MOSCOW, March 21 (RIA Novosti) U.S. sees new hurdle to Russia's WTO membership/ Russian part of TNK-BP to be controlled by state-run company/ Rosneft tries to reduce legal risks at Yukos' auction - expert/ Russia to establish up world's No.2 tanker company/ Russians say they have never had it so good - poll
Kommersant
U.S. sees new hurdle to Russia's WTO membership
Current consultations in Washington between Russian negotiators, the U.S. presidential administration and the European Union on Russia's WTO accession are threatening to erupt into a scandal. Sources in the U.S. State Department told Kommersant Tuesday they doubt whether Russia will be able to agree entry terms with the EU before the end of the year.
The talks are taking place in Washington, because the U.S., as agreed between presidents Vladimir Putin and George W. Bush, is trying to help Russia solve numerous problems surrounding the WTO negotiations.
Following Tuesday's talks between Russian negotiators and Dorothy Dwoskin, Assistant U.S. Trade Representative for WTO, a source in the American administration said Russia was facing serious problems. In the opinion of the source, the deadline announced by Economic Development and Trade Minister German Gref (the end of 2007) has little to do with reality. The source does not believe Moscow is complying with requirements established at EU negotiations.
According to the source, representatives of European and other countries consider that the White House, by signing a bilateral protocol on WTO admission with the Kremlin, was acting the role of the "good guys", leaving them to play the "bad guys."
In the end, the source said, the Europeans will not approve Moscow's entry to the WTO, and there is nothing the U.S. can do about it.
Officially, the Economic Development and Trade Ministry said that no WTO negotiations are currently underway in the U.S., and what is taking place are "unofficial consultations." However, the European Commission representatives have made no comment, although many sources indicate that apart from old grievances against Russia the EU now has new ones, which could "crop up" officially at multilateral WTO negotiations.
A spokesman for a large Russian company familiar with the progress of the consultations said that European officials are highly critical of the Economic Development and Trade Ministry's long-lasting anti-monopoly probes. The main problem, however, is Russia is slow to fulfill its commitments to amend trade legislation and practices: the EU simply fears that Russia may continue its current policies even after joining the WTO.
Gazeta.ru
Russian part of TNK-BP to be controlled by state-run company
Half of Russian-British oil venture TNK-BP will most likely become the property of a state-controlled Russian company, such as Gazprom. And according to experts, having a monopolist among TNK-BP shareholders will act as a competitive advantage for the company, but is unlikely to facilitate development of the sector.
The top management of British Petroleum "has warned western investors that it could soon be forced to share control of its highly profitable Russian joint venture, TNK-BP, with a Kremlin-controlled energy group such as Gazprom or Rosneft," The Guardian wrote March 20.
Experts are convinced that the Russian owners of TNK-BP will sell their shares to Gazprom or Rosneft.
Natalya Milchakova, an analyst with the Otkrytie brokerage, said: "TNK-BP's warning issued to its shareholder regarding sharing control with a state-controlled Russian company clearly means that the company is prepared to tolerate the presence of Rosneft or Gazprom. Moreover, TNK-BP management probably views this scenario as an opportunity to gain a competitive advantage, because Russia is the main oil market that BP operates in and where oil production is increasing."
According to Milchakova, Gazprom is the most likely buyer of the Russian stake in TNK-BP, because the acquisition would be in line with its strategic goals.
"Rosneft has different objectives now, such as buying Yukos's assets," Milchakova said. "The state-run oil company has taken on a big loan ($22 billion) for that purpose, and is unlikely to fight on two fronts simultaneously."
The problem is that Gazprom being part of TNK-BP will benefit the Russian-British venture, but not the sector as a whole.
Maxim Shein, an analyst with investment company Broker Credit Service, said: "The state is no longer satisfied with using administrative levers to influence the economic situation as a whole with regard to foreign companies. It is now accumulating resources and establishing mega-holdings - Gazprom and Rosneft - which will be used to influence different sectors of the economy."
TNK-BP was set up in 2003 as a parity venture of British Petroleum and a consortium of Alfa Group and Access/Renova. Its net profits according to US GAAP increased 21%, to $2.901 billion, in the first half of 2006.
Gazeta
Rosneft tries to reduce legal risks at Yukos' auction - expert
The board of directors at Rosneft, a state-owned oil major, has approved two large loans that will allow it to take an active part in the purchase of assets from the beleaguered Yukos oil company, now bankrupt. Rosneft plans to borrow $13 billion from a consortium of banks. It will also guarantee a $9 billion loan to be taken out by its 100% subsidiary, RN Razvitiye. Analysts believe that the latter could play the same role as the Baikal Finance Group once did. The obscure company bought Yukos' key production asset, Yuganskneftegaz, at an auction and was taken over by Rosneft a few days later.
Both loans will be provided by the same syndicate of leading international banks: ABN Amro, Barclays, BNP Paribas, Calyon, Citibank, Goldman Sachs, JPMorgan Chase and Morgan Stanley. The interest rate for both loans is 5.5-6% annually.
The $13 billion loan period is for a year and Rosneft is expected to use the money to buy five of Yukos' oil refineries that are up for auction.
RN Razvitiye will take the loan for a term of 18 months. When asked about what kind of operations it will be engaged in, a Rosneft representative said, "Various. Among other things, it will represent our interests at the auction."
RN Razvitiye is Rosneft's subsidiary company, controlled through a daughter company, RN Trade, with an authorized capital of 10,000 rubles (about $380). In December 2004, the state-owned major paid the same amount for Baikal Finance Group, which bought Yuganskneftegaz at an auction a few days before.
Analysts believe that Razvitiye will now try to buy the 9.4% stake in Rosneft held by Yukos. The auction is scheduled for March 27.
The subsidiary will help Rosneft to avoid potential litigation, said Maria Kronberg, financial analyst with the law firm Strategy of Corporate Law. "I do not think that the state-owned company seriously fears any lawsuits from Yukos' minority shareholders, but, apparently, it has decided to minimize legal risks," she said.
Being one the Yukos' creditors, Rosneft hopes to recoup much of what it pays at the auction.
Kommersant
Russia to establish world's No.2 tanker company
Yesterday, Russia eliminated the final obstacle to a merger of its two largest shipping companies which has been under discussion since 2004. The Economic Development and Trade Ministry endorsed the transaction bringing the state-owned stake in Novoship to the authorized capital of Sovcomflot. A merged company with over $4 billion in assets could appear before July. It will have the second largest fleet among global tanker companies. However, having endorsed the merger, officials decided to place some financial commitments on the new company's management.
Sovcomflot is 100% state-owned, while the government's holding in Novoship and its subsidiaries is 87.4%. All corporate procedures could be completed before July, said Deputy Economic Development Minister Kirill Androsov.
The new company's assets will exceed $4 billion. Its sales are projected at $844.6 million with an operating profit of $707.1 million. Its fleet will be the second largest among global classic tanker companies, behind Frontline, but before Teekay, and the fourth largest of the industrial shippers - Japanese Mitsui O.S.K. Lines and Nippon Yusen Kaisha - have been taken into account. Sovcomflot and Novoship jointly own 113 ships, including 97 tankers (excluding commissioned ships).
The companies declined to comment on the decision yesterday. But it is already known that officials intend to place certain commitments on the merged shipper. A special agreement to be signed between its board and management will create three sets of commitments, Androsov said. The company will undertake to ensure certain revenue, capitalization and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in 2007-2010, to develop marine hubs in St. Petersburg and Novorossiisk (shipbuilding, ship repairs, marine shipments and naval education), and place shipbuilding orders with Russian shipyards.
A source in Sovcomflot said that it was the management's initiative. Commitments have yet to be set out in more detail. Earlier the company said it planned to invest about $1 billion to develop the country's shipbuilding sector.
Vedomosti
Russians say they have never had it so good - poll
More and more people are enjoying living in Russia, say pollsters from the Center for the Study of Socio-Cultural Changes of the Russian Academy of Sciences' Institute of Philosophy. Those pleased with their lifestyle have increased from one-sixth in 1990 to over half last year (54%). A total of 82% of respondents are happy they live in Russia, and only 2% would like to move elsewhere.
In the mid-1990s, pessimists outnumbered the optimists by three to one. Now the opposite is the case. Optimists claim their life has significantly improved, compared with last year, they feel secure in the future and that things are getting even better.
A study carried out by the center for strategic investigations at Rosgosstrakh, the largest Russian insurance company, at the end of 2006 confirmed the statistics. An overwhelming majority of those interviewed also said things were looking up; respondents expect their incomes to rise by an average of 36% over the next five to seven years.
This rise in the percentage of those Russians content with life is down to more people in society being educated in the post-Soviet era, says Alexander Oslon, director of the Public Opinion Foundation. "Today's younger generation feel they have an opportunity for self-fulfillment, and if the trend persists, optimism is expected to grow."
Politicians in office and consumer goods producers could benefit from Russian's upbeat mood, believes Alexander Demidov, CEO of the GfK Rus pollster. Optimism, he says, usually goes hand in hand with prosperity, and people begin buying real estate, cars, electrical goods, saving money, and insuring their property.
Politicians in office also benefit from the feel good factor, said Andrei Samoshin, a member of the United Russia Duma faction: on the one hand, it is a measure of their activity, on the other, a promise of future loyalty. The opposition, on the other hand, is having a bad time: its goal is to persuade people things are going the wrong way, the deputy said.
Inflated expectations may result in social disaffection, said political scientist Dmitry Badovsky. In his opinion, the positive mood in society is down largely to Vladimir Putin as president of "great expectations", while a new chief could cause disappointment among people if they do not deliver the goods.
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