What the Russian papers say


MOSCOW, March 22 (RIA Novosti) BP ready to sign deal with Gazprom/Russia ready to build pipeline bypassing Belarus/Sberbank compensates losses from additional issue placement/Courts defy Russian executive branch/Moon must be studied but no need to send cosmonauts there


BP ready to sign deal with Gazprom

Lord John Browne, CEO of British Petroleum (BP), one of the world's largest transnational oil corporations, is going to visit the Kremlin soon and introduce Tony Hayward, his successor, to Russian President Vladimir Putin.
Good relations with the country's leader could be useful for the British company, which is facing a threat to its business in Russia.
BP's main asset in Russia is a 50% stake in TNK-BP, a Russian-British joint venture and a leading Russian oil company. The remaining 50% stake is divided between Russia's Alfa Group consortium, Access Industries and Renova Group.
Russian gas giant Gazprom, which has started developing its oil business, has shown interest in TNK-BP, a successful private company. TNK-BP's present owners do not want to sell it (it is a profitable business for Russian shareholders and an opportunity to consolidate its subsidiary's reserves for BP).
Life shows that when a big state corporation (be it Gazprom or any other company) sets its eyes on an asset, it will get it. It depends on the owner's pliability how it happens.
Those who do not want to part with their assets may go to Krasnokamensk (in Siberia) or some other place far away. However, there are more cautious and pragmatic investors. They believe it is better to lose a part than everything.
The Anglo-Dutch Shell concern had no desire to cede control over the Sakhalin II oil and gas project to Gazprom.
The company has a low reproduction rate, that is, the new reserves/production ratio (it was 78% in 2005 against Exxon Mobil's 112%). It needs new assets, but it had to give up the old ones.
The company's pliability was rewarded. All Sakhalin II shareholders halved their shares and received $7.45 billion for them from Gazprom.
The project was immediately dropped by inspectors, who only a week prior to the announcement of the transaction had given it up for lost.
Farkhad Akhmedov, formerly the sole owner of the Nortgas private gas company, has given half of Nortgas to Gazprom.
BP is a pragmatic investor, like Shell. In the opinion of a BP manager, conditions in Russia are fine. People work even in Nigeria, where they may be killed at any time, he said.
That means that BP is likely to agree to the deal with Gazprom if it has no other way out. The question is whether there is anything that could frighten one of the world's largest corporations.


Russia ready to build pipeline bypassing Belarus

Plans for the Unechha-Primorsk pipeline, which will bypass Belarus, have been forwarded to the Russian government. The project may halve transit oil deliveries to Belarus, forcing Lithuania to bring in Russian oil using tankers.
Belarus and Lithuania view this as Russian political pressure, but Europe will appreciate this solution to "the Lukashenko problem."
When the new pipeline is completed, Russian oil designated for export along the Druzhba pipeline could be redirected to Pirmorsk, loaded onto tankers there and sent on to European Union countries.
Construction should start in April 2007. Pipeline monopoly Transneft, which will operate the bypass project, expects to complete it within 18 months. The design capacity of the pipe is 50 million metric tons.
Passions have been growing over the Druzhba pipeline since early 2007. The accident-prone Unecha-Polotsk leg of the pipeline used to deliver oil to Belarus and Lithuania but has been cut off.
Lithuania did not approve tanker deliveries, and when Transneft head Semyon Vainshtok said the pipe might not be reopened, Lithuania appealed to Belarus and Ukraine to boycott Russian oil.
The new pipeline will not reach Lithuania and will deprive Belarus of a considerable amount of transit oil.
Sergei Grigoryev, vice president of Transneft, said that about 100 million metric tons of oil has currently been delivered to Belarus along the pipeline, of which 20 million was refined there and the rest sent on to Europe.
"The construction of the Unecha-Primorsk pipeline will deprive Belarus of 50 million metric tons of transit oil," Grigoryev said.
It is difficult to calculate the overall losses that the "fraternal" republic will suffer, but they can be tentatively estimated at $80-$100 million, which is a huge sum for Belarus.
But the main loss will be political. President Alexander Lukashenko will lose one more lever to influence international policy.


Sberbank compensates losses from additional issue placement

Yesterday, Sberbank, Russia's largest bank, completed the placement of an additional issue of shares.
Although it managed to sell no more than 2.8 million of the announced 3.5 million shares, the placement has already been described as successful. Experts said that the bank used all means at its disposal to fulfill the political task of a successful placement.
Sberbank's management was insistent and even "intrusive," as a banker put it, trying to induce the larger minority shareholders to fully exercise their pre-emption rights.
Several sources close to the larger shareholders confirmed the report. The placement was made more "popular" thanks to Sberbank's 200,000 employees, who were encouraged to buy shares through bonuses, and even directly ordered to do so.
A source close to the placement organization said that the bank's biggest losses came from foreign investors, for whom the need to prove their solvency overweighed the stock's attractiveness.
"This shocked many. They said that the stock was very interesting, but that they would not buy," he said. That is why bids from existing foreign shareholders of the bank accounted for 75% of all foreign bids, he said.
What Sberbank failed to raise on the foreign market it made up for through administrative resource.
The support market players witnessed March 5, when Sberbank's stock first fell to 85,000 rubles, but then grew to 91,500 rubles after aggressive purchases, showed that the stock will not be allowed to drop below the announced price even under unfavorable circumstances.
So there was no negative signal for outside investors that formed the key risk group, as they did not have enough motives to buy the bank's shares no matter what.
Now, market players will focus on the forthcoming initial public offering of another state-owned bank, VTB.
Many investors may want to sell their holdings in Sberbank, analysts say.
Mikhail Rozin, CEO of the management company Promsvyaz, said that interest in VTB would be higher than in Sberbank, because "the other state-owned bank's stock, which is not traded on the market yet, has bigger speculative opportunities."


Courts defy Russian executive branch

On Monday, the notorious Basmanny District Court in Moscow, which had sentenced the disgraced oligarchs and former co-owners of the embattled oil giant Yukos, Mikhail Khodorkovsky and Platon Lebedev, to eight years for fraud and tax evasion in 2005, upheld a lawsuit against the Prosecutor General's Office and allowed their transfer from Siberian prison camps to a Moscow prison.
On Tuesday, the Constitutional Court upheld the Russian Communist Party's lawsuit against one of the referendum law's provisions that made it pointless to hold nationwide plebiscites.
Both court decisions imply that the Kremlin is making concessions to the opposition.
Some experts believe the Russian power vertical is becoming weaker.
Representatives of the government, the State Duma and the Federation Council, the two houses of the Russian parliament, declined to comment on the Constitutional Court decision.
The Communists called the verdict a victory. Vadim Solovyov, the party's secretary for legal issues, told the paper he is 90% satisfied. He said the lawsuit is "an icebreaker that will be followed by other ships."
According to Solovyov, the Communist Party will soon file another lawsuit against the law on countering extremism with the Constitutional Court.
The Communists, who are dizzy with success, promised to launch preparations for a nationwide referendum in 2008.
The projected plebiscite is to discuss the monetization of benefits, universal military service, the private ownership of land and the abolition of gubernatorial elections.
Unlike Solovyov, independent experts are feeling less optimistic.
"This is a compromise decision aimed at correcting past mistakes, rather than a Communist victory," said Alexander Ivanchenko, director of the Independent Institute of Elections.
He said it is forbidden to hold referendums on a par with State Duma and presidential elections. Consequently, the plebiscite will not take place before 2009.
Mark Urnov, president of the analytical programs foundation Ekspertiza, said something strange is now happening with Russian courts.
"The Constitutional Court has made things easier for the Communists, and the Basmanny court has unexpectedly decided to try Khodorkovsky in Moscow, rather than Chita," Urnov said.
According to Urnov, the court system is trying to play it safe because of a possible power struggle in high places. Or, perhaps, the Kremlin has opted for more subtle tactics.


Moon must be studied but no need to send cosmonauts there

There are growing calls in Russia to place more emphasis on researching the Moon. But industrial development of the Moon is a waste of time and money.
From the design, scientific and economic perspectives, Mars is a more justified target for Russia.
Starting in the 1970s, the Soviet Union focused its efforts on long-term manned space stations.
The first station, Salyut-1, was put into orbit in 1971 and the seventh station, Mir, had been working in outer space for 15 years before it was taken out of orbit in 2001.
According to Leonid Gorshkov, senior research fellow with the Energiya Rocket and Space Corporation, the design and the main systems of Russian orbital stations reached such a high level that they could serve as a foundation to create a spaceship for a manned flight to Mars.
The scenario includes a virtual crew landing - remotely controlled robots will land on the planet. The cosmonauts' safety on the journey to Mars and back, including the flight in Mars' orbit, will be practically the same as on the stations orbiting the Earth.
No other country is close to implementing such a project. According to experts from Energiya, the project, estimated at $14 billion, may be implemented within 12 years.
A flight to the Moon following the Apollo scenario could be more expensive, given the fact that Russia has practically no experience in designing equipment for landing on the Moon. Developing such equipment would require a significant experimental foundation.
Mars is more attractive for scientists than the Moon. According to Lev Zelyony, director of the Space Research Institute of the Russian Academy of Sciences, the presence of an atmosphere and proven presence of water make this celestial body very interesting for research into the origin and evolution of life, both on Earth and in the Universe, and it is also the most suitable planet in the solar system for colonization.
In 2004, President George Bush, for lack of a well-considered plan for a Mars expedition, proclaimed the goal of resuming manned flights to the Moon after 2015 and in 2020 to begin building a manned station.
But is it good for Russia to unquestioningly consider the United States a source of innovative ideas? In some areas, Russia could attempt to be a world leader.
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