MOSCOW, June 27 (RIA Novosti) Russia unlikely to benefit from Iran's game of nerves with America / Opposition trying to cloud G8 summit in Russia / Gazprom targets Novatek / Tatneft set to become first Russian company to leave world's top trading floor / Russia's largest gold deposit not to be auctioned off until 2008
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Russia unlikely to benefit from Iran's game of nerves with America
Tehran is ready to use the "oil weapon" to protect its national interests. Russian experts say the hydrocarbons blackmail might provoke a crisis that would affect everyone, including Russia.
It may seem, at first sight, that Iran's stand suits Moscow. The "rogue" country is ready to cooperate with all of the United States' enemies, and, judging by the unprecedented growth of Iran-Russia ties, apparently regards Russia as one of them.
However, the recent statements of the Iranian authorities may threaten the global energy stability, which does not suit Iran's partners at all.
"Even a temporary blockade of the Strait of Hormuz would be a more serious blow for Russia than several tactical nuclear charges being detonated," said Alexander Konovalov, president of the Institute of Strategic Assessment and Analysis, a Moscow-based think tank. "Iran's actions can have only a short-term positive effect for Russia, making it a unique [hydrocarbons] supplier. But in the longer term, such a scenario would result in a global economic crisis, which will affect Russia alongside other countries."
Shamil Sultanov, head of the Institute of Religion and Politics and a member of the parliamentary committee on international affairs, said that Russia, just as all other oil suppliers, would benefit considerably in the event of a crisis. "Iran may easily stop oil deliveries to the United States," he said. As of now, "it supplies 70% of its oil exports to Asia, and its proved reserves amount to 12-13 billion tons (95.55 billion bbl)."
However, Sultanov said that although Iran was playing on America's nerves, its ultimate objective is "to avoid a crisis."
Other experts disregard the possibility of a crisis altogether.
"This is nothing more than flag-waving," said Sergei Karaganov, head of the Russian Council for Foreign and Defense Policy. "There is no threat of sanctions against Iran, and hence no danger of an oil war. This situation cannot be regarded seriously, because we see that tensions in Iran's relations with other countries are receding."
Opposition trying to cloud G8 summit in Russia
A tent camp in St. Petersburg and a conference called Drugaya Rossiya (Another Russia) in Moscow will be opposition events in the run-up to the July 15-17 G8 summit.
The anti-summit effect may lose some of its sting, however, because international organizations may refuse to take part and some of the declared entrants fear the event will be overly politicized.
The all-Russian conference Drugaya Rossiya is to take place in Moscow on July 11-July 12.
"During the summit Russia will be in the focus of international attention, but parade its successes only," said Lyudmila Alekseyeva, chair of the Moscow Helsinki Group and member of the conference's organizing committee. "We want to show that there is the other Russia, suffering from bureaucratic fiat and human rights abuses."
Alekseyeva said the event's sponsors were overseas-based National Endowment for Democracy and the Soros Foundation. Alexander Osovtsov, another member of the organizing committee, said the costs were "only millions of rubles." A source close to the conference organizers said he thought the money came from former Russian Prime Minister Mikhail Kasyanov and Yukos co-owner Leonid Nevzlin.
The outlays on the St. Petersburg anti-summit of anti-globalists (July 13-15) are much more modest than for Moscow's. "The conference is a grand affair, it is for the rich; we, however, will live in tents, and ours is going to be a poor man's show," Karin Kleman, director of the Institute for Collective Action, said.
Experts do not expect much of a bang from the anti-summit. The opposition in Russia is weak, fragmented and no real force, said political scientist Dmitry Oreshkin.
"The conference, if held, is unlikely to produce a serious impact on the [G8] summit," said Boris Shmelyov, director of the Center for Comparative Political Studies of the Russian Academy of Sciences' Economics Institute. He thinks the Kremlin could hold it up as an example of political freedom in Russia.
Gazprom targets Novatek
On Monday, Russian energy giant Gazprom, which continues to consolidate its assets in Russia, announced the signing of a preliminary agreement on purchasing of a 19.9% stake in Novatek, the country's largest independent gas producer.
Under the deal, which is expected to be closed in August, Gazprom will receive two out of eight seats on the Novatek board of directors. Analysts said that the gas monopoly would continue to shift responsibility for domestic gas supplies to independent producers as it focused on exports.
Experts said the 19.9% Novatek stake cost an estimated $2.4 billion. But Anton Rubtsov, an analyst with Ray, Man & Gor Securities, told the paper that the market value of the share package earmarked for Gazprom had climbed 11% to $2.7 billion after Gazprom's announcement.
Novatek, which has cooperated with state-owned companies before, sold a 25% stake in Russian energy company Tambeineftegaz to Gazprombank in 2005. And oil company Rosneft purchased 34% of shares of oil and gas company Selkupneftegaz.
Experts said Novatek was now only nominally independent.
Rubtsov said the agreement did not give Gazprom the right to control Novatek. "But the gas monopoly can use many methods, primarily the joint pipeline network, to influence the company," Rubtsov told the paper. "And I think Gazprom used precisely these mechanisms to buy the Novatek shares."
But he said the risks for Novatek had decreased overall.
"The risks of a Gazprom takeover remain, but business risks for the company have fallen," Rubtsov said.
Tatneft set to become first Russian company to leave world's top trading floor
Russian oil company Tatneft has announced its intention to delist from the New York Stock Exchange (NYSE). It will be the first time a Russian company has left the world's biggest exchange. Tatneft said its decision was based on the growing cost of securities registration in the United States and a desire to focus on trading on the London Stock Exchange (LSE), where it is also listed.
But market players say the company failed to comply with the NYSE's requirements.
A source in Tatneft's Moscow office said the company currently had 21% of its stock listed on the NYSE in the form of American Depositary Receipts (ADR), all of which could be moved to the LSE. The delisting decision is to be considered by Tatneft's board of directors on June 30.
"Since spending on registration with the U.S. Securities and Exchange Commission has grown substantially in the past few years, the company has decided to move international trading in its securities to London," Tatneft said in a press release.
Other market players say these reasons are not crucial.
"The company most likely does not want to provide transparent financial reports," said Konstantin Batunin, an analyst with Alfa Bank. "The LSE requirements on issuers are less strict, and the disclosure volume is smaller."
Vladislav Metnev, an analyst with the Troika Dialog brokerage, agreed.
"One of the reasons is delays with the provision of reports, which proves that Tatneft does not need the NYSE listing," he said. "It may reduce its disclosure standards after delisting from the exchange."
Tatneft has had disclosure problems for years. Its press release said the company had sent the SEC an audited report for 2004 and an unaudited report for the first half of 2005. Had the company postponed the reports, it would have lost its listing on the NYSE anyway.
Russia's largest gold deposit not to be auctioned off until 2008
The estimated reserves of Russia's largest gold deposit may be increased by 50%. However, the Sukhoi Log deposit in the Irkutsk Region, southeast Siberia, will not be offered at an auction until 2008. By this time, a law putting a cap on foreign investments in strategic deposits would have come into effect, making it very difficult for foreign companies to bid for Sukhoi Log.
Early next month the Federal Agency for Management of Mineral Resources (Rosnedra) is planning to award a tender to review Sukhoi Log gold reserves. The winner must produce the new estimates before March 31, 2008. New findings may push the reserves up to 1,541.2 tonnes from 1,041.2 tonnes.
Such a rise may make the deposit even more appealing to investors, who have been unsuccessfully trying to obtain licenses to it for several years. Also, experts do not rule out that Sukhoi Log may contain platinum, palladium and rhodium.
The last time an auction to develop Sukhoi Log was postponed at the beginning of 2005.
Despite the level of investment requirements to develop the deposit (up to $1.5 billion), several companies showed their interest. Candidates included Norilsk Nickel, Basic Element, Polimetall, Alrosa, Fleming Family & Partners, and Barrick Gold.
Experts are sure that a Russian company will win the tender. Aton analyst Vladimir Katunin said the most likely winner of the future auction is Polyus Gold, Norilsk Nickel's gold mining arm, formed when the metals giant separated its mining assets.
"Sukhoi Log investment requirements will be no less than $1 billion. Polyus Gold is today one of the largest gold mining companies, and can realistically invest such a sum, especially since it has set aside $2 billion for company development... Polimetall is a smaller company, while Alrosa is more focused on diamonds," Katunin said.
Finam brokerage said a joint venture between a Russian company and a major international player was a possibility.