MOSCOW, October 6 (RIA Novosti)
Eni subsidiary accused of environmental violations on Sakhalin / Participants named in North-European pipeline project / Severstal and Anglo American form an alliance / Most Russians feel surrounded by enemies - sociologist / Regional 2006 elections no indication of 2007 parliamentary elections
(RIA Novosti does not accept responsibility for articles in the press)
Vedomosti
Eni subsidiary accused of environmental violations on Sakhalin
It has now become clear why Italian energy firm Eni was so alarmed by the environmental conflict around the Sakhalin 2 energy project in Russia's Far East. One of its subsidiaries is a project contractor, and is accused of illegal deforestation by the Russian environmental authorities. The General Prosecutor's Office will now look into the matter.
Eni had planned to sign an agreement on cooperation in Europe and an asset swap with Russian gas giant Gazprom on October 15. However, on Wednesday its CEO, Paolo Scaroni, said the deal could be postponed due to the pressure the Russian authorities were putting on Western energy companies.
Yesterday it became clear why he was so worried about foreign investors working on the island of Sakhalin in Russia's Far East, when the Federal Service for the Oversight of Natural Resources attacked its 'granddaughter' company Starstroi. Information on "numerous cases of illegal forest felling... and the destruction of the rich soil layer during the construction of coastal pipelines" where Starstroi is the contractor have been submitted to prosecutors, the service announced.
"It is now up to investigations to determine who is to blame for these violations, Sakhalin Energy or Starstroi, and who will compensate for the damage," said Oleg Mitvol, the service's deputy head. His officials estimate damage of at least 50 million rubles, he said.
A spokesman for Starstroi declined to comment. An Eni spokesman denied the accusations. "Our contractor worked in compliance with all environmental standards, and the certificate issued to its client, Shell," he said.
Nevertheless, it took Scaroni just two days to change his mind about the agreement with Gazprom. Yesterday he said the talks were difficult, and that he would arrive in Moscow as planned on October 15 only if "the sufficient level of confidence that the agreement will be signed is achieved."
"Talks with the Italian company are progressing as planned, and Gazprom and Eni are equally interested in the agreement," said a Gazprom representative involved in drafting the document. A source in Eni confirmed this.
Kommersant
Participants named in North-European pipeline project
The third and last foreign participant in the North-European gas pipeline (Nord Stream, formerly NEGP) has been chosen. Holland's Gasunie will obtain 9% in the project in exchange for 9% in the Balgzan Bacton Line (BBL) pipeline. The deal should give Russian energy giant Gazprom extra support in the European Union, and a new chance to enter the British gas market.
No one at Gasunie could specify whether Gazprom would be given access to BBL in 2007.
The two projects differ in cost. Nord Stream is estimated at 5 billion euros, while BBL costs 600 million euros. Gasunie will have to pay excess or give Gazprom access to its gas transport capacity on EU markets.
Analyst Valery Nesterov of the Troika Dialog brokerage said Gasunie's entry to Nord Stream would secure the project political support from Western Europe. Opinions have recently been voiced that the project may be suspended at the stage of an environmental study in EU countries. The analyst said that the EU could now lessen political pressure on Gazprom.
Norwegian gas is supplied to EU countries via the Netherlands. In addition, two LNG regasification terminals are being built in the country. Tatyana Mitrova, head of the center for global energy market studies at the Institute for Energy Studies of the Russian Academy of Sciences, said Holland positions itself as a gas crossroads and a commodities price setting center, so Gazprom's presence there will allow it to influence the process.
Alfa Bank analyst Konstantin Batunin said Gazprom is trying to use its deal with Gasunie to secure access to end consumers on the EU market.
Dmitry Mangilev, an analyst with the Prospekt brokerage, said Gazprom's participation in BBL would enable it to economize if it abstained from laying Nord Stream from Holland to Great Britain, and to use the Norwegian and Dutch gas systems to enter the market.
Gazeta
Severstal and Anglo American form an alliance
Alexei Mordashov's steel giant Severstal and Anglo American, one of the world's biggest mining companies, announced Thursday creation of an alliance for joint prospecting of nickel, copper and zinc deposits in Russia. Experts think Severstal's choice of a partner is fortunate.
The parties will determine the form and characteristics of the alliance before the end of the year. Initial efforts will focus on Karelia and the Murmansk Region. "In these areas we have resources - Karelsky Okatysh in Karelia and the Olenegorsky mining and processing plant in the Murmansk Region," said Sergei Loktionov, a spokesman for Severstal Resource.
"The zinc and copper market outlook is quite favorable for the next two years," said Broker Credit Service analyst Vyacheslav Zhabin. "The auto industry, especially in China, is on the rise, and so is demand for zinc-plated car bodies."
Anglo American's main product - platinum - is also on the rise thanks to the automotive industry. Europe is introducing Euro 3, 4 and 5 standards to cut car emissions. Catalyst surfaces production will increase, as will demand for the platinum needed to coat them.
"Anglo American is interested in Russia's resource base, as it can be acquired for a low price," said the analyst. "Besides, they have colossal experience in the exploration and development of deposits, and enormous financial resources."
Last year the mining multinational posted turnover of $34.4 billion, EBITDA at $8.9 billion and $7.2 billion in net profit. Severstal's financials look less spectacular: in 2005 its turnover was 143.1 billion rubles (roughly $5 billion) and net profit was 34.3 billion rubles ($1.2 billion).
No small factor in Severstal's about-turn towards non-ferrous metals has been its preparations for an IPO in London, which Mordashov's company launched right after its move on Arcelor. The mandate for an IPO with a preliminary value of up to $1.5 billion has been issued to three investment banks - Citigroup, Deutsche Bank and UBS.
"Severstal wants to show to potential investors that it is not only occupied with rolled steel, but is actively diversifying its business," Zhabin said.
Izvestia
Most Russians feel surrounded by enemies - sociologist
Alexander Oslon, general director of influential pollster Public Opinion Foundation, said 69% of Russian respondents believe that there are countries that could declare war on Russia. Georgia and the United States topped the list with 31% and 29%; Ukraine and China are each considered enemies by 5% of the pollees.
Oslon said Moscow residents largely share this opinion. However, their views differ when it comes to discussing money, apartments and cars.
He said the majority of people support the official stance, and are struck by the alliance between Georgia and the United States, which is traditionally viewed as a hostile country.
Virtually all Russians have a negative opinion of Georgian President Mikheil Saakashvili, said Oslon. Nobody pays any attention to other politicians, who sometimes make provocative statements, he told the paper.
He said Saakashvili's statements instantly provoke a heated reaction, but the attitude toward Saakashvili and the Georgian authorities apparently does not reflect that toward all other Georgians.
The Georgian diaspora in Moscow, which is not linked with organized crime, will feel uncomfortable for a while, Oslon told the paper. The police are exerting greater pressure on local Georgians; and many Russians either want to take part in this campaign or to gain favor with the authorities.
Both legitimate and criminal rivals are closely watching heightened monitoring of Georgian businessmen by Moscow's law enforcement agencies, said Oslon.
Nezavisimaya Gazeta
Regional 2006 elections no indication of 2007 parliamentary elections
Elections to the legislative assemblies of nine Russian regions are scheduled for October 8. According to the Central Election Commission, about 14 million people, or some 10% of voters, will come to the polls. But experts warn against overestimating their importance for predicting the 2007 parliamentary election results.
Firstly, half of the regions (with the exception of the Sverdlovsk Region in the Urals) still use old rules stipulating the election of deputies from single-mandate constituencies, while the federal parliament will be elected according to party lists.
Secondly, the lineup of parties may change dramatically, as the establishment of a bi-party system is progressing apace, but the new alliance of 'actual left-wing parties' has not had time to participate in the October elections.
Thirdly, although a third term for President Vladimir Putin was actively discussed in the summer and early fall, this has not visibly influenced the electoral situation in the nine regions. People do not tend to apply their presidential expectations to local parliaments.
Alexei Makarkin, deputy director of the Center for Political Technologies, said the party system was not yet fully developed, which is the main distinction between the fall elections and the 2007 parliamentary campaign. Many future players have not yet had time to express their views.
"Most importantly, the leftwing-centrist project has not materialized yet," he said. "Its component parts are running in the regional elections independently and even as rivals. At the same time, the liberal flank is also insufficiently developed."
Alexander Veshnyakov, chairman of the Central Election Commission, said he doubts that the October elections could be used to predict the outcome of the 2007 parliamentary race. Alexander Ivanchenko, his predecessor and the current director of the Independent Elections Institute, fully agrees with him, but for a different reason.
"The current election campaign cannot be viewed as proper primaries because it fully depends on administrative resources." It is being "manually controlled", with the resources being artificially redistributed between different parties of power, he said.
