MOSCOW, November 8 (RIA Novosti) Russia's CFE moratorium the last warning/ Popularity of the "party of power" drops 6%/ Sweden to press for a share in Nord Stream - experts/ Access to Yamal projects may compensate Shell for Sakhalin losses/ Gazprom to trade its shares on Shanghai stock exchange
Rossiiskaya Gazeta
Russia's CFE moratorium the last warning
The Conventional Forces in Europe (CFE) Treaty has been an issue of contention almost since its signing, as the West and Russia differ on the signatories' compliance with the treaty provisions, a German expert told the popular daily Rossiiskaya Gazeta.
Alexander Rahr, program director for Russian and CIS affairs at the German Council on Foreign Relations, said Europeans think Russia should not worry about NATO troops in the Baltics, Romania and Bulgaria, which have considerably smaller armed forces than Russia.
But in the opinion of Moscow, the West has violated the rules of the game and bilateral agreements with NATO expansion and deployment of its military infrastructure on Russia's doorstep.
The analyst said the Kremlin believes that Russia is being squeezed out of the Black Sea and Caspian regions, and that NATO wants to spread its influence to Georgia and the South Caucasus in order to nullify Moscow's control in these strategic regions. It is against these silent plans that Russia is protesting.
The process was initiated by U.S. President George W. Bush, who boosted the ABM project at the beginning of his term and started establishing a special world order dominated by the United States, in which the interests of Russia and the European Union are disregarded.
Moscow has only recently started responding to the American leader's actions, Rahr said. It has demanded that Western partners respect its interests, including in the sphere of European security.
Moscow says that its CFE moratorium is the last warning to the West, issued to encourage the negotiating partners to seriously consider Russia's strategic interests, according to Rahr.
The German analyst said there are several ways to deal with the CFE problem. One of them provides for a package solution comprising Russia's concessions on Kosovo and Iran and U.S. concessions on the ABM and the CFE.
Russia and the United States will not publicize their agreement, if they come to terms on it, Rahr said. Bargaining, which will be as loud and passionate as an Oriental bazaar, will be made behind the scenes.
The package solution would give Russia the time or the chance to agree with its partners on the main issues. But this would be a most cynical move by the West and Russia.
Another option is to stop negotiations and bury the CFE Treaty, which is ineffective anyway. The partners could forget about the treaty and do what they please. Russia could deploy military bases on the EU border, while NATO would continue its expansion in the Caucasus, Alexander Rahr concludes.
Vedomosti
Popularity of the "party of power" drops 6%
A month ahead of the elections, United Russia's rating has slipped 6%. The factors to blame are an increase in prices and the fact that ordinary people are now accustomed to seeing Putin top the list as the "party of power."
According to the All-Russia Center for the Study of Public Opinion (VTsIOM), between October 13 and November 4, support for United Russia fell from 56% to 50%.
Leontii Byzov from VTsIOM said a survey covers the total number of voters and returns for the "party of power" should be "objectively increased by 13-14% to take account of those who will not vote."
Within the week October 28 to November 4, VTsIOM also registered a decline in President Vladimir Putin's rating (by 2%) and that of the government (by 5%).
Byzov said the fall in United Russia's popularity was due to inflation, with over half of people having to switch to more affordable goods. But this section of the electorate makes up those that actively vote for incumbent authorities.
The Levada polling center will come up with fresh findings next week.
Alexei Grazhdankin, Center expert, said that following the president's heading United Russia's ticket the party's popularity rose - thanks to the "malleable political consciousness" of the voter, while currently because of an inconsistent electorate, the rating could drop.
Political analyst Alexei Makarkin explained United Russia's unsteady rating by the Kremlin's failure to identify President Putin with the party since the effect of Putin's joining United Russia has now worn off.
United Russia is sure it will catch up with the campaign. "The steps we are taking will give us positive momentum," said Andrei Vorobyov, head of the party's central executive committee.
Party chairman Boris Gryzlov has set the target: United Russia must capture no less than 50% of the vote.
Gazeta.ru
Sweden to press for a share in Nord Stream - experts
Following the recent episode with Estonia refusing to allow the Nord Stream pipeline access to its territorial waters, Sweden has started complaining about the project's environmental impact. But experts think the Swedes can be accommodated, for example, through the Norwegians cooperating with Gazprom.
On Tuesday, Gazprom and Dutch Gasunie signed an agreement under which the Dutch company became the third overseas partner of the Russian monopoly and will receive a 9% stake in the authorized capital of Nord Stream AG, the project operator.
The share of each of the other two participants - Germany's E.ON Ruhrgas and Wintershall Holding - will be reduced by 4.5%.
In the opinion of industry experts, the partnership with the Netherlands, Russia's second largest European trading partner after Germany, will enable Gazprom to materially increase its presence in Europe.
Not everyone likes that. Sweden, together with the United Kingdom, is one of the most stalwart opponents of the Russian gas holding's expansion.
Experts agree that the Swedish protests are politically motivated.
"Sweden, together with the United Kingdom and the Baltic states, is a vehicle for the ideas of the European Union, which dislikes Gazprom's presence on the European market," said Mikhail Zanozin, Sobinbank's industry expert. "On the other hand, Sweden does not want to miss out on the project pie."
The Swedish anti-pipeline protests appear to have a simple economic background.
In the view of Dmitry Abzalov, an analyst with the Center for Current Politics, the Swedes hope to bargain lower gas prices in return for allowing the pipeline to be laid in their territorial waters.
Experts believe that unlike Estonia, which protested sharply, Sweden will not be a difficult case.
"The Swedes can be reached through, for example, the Norwegians," Abzalov said.
"Oil and gas company StatoilHydro, which recently became Gazprom's partner in the development of the Shtokman deposit, is a major supplier of energy to Sweden. In addition, the Norwegians have a vested interest in long-term cooperation with the Russian monopoly," he said.
Another option could be direct top-level negotiations. "It was during Vladimir Putin's visit to Finland that differences over the project were resolved with that country," Abzalov said.
"A compromise will be found in any case, because the countries of the 'old' Europe are interested in this pipeline," Zanozin said.
Kommersant
Access to Yamal projects may compensate Shell for Sakhalin losses
Dutch industrialists led by the Royal Dutch/Shell group made an offer to the Russian government to develop oil and gas condensate deposits on the Yamal Peninsula and the shelf of the Kara Sea. Viktor Khristenko, Russia's industry and energy minister, assessed the overall cost of the projects at $162 billion. Experts say that access to the Yamal resources will compensate Shell for its partial loss of the Sakhalin-2 project. It will also allow Gazprom to create a modern infrastructure.
Viktor Khristenko explained that a group of Dutch companies (gas-producing Gasunie, GasTerra, the Essent energy company and the Van Oord engineering company) led by Shell offered unique technology for oil and gas production, processing and pipeline construction. They can also create man-made islands for building production and processing facilities. "Yamal is a promising resource base which will need $162 billion to be developed," the minister said on November 7. In the future, it is planned to produce 250 billion cubic meters of gas a year there.
Experts note that Shell has exclusive experience of operating in the Arctic. In 2007, it became an operator of the largest Norwegian gas field Ormen Lange in the Barents Sea. In addition, aluminum pipes were tested at the drilling rigs, said Maxim Shein of BrokerCreditService. "This experience tangibly reduces production costs," he noted.
Valery Nesterov of the Troika Dialog investment company said that Shell had been promised compensation when pressed on the Sakhalin-2 project (Gazprom bought from Shell a 22.5% stake in Sakhalin Energy, the project operator). He said that, given the need to meet growing contractual obligations for gas supplies and the 80% exhaustion of West Siberian gas reserves, Gazprom will have to agree to the Dutch proposal.
Earlier, Gazprom planned to develop Yamal deposits mostly on its own, at least without Shell. "Gazprom has never negotiated this project with Shell," Gazprom's press service said yesterday. Alexander Ananenkov, Gazprom deputy CEO, also confirmed that the most sophisticated technology would be used in building the Yamal gas pipeline system, making it possible to pump the necessary gas amounts not through 24 pipelines (like on the West Siberian deposits) but through half the number, he said. However, he did not say whether they would use Russian technology or Gazprom would get the know how from its foreign partners.
Vedomosti
Gazprom to trade its shares on Shanghai stock exchange
On Wednesday, Sergei Kupriyanov, spokesman for energy giant Gazprom, said the company was considering listing its shares on the Shanghai stock exchange. He said the relevant November 6 agreement between Chinese Prime Minister Wen Jiabao and President Vladimir Putin had surprised many corporate managers.
Kupriyanov said the company was studying different options, that insufficient supply would persist on the Shanghai stock exchange but declined to elaborate.
An anonymous corporate official said the securities of Gazprom subsidiaries would be offered in Shanghai. Under a July Eurobond issue memorandum, corporate subsidiaries owned 2.4% of the energy giant's shares, including a 1.9% stake controlled by Gazfond, a non-governmental pension fund providing pension services to people employed in the gas industry.
A Gazprom top manager said the company could sell a 1% stake worth at least $3 billion to Chinese investors.
In July 2006, Russia's largest state-owned oil company Rosneft sold a 0.6% stake now worth $600 million to China National Petroleum Company (CNPC) during its IPO.
A source close to Gazprom management said Beijing had made the share-listing proposal, that Chinese companies would buy into the energy giant, and that Gazprom would sign a contract on selling gas to China.
However, Gazprom and government spokespersons declined to comment on this.
In March 2006, President Putin said Russia would start exporting gas to China in 2011, and that annual sales would reach 80 billion cubic meters.
No bilateral contracts have been signed to date. A government official said the relevant political decision meant nothing, and that no agreements would be reached. He said both sides had to agree on gas prices, the main pre-condition for building a pipeline into China.
A Gazprom manager said the company had started eyeing Asian stock exchanges several years ago and planned to list its shares in Singapore but that it accomplished nothing because of numerous local restrictions.
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