Vedomosti
Justice Ministry Announces Yuganskneftegaz Evaluation To Test Public Opinion - Observers
Market hopes for the sale of Yukos assets at a fair price are fading by the hour. Of all valuations of Yuganskneftegaz suggested by investment bank Dresdner Kleinwort Wasserstein (DrKW), the Justice Ministry has chosen the lowest: $10.4 billion.
A government official told Vedomosti that the Russian Federal Property Fund received a decision from court bailiffs yesterday to auction off 100% of Yuganskneftegaz. A newspaper source familiar with the DrKW findings said the figure of $10.4 billion does feature in the bank's report, but it reflects "the worst-case scenario." A Vedomosti source in the Kremlin does not rule out that this evaluation appeared to "test public opinion".
The response, however, was not slow in coming. The bailiffs' plans to sell Yugansk at two-thirds of the price expected by market players sent Yukos shares down 7.6%. "The market was very disappointed," says Steven Dashevsky, an analyst with Aton, an investment company. He believes that ministry officials took the figure of $10.4 billion out of context.
In the view of the Kremlin source, Yukos "should be pleased that it is being allowed to pay off [its debts], because it failed to find any money of its own or take out loans against [oil] inventories."
However, Yukos is of the opposite opinion. "We do not have the appraiser's report, and could not make any sense out of the Ministry's contradictory statement," says Yukos press secretary Alexander Shadrin, who was indignant that court bailiffs told Yukos nothing about either the evaluation or the upcoming sale of Yuganskneftegaz.
Gazeta
Expert: United Russia-Homeland Confrontation Absurd
The Homeland party, which the Kremlin set up for the Duma election campaign to "honestly steal" votes from the Communist Party, seems to have seriously taken up the proffered role of the systemic opposition to United Russia. Dmitry Rogozin's party is eclipsing the "ruling party" at local elections and is also admitting former members of the parliamentary majority. For example, Igor Morozov, who was expelled from the United Russia faction yesterday, immediately applied for membership in the Homeland faction, writes Gazeta.
Maxim Dianov, director of the Institute of Regional Studies, explains the fashion for Homeland by the fact that "it attracts provincial functionaries who failed to find a place in the tough hierarchy of United Russia." However, he warns against overestimating Homeland's capabilities; it can win some votes from the traditional patriotic Communist electorate, but these will not be enough to win elections.
At the same time, Homeland's success in the regions concerns the "ruling party." According to Gazeta, the latest political session of United Russia decided to seriously criticize Homeland. According to a source in the faction, "our main enemy now is not the Communists, but Rogozin."
"When two pro-Kremlin parties start fighting each other, it is nothing but a theater of the absurd," believes Mr. Dianov. "Even if the authorities decide to divide United Russia into two wings, they will need 'decent' left-wingers, but Homeland is not suitable for this role, as it is has a nationalistic bent." The most Homeland can do now, the political expert believes, is "to bite the heels" of United Russia, which is engulfed in internal intrigue. "The Kremlin will turn a blind eye to Homeland achievements as long as they do not threaten United Russia's position and do not prompt any positive efforts from it," Mr. Dianov suggests.
Vremya Novostei
Russians to Need Passports for CIS Travel
Next year, reciprocal trips of Russian and CIS citizens, considering the visa-free system, will require a reduced list of documents: diplomatic or business passports, seamen's or foreign passports, Vremya Novostei reports.
The agreement to change the passport regime was achieved this September at the 15th session of the consultative council of heads of the CIS Foreign Ministry consular services. Russia has signed the agreement on the visa-free border system with the majority of CIS countries, including Ukraine, Belarus, Azerbaijan, Kyrgyzstan, Moldova, Kazakhstan, Tajikistan and Armenia. Russian citizens only need a visa when traveling to Georgia and Turkmenistan.
According to the Interior Ministry's 2003 information, over eight million Russian citizens have foreign passports (as opposed to internal passports) in Russia. According to the State Statistics Committee, the number of Russian travelers to CIS countries has increased by an average of 50% in the past five years. They mainly go to Ukraine and Belarus. However, only 30% of Russian tourists who holiday at the Ukrainian seaside have foreign passports.
The Russian Foreign Ministry promises, "to do its best to soften the consequences of this decision." Series of interstate agreements are being drafted to facilitate border crossing for residents of border areas. Moreover, the visa-free system may remain between Ukraine and Russia.
Vedomosti
Russian Oil Revenues Less Than Foreign Companies' Despite Record Prices
The current spread between the price for benchmark Brent and Russian Urals oil has soared to $8 per barrel, a ten-year high. The average Brent-Urals spread, according to Christopher Weafer of Alfa Bank, has stood at $1.3 per barrel over the past decade.
Referring to Mr. Weafer's data, Vedomosti writes that the Russian budget could have received an additional $2.4 billion, and Russia's oil companies an additional $600 million ($3 billion in total) if the spread had remained the same. Mr. Weafer, who estimated Russia's 2004 oil revenue at $55 billion, is sure that the spread will reduce soon.
According to Vladimir Milov, the president of the Institute for Energy Policy, lower demand for Urals crude is due to tighter environmental requirements. European refineries want oil with a lower sulfur content, which comes primarily from Iraq and the United Arab Emirates.
A manager with a Russian oil major said Russia was flooding its own market. While the Brent price depends only on supply and demand, the Urals has a certain critical demand in Europe. Meanwhile, an unexpectedly sharp increase in supply of oil from Primorsk increased pressure on the price first in Rotterdam and then - as a result of arbitrage supplies - in the Mediterranean.
"A decisive blow on the high-sulfur crude market came with increased production of this oil in Iraq," the manager said. He argues the trend can only be broken if Russia starts working on non-traditional markets in North America and Southeast Asia.
Novye Izvestia
Parents to Be Sent to Prison for Poor Upbringing of Children
The Russian State Duma is preparing a set of sensational bills related to parents, children and school principals. They are to be adopted next spring, Novye Izvestia reports.
The law on the system to prevent child neglect and juvenile offenses will be amended with a clause giving the police the right to detain and place in temporary detention centers all juveniles who appear in the street at night without any accompanying adult. Now the police may only detain a teenager for committing an offense.
The Duma will change the procedure in the law on education for excluding a student from school. The school will have to receive the consent of the parents' committee and the commission for juvenile affairs. Now schools may exclude a problem pupil on its own if he/she is over 14 and systematically violates the school's charter.
School principals, heads of cultural and sports centers will have to pay fines if teenagers drink alcohol or take drugs on the premises they oversee.
Parents that do not fulfill their duties in bringing up their children will be sent to jail. The relevant prison terms have not been set yet.
The critical situation with homeless and neglected children is the reason for the tougher legislation.
According to Yekaterina Lakhova, the chairman of the State Duma committee for women, family and young people, the number of homeless children in Russia is, according to various estimates, between 100,000 and 4,000,000.
According to official statistics, 16,000 school-age children do not go to school, while 50,000 run away from home every year. Indeed, 280,000 families in Russia are considered to have problems and the majority of drug addicts are teenagers.
