciate to about 37 to 38 against the basket, in this scenario, mostly due to the pressure from the capital and financial account. The current account would remain in a small surplus of about US$4bn per month until end-2011. As we do not expect a substantial slowdown in growth in this scenario, we do not expect much help from a contraction in imports at least in the near term. Such small current account surpluses can be easily overwhelmed by continued capital account outflows that may reach US$8bn per month in addition to the lack of inflows as borrowing on external markets becomes more expensive.

In a crisis scenario with oil prices in the $50-60 range ...... we would expect the ruble to fall to under 40 against the basket. Current account

inflows would be limited to about US$10bn in the remaining months of 2011 or about US$2bn per month. However, even if a devaluation were carried out promptly, we would expect a 10pp increase in dollarization of domestic deposits leading to about US$50bn in additional capital account outflows; somewhat lower than the change in dollarization ratio in the 2008 crisis, which was increased by the slow pace of the devaluation when dollarization of total deposits jumped from roughly 33% to 47%. Furthermore, debt roll-over could be problematic. The budget deficit is likely to jump to about 6% in this scenario just from the change in base-line assumptions on commodity prices, depreciation and inflation. However, lower growth would likely make the headline deficit larger.

Business, Energy or Environmental regulations or discussions

VTB, Mechel, Polyus, Razgulay May Move: Russian Equities Previewhttp://www.bloomberg.com/news/2011-08-08/vtb-mechel-polyus-razgulay-may-move-russian-equities-preview.html

QBy Yuliya Fedorinova - Aug 8, 2011 10:00 PM GMT+0200

The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

The 30-stock Micex Index (INDEXCF) fell 5.5 percent to 1,499.79 yesterday, the lowest level since Oct. 20. The dollar- denominated RTS Index declined 7.8 percent to 1,657.77, the lowest since December 2010.

VTB (VTBR RX): A group of banks led by Russia’s second largest lender has won a $4.73 billion concession for a road and bridge project in St Petersburg, unidentified government officials told Reuters. VTB fell 4.1 percent to 7.727 kopeks.

OAO Mechel (MTLR RX): Russia’s largest coking coal producer said its mining unit, which is planning an initial public offering this year, had 3.271 billion metric tons of coal reserves as of May 1. The deposits are enough for 110 years of mining at Mechel (MTLR)’s current rates of coal production. The shares fell 5.4 percent in Moscow to 565.8 rubles.

Razgulay Group (GRAZ) : Russia raised its grain-export forecast the third time in as many weeks to as much as 23 million metric tons. The country plans to export 20 million

to 23 million tons of grain this year, Agriculture Minister Yelena Skrynnik told reporters in Krasnodar in southern Russia. Razgulay, sugar and grain producer, plunged 10 percent to 39.02 rubles, the lowest since July 2010.

Polyus Gold International Ltd. (PLZL RX): Russia’s largest gold producer may benefit from record-high gold prices after Standard & Poor’s cut the top U.S. credit rating, fueling a slump in equities and commodities amid concern that the global economy is slowing. Polyus shares rose 0.1 percent yesterday to 1,652.30 rubles.

To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net;

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Russian stock market daily morning report (August 09, 2011)

http://www.stockmarketsreview.com/reports/russian_stock_market_daily_morning_report_20110809_159486/

By Veles Capital

 

During the night the American indices slipped significantly by 6% average, oil continued dropping – by morning the price fell below 102 USD per barrel of Brent. Futures for S&P are losing about 0.8%. Maximum impact on the markets might be made by the results of FOMC session – investors expect statements on the new stimulation program, which might become a reason for markets bounce in the eve. Results of the session will be output after the Russian market is closed and will be won back by the Russian shares tomorrow.

Sberbank more than doubles net profit in 7M

http://www.rbcnews.com/free/20110809105720.shtml

      RBC, 09.08.2011, Moscow 10:57:20.Sberbank's net profit under RAS jumped 2.6 times to RUB 201.2bn (approx. USD 7.05bn) in January-July 2011 compared to RUB

76.8bn (approx. USD 2.69bn) in the same period of 2010, the lending institution announced in a statement today.

      Pretax profit reached RUB 250.1bn (approx. USD 8.77bn), and operating revenue (before reserve allocation) climbed 9.2%.

      The bank's assets increased 5.7% to RUB 9 trillion (approx. USD 315.57bn) since January, and in July alone, assets rose 0.7%. Sberbank's capital expanded 14.4% since January and reached RUB 1.4 trillion (approx. USD 49bn).

      Meanwhile, capital adequacy stood at 17% as of August 1, 2011.

Sberbank RAS net profit $7 bln in first 7 monthshttp://in.reuters.com/article/2011/08/09/sberbank-earnings-idINLDE77806420110809

12:38pm IST

MOSCOW, Aug 9 (Reuters) - Sberbank , Russia's biggest lender, made 201 billion roubles ($7.1 billion) net profit in the first seven months of 2011 under Russian accounting standards (RAS), boosted by provision writebacks.

Sberbank, which accounts for around a third of overall assets in Russia's banking system and half of all deposits, made 76.8 billion roubles net profit in the 2010 period, it said on Tusday.

Sberbank's results, seen by foreign investors as a proxy for Russian economic growth, were driven by provisions writebacks of 28.8 billion roubles, after the lender took a 127 billion charge a year ago to cover potential loan impairments.

Sberbank said its corporate loan book rose 8.6 percent, while retail loans rose 13.6 percent from the start of the year.

The lender, which prepares to sell a 7.6 percent stake currently worth around $6 billion, plans to post 230-250 billion roubles net profit for the full year, a target analysts say is too conservative. (Reporting by Katya Golubkova; Editing by Dan Lalor)

Gref raises Sberbank stake

http://www.bne.eu/dispatch_text16323

AtonAugust 9, 2011

Vedomosti reported yesterday (8 Aug) thatSberbank's CEO German Gref has increased his holding in the bank to 0.0019%, up from 0.0014% previously. This is the second time this year that Gref has increased his stake (the last time was in May). At Friday's close Gref's enlarged stake was worth almost RUB40mn, according to the article. We hold the view that this kind of news is always moderately positive for the stock as it suggests management's confidence in the bank's prospects, boosts their incentive to perform and helps align their interests with those of minority shareholders.

Citibank Loans $100M 09 August 2011Interfax

Citibank has presented a ruble-based loan worth the equivalent of $100 million to Rosselkhozbank, Citibank said in a statement. The funds will be available for one year and are slated for retail financing.

State-owned Rosselkhozbank was the fourth-biggest bank in Russia by assets at the end of the first half of this year, according to Interfax data. Citibank was the 19th-biggest.

Read more: http://www.themoscowtimes.com/business/article/citibank-loans-100m/441775.html#ixzz1UWBRoNbJ The Moscow Times

Citi Provided 1 year Trade Finance Loan to Russian Agricultural Bank

http://www.bne.eu/dispatch_text16323

Citi - press releaseAugust 8, 2011

Russian Agricultural Bank and Citi Russia have announced the closure of the deal on providing Russian Agricultural Bank with a 1 year trade finance loan. The loan is nominated in Russian Rubles and amounts to the equivalent of USD 100 mln.

Over years Citi has developed successful cooperation with Russian Agricultural Bank and became its important partner in trade area providing confirmation and financing of

LCs and trade related bilateral loans.

"This is the fourth trade-related loan with Citibank starting from the end of 2009, which highlights the strengthening of relationship between our institutions. The raised funds will allow us to meet the high demand of the agricultural producers and other customers in low-cost resources", said Victoria Kirina, Deputy Chairman of the Management Board at Russian Agricultural Bank.

"This deal is another important step towards deepening relations between Russian Agricultural Bank and Citi in terms of trade finance. We are glad that Citi acts as a partner in this benchmark deal, acknowledging a strategic partnership between our two banks. For the past 12 month Citi and Russian Agricultural Bank arranged and closed deals to the total amount of USD 245 mln. Cooperation between these two sound brands provides additional opportunities in trade finance which should also have a positive impact on development of Russia's agricultural sector", said Natasha Ansell, Head of Financial Institutions and Public Sector for CIS region at Citi.

Sitronics Seeks State Orders for Microchips, Vedomosti Reportshttp://www.bloomberg.com/news/2011-08-09/sitronics-seeks-state-orders-for-microchips-vedomosti-reports.html

QBy Ilya Khrennikov - Aug 9, 2011 7:31 AM GMT+0200

OAO Sitronics (SITR), billionaire Vladimir Yevtushenkov’s microchip producer, has asked the government to make good on a promise by Prime Minister Vladimir Putin to support Russian technology companies, Vedomosti reported.

Yevtushenkov urged Putin to speed up administrative procedures to boost state purchases of locally made microchips and impose import restrictions on foreign substitutes, the Moscow-based newspaper, said citing a letter sent to Putin last month.

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

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Polyus Gold secures funding for possible buyouthttp://in.reuters.com/article/2011/08/08/polyusgold-buyout-idINLDE7770NE20110808

Mon, Aug 8 2011

MOSCOW, Aug 8 (Reuters) - London-listed Russian gold producer Polyus Gold International (POLGq.L: Quote, Profile, Research) has secured funding for a possible buyout of its shares from minority holders.

Its Polyus Gold unit has provided state-run bank VTB with a guarantee for a loan of up to 50 billion roubles ($1.76 billion) for 43 months, Polyus said in a statement dated on Friday.

Polyus may need the funds to buy out the remaining minority holders' 11 percent of shares in Polyus Gold PLZLq.M after its merger with KazakhGold miner, a source close to the deal told Reuters.

Polyus, controlled by businessmen Mikhail Prokhorov and Suleiman Kerimov, declined to comment.

KazakhGold and Polyus Gold completed their combination on July 26, 2011, as a result of which KazakhGold acquired 89.14 percent of Polyus Gold and was renamed Polyus Gold International.

VTB Capital brokerage said in a note that Polyus may need the funding after Aug. 15, when Polyus Gold International is scheduled to close its second exchange offer to former Polyus' minorities. (Reporting by Polina Devitt; writing by Aleksandras Budrys) ($1=28.35 Rouble)

Polyus Has 3 Million Ounces of Gold in Kazakhstan, Romaniahttp://www.bloomberg.com/news/2011-08-08/polyus-has-3-million-ounces-of-gold-in-kazakhstan-romania.html

QBy Yuliya Fedorinova - Aug 8, 2011 2:30 PM GMT+0200

Polyus Gold International Ltd., the mining company formerly known as KazakhGold Group Ltd., said it has 3 million ounces of reserves in Kazakhstan and Romania.

The total is backdated to May and conforms to the JORC code of practice, the Moscow-based company said today in a regulatory statement. At current rates of production, the reserves will allow Polyus to mine gold in the region for 27 years.

The company produced 110,000 ounces of gold in Kazakhstan last year, according to data on its website. Polyus hasn’t yet started extraction in Romania.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Alrosa Rated as 'Buy' http://www.themoscowtimes.com/business/article/alrosa-rated-as-buy/441777.html

09 August 2011Bloomberg

Alrosa, the country's diamond mining monopoly, was rated "buy" by VTB Capital as the bank initiated coverage of the company ahead of a possible share sale next year.

Alrosa, which is traded on the over-the-counter market in Moscow, has about 30 percent upside as the company is set to benefit from "skyrocketing" prices for rough diamonds and potential privatization, VTB said Monday.

The over-the-counter price may reach $43,000 a share within 12 months, the bank said. Alrosa had a market value of about $9 billion as of Aug. 5.

Read more: http://www.themoscowtimes.com/business/article/alrosa-rated-as-buy/441777.html#ixzz1UVYhtiTV The Moscow Times

Alrosa Selling Hotel Division http://www.themoscowtimes.com/business/article/alrosa-selling-hotel-division/441769.html

09 August 2011

Diamond monopoly Alrosa is selling a subsidiary company with hotels in several Russian cities.

The starting price for 100 percent of the stock in Alrosa Hotels is 834.2 million rubles ($29.7 million). Bids for the chain will be accepted until Sept. 15, Alrosa said last week. Alrosa Hotels has facilities in Moscow, Yakutsk, Mirny, Arkhangelsk and St. Petersburg (under reconstruction), a retirement home in Anapa and the cruise ship Mikhail Svetlov.

According to the SPARK-Interfax database, the company’s sales revenues dropped to 287 million rubles in 2009 from 352 million in 2008.

(Interfax)

Read more: http://www.themoscowtimes.com/business/article/alrosa-selling-hotel-division/441769.html#ixzz1UVYXCxq1 The Moscow Times

Russian H1 magnesium and titanium manufacture goes uphttp://www.steelguru.com/metals_news/Russian_H1_magnesium_and_titanium_manufacture_goes_up/219086.html

Tuesday, 09 Aug 2011In H1 of 2011 magnesium production in Russia rose by 18.9% compared to the corresponding period of 2010 however magnesium alloys output dropped by 37.4%.

In January to June 2011 titanium and titanium semi products production tended to rise: titanium output grew by 29.9%, titanum wire, rods and profiles by 7.7%.

Mr Leonid Khazanov the ovserver of Metal Supply and Sale Magazine said that the production data reflect the situation in consuming branch of industries. For example titanium manufacture increased due to the demand expansion from the aviation then the magnesium production was affected by the growth of the steel industry, where it is used for deoxidation.

(Sourced from www.metalinfo.ru)

Metinvest expands its distribution network in Russian Federation

http://www.steelguru.com/russian_news/Metinvest_expands_its_distribution_network_in_Russian_Federation/219046.html

Tuesday, 09 Aug 2011

Metinvest Eurasia the wholesale and retail sales channel of Metinvest Group in Russian Federation has expanded its distribution network by opening metal center and sales office in Saratov one of the largest industrial cities in Volga Federal District.

Presently, Metinvest Eurasia distribution network in Russia includes 24 warehouses in Central, Southern, Northern Caucasus, North Western and, from now in Volga Federal Districts. Integration of MMKI products has expanded the range of flat rolled product to

be sold in Russia and offered new sales development opportunities. The share of plates in Metinvest Eurasia sales structure grew from 27% in the first half of 2010 up to 45% in the first half of 2011.

Product mix at Saratov warehouse includes rebars, wire rod, beams, channels, angles, heavy plates, hot rolled sheets, cold rolled sheets, galvanized plates and coils produced by Azovstal, Yenakievo Steel Works MMKI as well as other steel mills in Ukraine and CIS countries. During first three months the level of warehouse inventories will be maintained at 3000 tonnes to 4000 tonnes with subsequent increase up to 6000 tonnes to 7000 tonnes. The products in stock will be sold to consumers in Saratov and Penza regions.

Mr Roman Rybalov CEO of LLC Metinvest Eurasia said that "Metinvest strategy in Russia is a maximum proximity to end user. Opening warehouse and sales office in Saratov is an important step towards our goal. We will keep on exploring possibilities of developing our distribution network in Russia both, at the expense of strengthening our positions in existing regions and opening warehouses and sales offices in new regions."

UAE- Russian regions open as Etihad Airways and S7 Airlines expand agreement

http://www.menafn.com/qn_news_story_s.asp?StoryId=1093434095

MENAFN - Emirates News Agency (WAM) - Aug 09 2011

Article: UAE- Russian regions open as Etihad Airways and S7 Airlines expand agreement Share This Article: UAE- Russian regions open as Etihad Airways and S7 Airlines expand agreement Add to Delicious Seed this article Buzz this article Add to Reddit Add to furl Add to stumbleupon Add to Mixx! E-Mail Article Printer-Friendly Translate Share Article Text Size (MENAFN - Emirates News Agency (WAM)) Etihad Airways continues to build its presence in Russia with the expansion of the commercial agreement with S7 Airlines. S7 Airlines is Russia's fastest growing airline and the country's largest domestic carrier. The revised deal will allow Etihad and S7 passengers to book flights from four Russian regional cities for travel to and from Abu Dhabi and beyond, connecting with Etihad's daily Moscow services. The new codeshare cities served are: Kazan (KZN), Samara (KUF), Krasnodar (KRR) and Saint Petersburg (LED). James Hogan, Etihad Airways Chief Executive Officer, said: "The Russian regional cities are now even more accessible from Abu Dhabi and beyond on the Etihad network, thanks to the expansion of our codeshare agreement with S7 Airlines." "We view the revised partnership as a natural extension of the successful joint operations we launched in March 2010." "We look forward to continuing to work with S7 to enable passengers from all over Russia to travel to Abu Dhabi and further afield," said James Hogan, CEO of Etihad Airways. The new codeshare is operational immediately and travellers can book tickets through travel agents and Etihad's contact centres. MENA News Headlines Aug 08 2011

Activity in the Oil and Gas sector (including regulatory)

LUKOIL, Rosneft, TNK-BP, Bashneft and Gazprom to bid for Iraq licences http://www.bne.eu/dispatch_text16323

VTB CapitalAugust 9, 2011

News: According to Kommersant, five Russian companies have been cleared to take part in the fourth round of licence auction. There are 12 licences prepared for this round, of which seven are gas licences while five are oil licences.

Our View: The Iraq contacts which have already been granted provide very little to licence holders in terms of value creation. Their service-like nature limits the potential return to single digit numbers while there is significant downside if the licence holder does not meet the targets (the only real upside is if the current regulations change). The cost of capital is the decisive factor in this competition and we do not expect any of the Russian oil companies to create value through the bidding in this auction. Nor do we expect any stock reaction as result.

Dmitry Loukashov

Russian oil companies return to Iraqhttp://rt.com/politics/press/kommersant/russian-oil-companies-gas/en/

Published: 9 August, 2011, 07:43Edited: 9 August, 2011, 07:44

They are once again laying claims to oil deposits in the country By Olga Mordyushenko

Iraq has selected more than 40 bidders for 12 oil and gas fields which it plans to allocate in early 2012. The list includes five Russian companies. Almost all of them have already participated in Iraqi global tenders, and Lukoil and Gazprom have received exploration rights to the Western Qurna-2 and Badra fields. This time, experts say, Rosneft and TNK-BP have the highest chance for success.     

Yesterday, the Iraqi Oil Ministry announced that it has qualified 41 companies to participate in a tender for the development of 12 oil and gas fields, including five Russian companies. Bashneft, TNK-BP, Rosneft, Gazprom and Lukoil have undergone the pre-qualification process. Contracts should be signed in 2012. Gas will be produced in seven

potential exploration areas, and oil in five. The ministry has yet to disclose the reserves.

This is already the fourth licensing round for Iraqi oil and gas fields, and Russian companies have taken part in almost every one. The country began holding bidding rounds in mid-2009. Two rounds were held that year. Two investor groups won the first round: BP and CNPC, receiving a contract for the Rumaila field, and Shell and ExxonMobil, a contract for Western Qurna-1.      

In course of the second round, 10 fields were offered for sale. Exploration rights for the Zubair field were given to the consortium headed by the Italian Eni, and Western Qurna-2 to a consortium of Lukoil and Norwegian Statoil. The recoverable field reserves are estimated at approximately 12.9 billion barrels (1.75 billion tons) of oil. Companies plan to produce 1.8 million barrels (250,000 tons) of oil a day; remuneration for above-limit production will equal to $1.15 per barrel.

Contractually, Lukoil owns 56.25%. The company was planning to start drilling in late 2010, but has yet to launch operations. Initially, oil production was expected to take place in late 2012, but then the timeline shifted to early 2013. Yesterday, Lukoil representatives explained that it remains unknown as to what specific fields the company will claim.       

Another winner in the second round of bidding was Gazprom Neft. Together with Turkey’s TPAO, Korea’s Kogas and Malaysia’s Petronas, it received rights to the Badra field, with estimated reserves of 2 billion barrels (272.8 million tons). The consortium offered to produce 170,000 barrels (23,200 tons) of oil daily, with above-limit commission of $6 a barrel. The company has no plans to take part in the new tender, Gazprom Neft representatives informed Kommersant.  

In the third auction for exploration of mineral resources, Iraq issued the exploration rights for three major gas fields. In late October, South Korean Kogas and Kazakhstan’s Kazmunaigaz won the tender for the development of the Akkas gas field. A gas field in Basra was given to a consortium headed by Kuwait Energy, and the right to develop the Mansuria gas field was given to Turkey’s TPAO, Kuwait Energy and Kogas. A total of 13 foreign companies were registered for the tender including ENI, Edison, Statoil and Russia’s TNK-BP. The latter submitted documents for the pre-qualifying round, but did not participate in the tender, as it did not complete the project’s cost assessment on time. Yesterday, TNK-BP representatives clarified that this time as well, no final decisions regarding involvement in projects on Iraqi territory have been made.    

Andrey Polishchuk, an oil and gas market analyst at BrokerCreditService, considers Iraq to be a promising region despite the political risks. He notes that a more serious threat to the companies is posed by the Iraqi leadership’s high production demands, which are hard to predict at the initial stages of development. Ultimately, says the analyst, companies could be operating at zero profit.

In Polishchuk’s opinion, in the forthcoming auction Russian companies have a high chance for success, “among others, for political reasons.” Meanwhile, due to the need to

compensate for declining production, Lukoil will not be ready to invest major funds into the development of new fields, believes the analyst, whereas Rosneft and TNK-BP will actively compete to win within the framework of global expansion.      

Timur Khayrullin from Grandis Capital, meanwhile adds that the general competition level in the Iraqi auction will be high – especially given that “the political risks in the country are constantly reducing and the situation there is more stable than, say, in Iran.” According to the analyst, Lukoil has the highest chance for success, as the company already has experience working in the country.

UPDATE 1-Baker Hughes awarded LUKOIL Iraq contracthttp://af.reuters.com/article/energyOilNews/idAFN1E77715A20110808

Mon Aug 8, 2011 5:42pm GMT

* Contract duration 2 years

* Work will be in West Qurna field

HOUSTON Aug 8 (Reuters) - Russian oil company LUKOIL (LKOH.MM) awarded U.S. oilfield services firm Baker Hughes Inc (BHI.N) a two-year contract to provide full drilling and completion services for 23 wells in the West Qurna field in southeast Iraq.

Some of the wells will be drilled directionally, Baker Hughes said on Monday, targeting the Mishrif formation, with step-outs of up to 3,000 meters (9,842 feet). The wells are closely spaced, so the operation will employ a cluster drilling technique.

A spokeswoman from Baker Hughes was not immediately available to comment on the contract's value.

Last year Baker Hughes opened an operations base in Basra, Iraq, and the company also provides work in the Zubair field.

Shares of Houston-based Baker Hughes fell 8.3 percent, or $5.35 to $59.19 in afternoon New York Stock Exchange trading, as stocks fell broadly around the world. (Reporting by Anna Driver, editing by Gerald E. McCormick)

Rosneft to start paying Mineral Extraction Tax for Vankor's crude

http://www.bne.eu/dispatch_text16323

VTB CapitalAugust 9, 2011

News: According to Interfax, Rosneft's cumulative production at the Vankor oilfield reached 25mmnt yesterday (the level up to which, under the Russian tax code, Vankor had MET holidays).

Our View: The end of MET holidays for crude oil from the Vankor field was widely expected and is already priced in. According to our calculations, Rosneft's EBITDA will drop USD 1.0bn as a result (5% from the 2011 results). We believe that the news is neutral for the stock.

BP files suit against TNK-BP partnerhttp://en.rian.ru/business/20110809/165640659.html

11:04 09/08/2011

MOSCOW, August 9 (RIA Novosti)

Oil giant BP has filed a suit with a Stockholm tribunal against Renova, one of its partners in its TNK-BP Russian joint venture, over Renova's unwillingness to allow it to team up with local giant Rosneft, Kommersant business daily said on Tuesday.

BP signed an agreement in January with Russia's largest oil company Rosneft, in which it would have gained the right to develop Russia's Arctic shelf, and swapped $16 billion worth of stock with Rosneft.

AAR, BP's partner in the TNK-BP joint venture, objected saying TNK-BP's shareholder agreement compelled BP to offer any Russian project to TNK-BP first. The Rosneft deal, which was supposed to bolstered BP's reserves, flopped.

Renova, the holding company of billionaire Viktor Vekselberg, is part of AAR. Renova, through its IES Holding, owns gas and gas distribution assets in Russia and Ukraine.

A Renova source said the company did not understand BP's argument.

"We are sure that Renova did not violate the shareholder agreement and are ready to prove it at all levels," the source said.

BP goes to tribunal with Renova - new round in dispute between BP and AAR

http://www.bne.eu/dispatch_text16323

VTB CapitalAugust 9, 2011

News: According to Kommersant, BP has filed a notice of arbitration with the Stockholm tribunal to initiate proceedings against Renova. BP has accused Renova of violating the shareholder agreement between BP and AAR. The agreement requires both companies to pursue new opportunities in Russia and Ukraine exclusively through TNK-BP. But Renova (which owns 12.5% of TNK-BP) continues to hold gas and gas-distributing assets through KES Holding.

Our View: KES has held these gas distribution assets for a long time and has recently been looking for an exit (there were reports that TNK-BP might buy these assets out of KES). This would mean that BP's representatives on TNK-BP's board were informed that these assets existed. The fact that BP is only now instigating proceedings leads us to believe that it might be building a defence against potential further attacks from AAR. We do not see any long-lasting implications for TNK-BP Holding's shares.

BP seeks arbitration in dispute with Renova –reporthttp://af.reuters.com/article/commoditiesNews/idAFLDE77801G20110809

Tue Aug 9, 2011 7:24am GMT

MOSCOW Aug 9 (Reuters) - British oil company BP has launched a legal case in a Stockholm court of arbitration against one of the shareholders in its Anglo-Russian TNK-BP joint venture, Kommersant newspaper reported citing sources close to all the parties.

According to the report, BP says Renova, part of the Alfa-Access-Renova (AAR) consortium that controls half of TNK-BP, is in violation of an existing shareholders agreement by operating independent gas and fuel firms in Russia and Ukraine.

BP says the shareholders' agreement requires Renova -- which is owned by Viktor Vekselberg, one of Russia's richest men -- to offer to sell these operations to TNK-BP and that it has not done so.

A Renova representative told the newspaper that the group was not in violation of the agreement, and also confirmed that BP was seeking arbitration.

BP declined comment when contacted by Kommersant because of the confidential nature of the arbitration agreement.

The two companies could not be reached for immediate comment by Reuters.

The case is the latest dispute in a long-running conflict between BP and the Russian investors in the TNK-BP joint venture.

Matters came to a head in May when BP's plan to gain a foothold in Russia's offshore Arctic collapsed after TNK-BP used the shareholder agreement to force the British company out of a multi-billion dollar exploration deal with Rosneft .

Renova controls Integrated Energy Systems (IES), Russia's largest private power supply company, which has a range of natural gas and fuel businesses.

Forbes magazine put Vekselberg's fortune at $13 billion in April.

(Reporting by Alfred Kueppers; Editing by Andrew Callus)

TNK-BP applies to acquire Itera

http://www.bne.eu/dispatch_text16323

VTB CapitalAugust 9, 2011

News: According to Izvestia, TNK-BP has made an application to the Federal Anti-Monopoly Service related to the possible acquisition of a 50% stake in Itera. No details about the deal are available at this stage. Itera's main assets are a minor 48.5% stake in Sibneftegaz (in which Novatek has a controlling stake) and a 49% stake in Purgaz (in which Gazprom has a controlling stake).

Our View: TNK-BP and Itera have reportedly been negotiating for some time. How reasonable the potential deal is would depend on the price. At this point, we do not see any immediate impact on stock prices.

Gazprom

Gas export prices up 26%http://www.bne.eu/dispatch_text16323

bneAugust 9, 2011

Average gas export prices from Russia grew by 18 - 26% in the first half of the year,

reports Prime, as high oil prices boosted the cost of gas under pricing formulas.

With major customers still trying to persuade Gazprom to include a greater element of spot pricing into its formulas - E.On is taking the Russian company to court it was reported last week - prices continue to recover from the gas glut seen during the last crisis.

The average price of Russian gas exports to non-CIS countries rose 18.8% YoY to hit $353 per 1,000 cubic meters in the first half of the year according to the Federal Customs Service.

The average price of Russian natural gas exported to countries within the CIS, excluding customs union partners Belarus and Kazakhstan, was $274 per 1,000 cubic meters over the same period, a rise of 26.4%.

In January-June, Russia's natural gas exports to non-CIS countries amounted to $21.5 billion, while natural gas exports to CIS countries reached $8.1 billion.

The average price of exports in the second half of 2011 is only likely to be even higher, as the spike in the price of oil through the first half of the year influence the pricing formulas. Gazprom CEO Alexei Miller said in June that he expects to see many customers paying $500.

08-08-2011 12:56 Ukraine pays USD 477 million for July gas to Russiahttp://www.nrcu.gov.ua/index.php?id=148&listid=150036

NJSC Naftogaz of Ukraine transferred USD 477 million to OJSC Gazprom for natural gas imported in July 2011. A price for natural gas in Q3, 2011, makes up about USD 355/1,000 cu m. A month earlier, Ukraine paid to Russia USD 860 million, having purchased 3 billion cu m of gas. According to the terms of an additional agreement to the basic contract, concluded between Naftogaz and Gazprom on April 2, 2010, a price for natural gas is determined with taking into account a discount to the amount of USD 100/1,000 cu m. Earlier, Prime Minister Mykola Azarov said that the forecasted price for Russian natural gas in Q4, 2011, will make up USD 388/1,000 cu m. As it is known, Ukraine and Russia conduct negotiations about the change of the price formula for imported Russian gas. 

August 08, 2011 15:52

Gazprom commissioned USD 270 mln gas pipeline installed by Romanian companyhttp://business-review.ro/power/gazprom-commissioned-usd-270-mln-gas-pipeline-installed-by-romanian-company/12011/

The gas pipeline installed by the Romanian company GSP (Petrol Services Group) was commissioned by Russia’s energy company Gazprom in June 2011. The project involved laying a 177 kilometers gas pipeline along the Russian continental shelf of the Black Sea, between Dzhubga-Lazarevskoe-Soci and connecting it with the Russia - Turkey inter continental pipeline. It is projected that the gas pipeline will have an annual throughput capacity of approx 3.8 billion cubic meters. “DLS project represents for GSP the confirmation of meeting one of our strategic objectives: acceding into the first league of offshore integrated oil and gas services providers worldwide. The management of all the subsea pipeline installation and adjoining works within the USD 270 million worth contract having the giant Gazprom as final beneficiary speaks by itself about our growth rate, about the achieved performance level in the turnkey projects management and successful delivery of major projects. Acceding the Russian market with such a large scale project, GSP sends the signal that it is in our intent to develop a long term collaboration with the major Russian oil and gas market players, the DLS project being only the first step”, declared Fanel Hahui, GSP’s CEO.  The Dzhubga – Lazarevskoye – Sochi gas pipeline is part of the Program for Construction of Olympic Facilities and Development of Sochi as a Mountain-Climatic Resort by 2014,  when the Winter Olympics will be organized in this region. Works on the pipeline project began in 2009 and were finished in the summer of 2011.

GSP is a member of UPETROM Group and it’s headquartered in Constanta Harbor, Romania.