MOSCOW, February 26 (RIA Novosti) Expert's view on why Russia wants back its missiles/Gazprom to develop oil and gas fields in Bolivia/Siberia - Pacific pipeline construction seen delayed indefinitely/Gazprom transfers control of oil exports away from Yukos/Russian steel tycoon eyes large plant in Britain
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Nezavisimaya Gazeta
Expert's view on why Russia wants back its missiles
Withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty is not a response to the deployment of the American anti-ballistic missile defense (ABM) in Europe, said Ivan Safranchyuk, who heads the Russian World Security Institute's Moscow office.
In the 1980s, it was crucial to free Europe of American medium-range missiles, which could reach Moscow in six to eight minutes. This was done under the INF Treaty in 1991. But in the 1990s, Russia began to be increasingly concerned over the threat emanating from the South. In 2000, a Russian high-ranking official spoke of a possible missile strike against Afghanistan. He was showered with criticism, although the threat was very real - in 1999-2000 the Islamic fundamentalist Taliban were trying to break into Central Asia. However, it was no more than wishful thinking - Russia did not have the right ground-based missiles.
To sum up, Russia has enough reasons to restore its missile arsenal prohibited almost 20 years ago. But what does ABM have to do with it?
Maybe Moscow wanted to scare Europe a bit. The Europeans were convinced that strategic missiles would fly to the United States, whereas medium-range weapons were designed for Europe, most probably, to punish it for American sins. These Russian warnings have given France, and particularly Germany, every reason to interfere in the U.S. talks with Poland and the Czech Republic, and ask them why they are discussing bilaterally issues with potential repercussions for the whole of Europe. Why not take them to NATO, in which case the outcome might be different?
It makes sense not so much to scare Europe, as to give it one more pretext to interfere in the U.S. bilateral talks with Warsaw and Prague. At any rate, the INF should not be bargained away for Europe-based ABM, because Russia needs missiles for a different reason.
The INF Treaty outlawed medium-range missiles with nukes whereas now Russia would equip them with conventional warheads. When the ABM-related emotions abate (regardless of whether the ABM plan goes through or not), it may be reasonable for Russia to initiate amendments in the INF Treaty. Russia will not aim its conventional missiles at partners - European countries, or China. Hence, they should not overreact to this.
Vedemosti
Gazprom to develop oil and gas fields in Bolivia
Russian energy giant Gazprom has expressed interest in the natural resources of Bolivia, which is nationalizing its oil and gas industry.
On February 21 Gazprom signed an agreement with the Bolivian state company Yacimientos Petroliferos Fiscales Bolivianos (YPFB) to explore and develop oil and gas fields as well as produce liquefied natural gas (LNG). The companies have not discussed any particular projects, YPFB representative Luisa Limachi told Vedomosti.
Last year Bolivian President Evo Morales signed a decree giving YPFB 50% plus one share in six local oil and gas companies previously owned fully or partially by British Petroleum (BP), Brazil's Petrobras, Spain's Repsol, local companies and pension funds. They had invested $4 billion in the country's oil and gas industry since the early 1990s. Recently Morales announced that a tin smelter owned by Switzerland's Glencore will be nationalized.
Stanislav Tsygankov, head of Gazprom's foreign relations department, said that the company supported Morales' decision to tighten control of the country's natural resources.
Gazprom has worked under similar conditions before. In 2005, Gazprom and Petroleos de Venezuela S.A. (PDVSA), Venezuela's state-owned oil and gas company, signed a cooperation agreement to explore and develop the Urumaco-1 and Urumaco-2 gas fields in the Gulf of Venezuela over a 30-year period.
Valery Nesterov, an analyst with Troika Dialog, said that Gazprom aimed to be a key player in the energy market, but its presence was not welcome in every country. He noted that the monopoly was interested in the construction of a South American gas pipeline connecting Venezuela, Brazil, Argentina and perhaps Bolivia.
Bolivia has Latin America's third largest natural gas reserves (two trillion cubic meters), behind Venezuela and Trinidad and Tobago. Its oil reserves amount to about 450 million barrels. In 2005, its daily production volume was 39.64 million cubic meters of gas and 50,000 barrels of oil.
Vremya Novostei
Siberia -- Pacific pipeline construction seen delayed indefinitely
Construction of a second oil pipeline connecting fields in East Siberia to the Pacific coast may be delayed indefinitely, some say in Russia. Prime Minister Mikhail Fradkov and Industry and Energy Minister Viktor Khristenko may try to find new sources of financing for the project during a visit to Japan later this week.
Japan, eager to get access to Russian oil, has been trying to persuade Moscow to build the 5,000-km pipeline since 2000. In 2002, it proposed to ensure financing for the entire $5 billion project. Russia, however, was considering a route to China at the time and did not respond to the offer. The Russian government found a compromise in 2003, deciding to build the pipeline to the Pacific with a branch to the Chinese city of Daqin.
Khristenko has said a decision on whether to build a second line will be made only after oil reserves in East Siberia have been confirmed. A source in the Natural Resources Ministry said this might not happen until 2011-2012.
The Natural Resources Ministry and the Federal Agency on Subsoil Use say that, given the current pace of exploration, East Siberian reserves will be able to supply the 80-million-ton capacity pipeline with only 30 million metric tons of crude a year by 2008.
"The implementation of the second stage of the project should be in line with the program of East Siberia's development, which envisages a gradual increase in reserves," the source said. "So the government is unlikely to decide on the second stage until 2011-2012."
Another ministry official said, "East Siberia has huge hydrocarbon resources, but to confirm them, we need to conduct a detailed seismic survey and to drill exploration wells, which requires quite a lot of time." So the announced three or four years may not be enough to get access to sufficient reserves for the pipeline's commercial use.
Besides, the project's costs have soared already. Transneft, Russia's state-owned pipeline monopoly, which in 2004 costed the entire project at $11.5 billion and the first pipeline at $6.6 billion, now says the first alone may cost it $13.2 billion due to inflation and changes it had to make to the route.
Kommersant
Gazprom transfers control of oil exports away from Yukos
Russian energy giant Gazprom said it was transferring oil exports to its own branch away from a company which is still partially owned by the embattled YUKOS. Exports of Gazprom Neft, formerly called Sibneft or the Siberian Oil Company, will now be controlled directly by Gazprom Export, the giant's export arm.
Industry experts said Gazprom was trying to reduce the price of a 20% Gazprom Neft stake being sold as part of struggling oil giant YUKOS' bankruptcy proceedings.
Gazprom Neft will become a Gazprom division, after the deal is closed.
Gazprom Neft's report for 2005 estimated export revenues at $10.35 billion.
Until now, the Austrian-registered Sibneft Oil Trade Company (Siboil), fully owned by Gazprom Neft, handled all of its crude oil and petroleum exports.
Market players said the Swiss trading company Gunvor that now buys virtually all Gazprom Export oil will become the ultimate beneficiary, after Gazprom Neft loses its status as an export-contracts operator.
The newspaper said Gunvor was reportedly controlled by Gennady Timchenko, co-owner of commercial bank Rossiya and a former colleague of President Vladimir Putin at the KGB's First Directorate in charge of foreign intelligence.
Moreover, Timchenko reportedly co-founded the elite sports club Yavara-Club, of which Putin is an honorary president.
According to Kommersant's sources, the contracts will be transferred to Gazprom Export in July-December 2007.
A source at Gazprom Group said Gazprom Neft would change its property status to that of a limited company.
Nadezhda Kazakova, an oil and gas analyst at MDM Bank, said Gazprom would be obliged to buy out minority shareholders, after buying 20% of Gazprom Neft.
She said limited companies were not obliged to publish financial reports according to international or Russian standards; nor did their corporate boards and shareholders' meetings have to approve every deal. This made it easier to clinch in-house deals and transfers of assets.
We will only know about key decisions in the sphere of oil production and refining," said Kazakova. She said it would be "very hard" to assess the efficiency of Gazprom's oil operations.
Gazeta
Russian steel tycoon eyes large plant in Britain
Severstal, owned by Russian tycoon Alexei Mordashov, may buy the Scunthorpe steel plant, one of the largest in Britain, for $1.95 billion.
The plant belonged to the British-Dutch Corus Group which was bought by India's Tata Steel for $11.3 billion in late January. Severstal has officially dismissed the report as a rumor but has not denied it. "We do not comment on market rumors," said Olga Antonova, Severstal press secretary.
There are several arguments to support such rumors. First, interest in the Scunthorpe plant would be fully in line with Mordashov's strategy of acquiring foreign steel assets. The Russian magnate, who tried to buy industry giant Arcelor last year, constantly stresses that Severstal is ready to consider a merger with steel companies from Europe, Asia, South and North America.
To get better access to foreign markets, Severstal carried out its initial public offering in London last November and was priced at 6.5 billion pounds (nearly $12.7 billion). Preliminary figures show that in 2006 the company increased steel smelting by 4.8% on the previous year to 17.6 million tons, with foreign assets accounting for 35% of output.
Second, analysts see synergy in the purchase of the British plant. "The Scunthorpe plant does not have slabs, Severstal does," said Alexander Pukhayev, an analyst with Deutsche UFG. Production of inexpensive slabs and untreated steel at "cheap" Russian plants from relatively low-cost iron ore will be compensated for by production of more expensive products at foreign plants.
The possible purchase of foreign assets by Severstal is supported by rumors about Tata Steel's readiness to sell. British sources say Tata intends to sell two Corus divisions which produce long rolled stock, the Scunthorpe and Rotherham plants.
