MOSCOW, September 25 (RIA Novosti) Putin halts business leaders from parliament/ Zubkov is not Putin's successor/ Shell to team up with Tatneft to produce heavy oil in Russia/ Russian steel king buys 30.4% stake in Silovye Mashiny/ Authorities to monitor incomes of the rich and famous
Gazeta.ru
Putin halts business leaders from parliament
President Vladimir Putin said off the record during an international economic forum held in Sochi, the Russian Black Sea resort, last weekend, that business leaders were not welcome in the new lower house of Russia's parliament, the State Duma.
In his opinion, the representative body should be as close to the people as possible. Judging by the results of the power struggle for leading positions on the parties' election lists, the largest parties are honoring that principle.
Putin said that only business leaders not included on the Forbes list of the top 50 richest people in Russia could run for parliament. In other words, those whose personal wealth is estimated at more than $1.3 billion should be banned from the State Duma.
"The president insists that the new Duma should be a truly people's assembly," said a source at Gazeta.ru.
Political analyst Dmitry Badovsky said: "This provision is logical from the viewpoint of public opinion, as polls show that the people are annoyed by social injustice."
Quite a few deputies in the previous Duma will not be offered places for re-election.
Many business leaders want a seat in the Duma in order to get parliamentary immunity and use their status as deputies to promote their business interests.
Twenty businessmen from the group of Russia's 500 richest persons, with a personal income of 4 billion rubles (almost $160 million) to 322 billion rubles ($12.86 billion) have seats in the current Duma. All of them are members of the pro-Kremlin party United Russia.
Three deputies of the lower house have a personal income of more than $1.3 billion. They are Suleiman Kerimov ($12.8 billion) and Andrei Skoch ($1.7 billion), both members of United Russia, as well as Alexander Lebedev ($3.6 billion), whom A Just Russia has refused to put on its election list this time.
One exception could be Viktor Rashnikov, the owner of the Magnitogorsk Iron and Steel Works (MMK), who is ranked 11th on the Forbes list, with a personal income of $9.1 billion. United Russia said it might put him on its list to represent the Chelyabinsk Region (Urals) where MMK is located.
The list of the Communist Party includes only two very rich people, Sergei Muravlenko, a former top manager of bankrupt oil company Yukos, and the party's financier, Viktor Vidmanov, but their personal incomes are below the ceiling set by Putin.
Vedomosti
Zubkov is not Putin's successor
The appointment of Viktor Zubkov as prime minister and the lengthy and quiet formation of the new cabinet show that Operation Successor is over, an expert writes in popular business daily Vedomosti.
This does not mean that the new prime minister, whose rating as a potential presidential candidate went up 4% in a week, will become Russia's next president, writes Dmitry Badovsky of the Research Institute of Social Systems.
According to him, this means that the structure and composition of the government will be changed over several stages, including after the December parliamentary elections. Zubkov, who is an old comrade of President Vladimir Putin, will most likely keep the top government post until the end of the reforms.
Badovsky concludes that Zubkov will not become the third president of Russia.
In his opinion, the successor will not hold all the reins of presidential power. He will not have Putin's personal influence on his team, or his monopoly position in the country's elite.
The possibility that Russia could have such a president died when Zubkov, who was an obscure official before his appointment to the government, said he might run for the presidency.
Badovsky writes that the point at issue is not the ease with which Zubkov replied to the tricky question, when other candidates seemed embarrassed and searched for a roundabout answer. Simply, there is a huge difference between a presidential candidate and a potential successor.
Zubkov apparently does not claim the latter role, and has broadly hinted that nobody should regard him as such.
In fact, Putin inferred this when he said that there are five or six persons, including Zubkov, who could be elected president, Badovsky writes. There cannot be that many successors, because this runs contrary to the sacral procedure of succession, which entails the transfer of power in its entirety from the incumbent leader to the next one.
Kommersant
Shell to team up with Tatneft to produce heavy oil in Russia
Anglo-Dutch concern Royal Dutch Shell is starting its third oil extraction project in Russia. On Thursday, it plans to sign a joint venture deal with Tatneft, Russia's sixth largest crude producer located in the Republic of Tatarstan, to develop bitumen oil reserves there.
With the joint venture deal in mind, the Russian company has managed to exempt those fields from mineral extraction tax (MET).
A number of Tatneft sources have confirmed that the document will be signed on September 27, and the company's board will meet on the same day to approve the deal. Tatneft and its new partner will look at production technologies available and decide on the feasibility of building a refinery there before November 1. The companies have not disclosed their stakes in the projected joint venture yet.
Prospectors have revealed 450 natural bitumen fields in Tatarstan, 150 of them in the Tatneft license area, and 12 ready for commercial development. The local solid bitumen resources are estimated at 1.5 billion to 7 billion metric tons.
Rosnedra, Russia's Federal Mineral Resources Agency, categorized the bitumen reserves as high-viscosity oil earlier this year, and the MET rate will be readjusted after the release of the 2006 State Balance of Mineral Reserves due in September. The privileged regime will then apply to Tatarstan's fields as well.
Valery Nesterov, an analyst with the Troika Dialog brokerage, said global bitumen resources were five times greater than oil reserves.
"They are quite attractive in Russia," echoed Konstantin Cherepanov from KIT Finance.
Tatneft needs a partner with expertise in bitumen oil development because it used to be seen as a "nonconventional energy source" until very recently, Nesterov went on.
On the other hand, foreign companies can hardly expect major stakes in "conventional" oil projects in Russia, but stand a better chance of buying into "difficult" ones, Cherepanov added.
According to Nesterov, the latest technologies for heavy crude extraction have enabled global oil majors to cut production costs from $30 per barrel in 1985 to $15 in 2003.
"Taxes are also an important factor in economic efficiency," the expert said adding that Tatarstan's bitumen oils even have certain advantages. For example, most of the world's bitumen deposits are found at 1-1.5 kilometers below the surface, while in Tatarstan, at a mere 80 to 200 meters.
Business & Financial Markets
Russian steel king buys 30.4% stake in Silovye Mashiny
Alexei Mordashov, owner of steel giant Severstal, has defeated aluminum king Oleg Deripaska, owner of industrial holding Basic Element, and purchased a 30.4% stake in Silovye Mashiny (Power Machines), the largest Russian manufacturer of power industry equipment, at a discount.
Cyprus-based Highstat Ltd., controlled by Mordashov, acquired the 30.4% stake from Interros, the flagship holding company of metals billionaire Vladimir Potanin, for an undisclosed price.
Utility giant Unified Energy Systems (UES), which owns a blocking stake (25% plus one share) in Silovye Mashiny, is to auction it off by late 2007.
An Interros press release said the price was based on current stock market quotes. According to analysts, the stake was bought for $470-$471 million. But its real price is $513 million because Silovye Mashiny capitalization now totals $1.6-$1.7 billion ($0.9 per share).
Deripaska tried to persuade German engineering giant Siemens, which owns 25% plus one share in Silovye Mashiny, to buy the stake from Interros under the right of preemption clause and to resell part of it to Russkiye Mashiny (Russian Machines), a Deripaska-controlled holding.
However, the Federal Anti-Monopoly Service (FAS) did not allow Siemens to take over Silovye Mashiny.
Experts said Mordashov now had better chances of buying the Silovye Mashiny blocking stake from UES. Broker Credit Service analyst Sevastyan Kozitsyn said Siemens was unlikely to sell its shares.
According to experts, the state will decide on the future of the UES stake after assessing corporate development programs, due to be submitted by prospective bidders.
On Monday, Mordashov said he was ready to invest into long-term Silovye Mashiny development.
The Federal Anti-Monopoly Service said it had allowed Highstat Ltd. to buy up to 100% in Silovye Mashiny. Deripaska's offshore holding Stephens Capital Ventures S.A. was also allowed to bid for up to 82% of the company's voting shares.
Nezavisimaya Gazeta, Gazeta
Authorities to monitor incomes of the rich and famous
Billionaires and multimillionaires may find themselves under the microscope of a special tax unit. The Federal Taxation Service (FTS) intends to set up a special inspectorate to check and control the country's wealthy members.
Businessmen are not enthusiastic and consider the establishment of a "special inspectorate for oligarchs" another way of exerting pressure on the rich ahead of a presidential election.
A source in the tax inspectorate said the new unit could scrutinize not only big name businessmen, but also sportsmen and pop stars. "Worldwide there are squads concerned with the bohemian communities. We, too, tried to set up something like that," he said.
Currently, the FTS has 10 inter-regional inspectorates keeping an eye on the largest taxpaying companies. There is no special body to deal with individuals, and these are only on file with local tax inspectorates.
"The big-time companies do business in different districts, and so special inter-regional inspectorates for them make economic sense, but establishment of a special unit for individuals is of no use and makes one suspect the tax men of some ulterior motives," said Sergei Belyakov, deputy head of the Russian Union of Industrialists and Entrepreneurs' tax policy committee.
"Creation of a new inspectorate fits in well with the general trend towards greater financial control in the country, which the new Cabinet head Viktor Zubkov once pursued," said Agvan Mikaelyan, general director of Finexpertiza. He said a new unit was likely to make the oligarchs' behavior more predictable, especially during the election season.
"The experience of such special inspectorates in other countries is no good for Russia, because abroad the tax system is adapted to pinpoint wealthy taxpayers by means of a differentiated scale, while Russia uses a flat scale," said Yelena Gurbatova, a legal expert with Yukov, Khrenov and Partners, a college of advocates. She doubted the success of the new initiative, since, she said, "There are entire legal schemes for income optimization while cash operations are almost impossible to check."
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