MOSCOW, October 18 (RIA Novosti) Gazprom warns foreign investors against judicial corruption in Russia/Russian, Chinese oil venture to develop East Siberian deposits/Moscow district court refuses to consider lawsuit/Oligarchs should not linger in governor posts/Another Social-Democratic alliance in the offing
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Vedomosti
Gazprom warns foreign investors against judicial corruption in Russia
Gazprom has warned that Russian courts may favour national companies, and that foreign investors might face corruption and "political resistance" to the execution of judgments awarded to them by international arbitration, the Russian energy giant said in an investment memorandum. This is a formality, but a very prejudicial one to national justice, say experts.
In its memo on the issue of Eurobonds, worth $15 billion, Gazprom spoke a well-known truism, confirms MDM-Bank analyst Mikhail Galkin.
But a legal expert with a major oil company said that all judges should not be tarred with the same brush, adding that his corporation never made such statements. He is surprised at Gazprom's fears: "What sways courts now is bureaucratic brawn, which the monopoly enjoys in full."
Yevgeny Rashchevsky, a lawyer with the Yukov, Khrenov and Partners bar association, thinks Gazprom is being overcautious: "Indeed, why not mention the risks in case investors consider the Russian judiciary ineffective?"
But judges disagree with the charges of inexperience, lack of commitment and corruption aimed at them. "Such statements are backed up neither with arguments nor statistics," protests Tatyana Neshatayeva, a judge with the Superior Court of Arbitration.
"Our courts have been hearing cases involving foreign nationals for 11 years now, up to 2,000 a year." She said that despite the absence of bilateral agreements, Russian courts implemented the rulings of foreign courts in favor of Yukos shareholders.
"Of late, the Russian arbitration system has been functioning very consistently. And they have been removing any unclear points that might provoke abuses, both on the part of business and judges," she said.
Big corporations themselves have helped cultivate disrespect for the national judicial system, said Alexander Shmakov, a partner with the law firm Russkiye Eksperty.
"In their day, they corrupted the courts, making them tools in their corporate wars," he said. "As a result, there is now massive contempt for our judiciary. British law is the guarantee of transactional fairness now, and a village court in Cyprus now enjoys more trust."
Biznes
Russian, Chinese oil venture to develop East Siberian deposits
China intends to produce oil in East Siberia and deliver it through the Eastern Siberia-Pacific Ocean pipeline at a profit. In return, China is ready to invest in East Siberian deposits that Russia has been unable to develop on its own.
Russian state-controlled oil company Rosneft will control 51% in the Vostok Energy venture, and China National Petroleum Corporation (CNPC) 49%. Three out of five board members will be Russian.
"China is ready to buy a lot [of oil] at a good price," said Natalia Yanakayeva, an analyst with the CenterIvest investment group. She said China will control a few deposits, each containing an average 50-100 million metric tons of oil.
The venture will primarily develop deposits in East Siberia, Yanakayeva said. She said under amendments to the law on mineral extraction that will come into effect next year, companies will be given tax privileges for developing deposits in East Siberia from scratch.
Analyst Vladislav Metnev, from the Troika Dialog brokerage, said that with the purchase of Udmurtneft by Rosneft and Sinopec, and the establishment of the joint holding Rosneft and CNPC, the Russian state-run company will control the Chinese direction of the Russian oil industry in the future.
Rosneft head Sergei Bogdanchikov declared that the Russian-Chinese venture will take an interest in all promising areas in East Siberia, including the Yurubcheno-Tokhomskaya oil field, one of the largest.
However, Vostsibneftegaz, a subsidiary of the oil company Yukos, holds the license to develop the field, which, the Federal Agency for the Management of Mineral Resources said, may be cancelled unless Yukos resumes financing the project and removes licensing-related violations.
Kommersant
Moscow district court refuses to consider lawsuit
The Presnensky District Court in Moscow has refused to consider a lawsuit filed by the Federal Service for the Oversight of Natural Resources against the Natural Resources Ministry to enforce the annulment of a 2003 environmental review for the Sakhalin II project.
The Natural Resources Ministry, which has promised to decide the project's future October 25, is therefore firmly in control.
Dmitry Kolosov, head of the service's legal department, said the court has turned down the lawsuit because it believes the agency had no right to file it.
Lawyers from the Natural Resources Ministry insist the environmental watchdog is an inappropriate claimant.
If the court upholds the demands of the environmental watchdog, all activities under the Sakhalin II project will be suspended. It means that construction of new pipelines and a liquefied natural gas plant will be delayed.
Initial gas deliveries are to begin in mid-2008. However, new deadlines will have to be set, because it will take at least a year to coordinate the new documents. Sakhalin Energy, which operates the project, estimates possible losses at $10 billion.
The Natural Resources Ministry, which insists that the court turn down the lawsuit, did not use the opportunity to decline responsibility for suspending the environmental review.
Officials apparently fear that the court will uphold the claimant's lawsuit and refuse to declare the environmental review unlawful. The Natural Resources Ministry would then have faced a difficult situation.
"This looks like blackmail, because the review can still be annulled at any time," Dmitry Tsaregorodtsev, an analyst with FIM Securities, told the paper.
Ministerial officials said Minister Yuri Trutnev promised the decision to annul the environmental review will be made after the results of a check of Sakhalin Energy's performance are summed up October 25, when it becomes clear whether all violations can be eliminated.
"I believed a month ago that the environmental review would be annulled, but now I think it will not happen," said Denis Borisov, an analyst at Solid brokerage.
Many experts linked a possible amicable settlement with talks between energy giant Gazprom and oil major Royal Dutch Shell, which owns a 55% stake in Sakhalin Energy, on involving the Russian side in the project.
Shell representatives have repeatedly said their talks with Gazprom will succeed in the next few months.
Gazeta.ru
Oligarchs should not linger in governor posts
Last Tuesday, a day after news came of a scandal in Roman Abramovich's family, informed sources said another major change awaited the oligarch -- Abramovich may step down as governor of Chukotka.
Experts believe the scenario is possible, but they differ in their forecasts of the Kremlin's reaction.
A source close to the regional administration confirmed that there were such rumors in Anadyr, the regional capital, and that they "may be grounded."
Vitaly Ivanov, deputy director of the Center for Current Policies, said the rumors are probably related to Abramovich's own wish to cede his gubernatorial post, and added that these plans "are unlikely to be implemented due to the Kremlin's unwillingness to change anything in the region."
The political scientist does not believe the Kremlin itself is seeking Abramovich's resignation, as he was reelected as governor quite recently, in 2005.
The department head of the Social Systems Institute, Dmitry Badovsky, believes rumors about Abramovich's resignation may be true. "When he was reelected a year ago, they said he was reluctant to stay in power," the political analyst said.
"They said his consent followed agreements with Putin. There were rumors back then that he would be reappointed for a year, and that he would step aside as soon as Gazprom buys Sibneft. And it would not have been nice if they dismissed Abramovich soon after the sale."
In addition, the analyst said, "the current situation" suggests that the rumors may be true -- according to some sources, the Kremlin asked Abramovich to establish a metals mega-company on the basis of Evraz Holding, in which he controls 41%.
"The project requires much effort, and his gubernatorial post will be an obstacle," the expert said.
The analyst said Abramovich has often featured in gossip columns recently. "This discredits the very institution of governorship and the scheme of presidential appointments in the regions," said Badovsky. The Kremlin will not oppose Abramovich's resignation this time, he said.
Gazeta
Another Social-Democratic alliance in the offing
At the end of November, one more left-wing party project may be launched in Russia. The coalition of the "New Left" has invited the People's Party of Gennady Gudkov, Gennady Semigin's Patriots of Russia, Vladimir Kishenin's Social Democrats and the Social Justice Party of Alexei Podberyozkin to join it.
If some people find the alliance of these very small and un-influential parties funny, the situation can be corrected by throwing in a party heavyweight. A source said Sergei Glazyev, Rodina ex-chairman and leader of the public movement "For a Worthwhile Life," might join the alliance to become the leader of the new party.
The former presidential candidate has already backed the "New Left's" initiative, saying he is "ready to render support to the unification of all sound popular patriotic forces who give pride of place to ordinary people's interests." Gudkov, who has repeatedly urged in recent months the creation of a "New Left" party "preaching Social Democratic ideology," said negotiations with Glazyev are under way.
Dmitry Oreshkin, head of the Mercator think tank, explains Gudkov's efforts to set up a united center-left party as a pragmatic step. "Most of the present members of the United Russia faction, with the People's Party belonging to it, will fail to make it onto the future election list, simply because it must feature new regional politicians and new lobbyists.
"It appears some of the United Russia deputies, especially those who reached the Duma from single-seat constituencies or through the People's Party and then joined the United Russia faction, will be outsiders. They have no chance of keeping their seats in a new Duma," he said.
He said in such a situation, Gudkov is left with nothing to do but "build his own party." But Oreshkin is sure the chances of a new united party - even if it combines forces with the center-leftists out in the cold - are small. "First, Gudkov lacks the kind of bureaucratic clout available to [Federation Council Speaker Sergei] Mironov. Second, the political territory he is claiming is already taken over by the 'Contemporary Left'," Oreshkin said.
