What the Russian papers say


MOSCOW, November 13 (RIA Novosti) Russian-Indian partnership develops a crack/ Voter interest in elections down - survey/ Yukos case remains open despite court ruling/ TNK-BP holding receives access to Kurdistan's oil fields/Russian auto maker buys British tractor plant


Russian-Indian partnership develops a crack

The indefinite postponement of an agreement on the construction by Russians of new nuclear power plants in India has been only the tip of an iceberg that is hiding growing disagreements between the long-time strategic partners. India's turnaround towards the United States threatens its dropping out of the orbit of Russian policy in Asia.
For several decades (as long as the Soviet Union was opposed to China and the U.S. and as long as Pakistan, India's worst enemy, was the main springboard for the imperialist West in the region) Moscow was, economically, practically New Delhi's only arms supplier, and politically all but its sole strategic ally.
However, in the past 15 years or so their relations have moved away from the state they were in during the 1970s and 1980s. The boil appeared a long time ago and was bound to burst sooner or later.
Today, India is a power strongly claiming leadership not only of its own region, but far beyond its boundaries.
Also changed is the qualitative aspect of bilateral economic relations. India still buys weapons from Russia, and this spending dominates its foreign trade balance. But India's approach to the matter altered long ago. It actually purchases only hardware from Moscow, choosing to look elsewhere for hi-tech wares.
Even over hardware the two sides bargain bitterly. For example, India has long been driving the price down for the aircraft carrier Admiral Gorshkov and in effect bought it at the price of scrap metal. But the fate of the deal is still up in the air.
It does not matter what the root reason is: the quality of Russian arms, the price-quality relationship that does not suit India, or a desire to diversify deliveries.
Nevertheless, on the global political stage, Russia traditionally expects India to give its initiatives full support. This, however, does not happen too often and causes resentment in the Kremlin and the Russian Foreign Ministry.
Russia has for many years been refusing to make arms deliveries to Pakistan for fear of offending India. India in the meantime has been strengthening its strategic ties with the United States, which has in the past armed its main enemy and is not in a hurry to break its strategic union with it.
Having failed to find new allies in such a key area as South Asia, Russia risks losing an old one.


Voter interest in elections down - survey

Sociologists have reported a decrease in voter interest compared with the 2003 parliamentary campaign.
Experts attribute growing social apathy to the predictable outcome of the upcoming parliamentary elections, largely seen as already decided after President Vladimir Putin's announcement that he would head the pro-Kremlin United Russia's candidate list.
According to a survey by the Levada public opinion center, 15% "closely followed" the election campaign in October 2003, while only 13% are doing so now. Around 34% of the respondents said last month they were not following the process at all, while only 32% said so in 2003.
A recent polling conducted by the FOM public opinion foundation revealed an even greater number of citizens indifferent to the fight for parliament seats - 39%.
"Voter interest in the election campaign is dwindling, though not dramatically," said Alexei Grazhdankin, deputy director of the Levada Center.
Politicians and government officials have also noticed the growing apathy.
"I am really alarmed by the fact that current TV debates are not attracting much interest," the chairman of the Central Election Commission, Vladimir Churov, told a news conference on Monday.
He said he was disappointed by the low ratings of the free air time allotted to the political parties for their advertisements. On the other hand, the news on the leading channels is dominated by United Russia, according to a research by the Center for Journalism in Extreme Situations, [a Russian NGO promoting freedom of expression.]
"We have not registered any growth in public interest in elections, even though results fluctuate across various demographic groups," said Boris Makarenko, deputy director of the Center for Political Technologies, a Moscow think tank.
He does not think it has anything to do with the TV debates, "which have always been boring in Russia." He also said the drop in people's interest in all major social groups was due to the president's decision to head United Russia's candidate list.


Yukos case remains open despite court ruling

On Monday, the Moscow Arbitration Court ended the liquidation process of Yukos, once Russia's largest oil company, following a request from the court-appointed receiver, Eduard Rebgun.
Overall, Yukos has paid off more than 710 billion rubles (about $28.4 billion) to its creditors out of proceeds from liquidation auctions, and defaulted on claims worth 76 billion rubles (about $3 billion).
Yukos was declared bankrupt on August 1, 2006, after three years of litigation with tax authorities over arrears. Its founder, Mikhail Khodorkovsky, is serving an eight-year prison sentence in Siberia for fraud and tax evasion.
On May 11, 2007, a mystery bidder called Prana offered $3.9 billion to beat Russian state-controlled oil company Rosneft in a fiercely fought auction for Yukos assets, including its head office.
The lot also included Yukos' other Moscow properties, unpaid Value Added Tax and Trading House Yukos-M trading unit, rumored to have access to oil inventories or cash.
The final bidding price exceeded the starting price of 22.1 billion rubles ($902.41 million) four times over.
Prana, reportedly controlled by billionaire Roman Abramovich, the owner of private investment company Millhouse Capital, subsequently resold the lot to Rosneft.
Analysts said this enabled Abramovich to compensate for the abortive merger between Sibneft, a private company formerly owned by him, and Yukos, but that the mechanism of such compensation remained unclear.
Dmitry Abzalov, an expert with the Center for Current Politics, said Abramovich had soured his relations with Yukos after selling Sibneft to a subsidiary of energy giant Gazprom, and that he also used the money for repaying his debts.
In mid-August 2007, Yukos Finance B. V., a company registered in the Netherlands which owns Yukos foreign assets, was bought for Rosneft by its affiliate, Promneftestroi Ltd. It later transpired that Promneftestroi itself was recently repurchased from Rosneft by the mysterious Monte-Valle Company, founded by an unnamed U.S. citizen, for taking part in the auction on Yukos assets.
Yukos Finance B. V.'s management said the deal was unlawful, that the company had not been bankrupted, and that the auction's organizers should have notified bidders of bankruptcy proceedings, and took its case to court.
Although the Amsterdam district court declared the sale null and void in early November, Moscow does not seem concerned and has not yet contested the verdict. However, Russian lawyers said the bankrupt company's receiver should appeal it.
Analysts said the Yukos case was far from being closed, and that Russia would now have to prove its right to own the company's assets in the West.


TNK-BP holding receives access to Kurdistan's oil fields

For the first time since the fall of Saddam Hussein's regime in Iraq, a company with Russian capital has received access to the country's oil and gas resources. The Kurdistan authorities reported the signing of a production sharing agreement (PSA) with Norbest Limited "affiliated with TNK-BP," a Russian-British oil venture. Experts think this project has good prospects that will justify its high risks.
Norbest has received the largest of the distributed license areas, with one of its blocks being adjacent to the largest Kirkuk field where production risks are assessed as medium and low. Four other blocks went to the Korea National Oil Corporation (KNOC), Britain's Sterling Energy and US companies Aspect Energy and Hillwood International Energy. According to a Kurdistan government's report, 20 blocks in the northern province have yet to be distributed.
Sources familiar with the situation say that the project was a private initiative of TNK-BP's shareholders. A source close to TNK-BP's owners explained that a structure of the Alfa Group shareholders (which owns a 25% stake in TNK-BP) intends to operate in Kurdistan. According to a source, Norbest has been established to work on the deposits and to participate in tenders and it does not have any links to BP among its owners. The source said this scheme was necessary to minimize political risks.
A TNK-BP source said that the cost of Kurdistan's assets had been underestimated, so "it is expected to rise several times." He believes the risks are not high, because US, South Korean and British companies participating in Kurdistan projects were supported by the political circles of those countries and the situation is not regarded as a conflict between the Kurdistan and the Iraqi governments.
"There is no point in waiting for completion of the situation with LUKoil's return or refusal to return to Iraq, when one can work and must work there now," said a source close to TNK-BP.
Experts are of the same opinion. "Despite the existing risks, including political ones, the project could turn out to be most promising because two-thirds of Iraq's oil reserves are concentrated in Kurdistan and western Iraq," said Denis Borisov, an analyst with the investment and financial company Solid. "It is likely that the difference between the price paid and expected revenues from the project suit the investor and balance the risks."
"Oil remains a very attractive business today," says Konstantin Cherepanov, an analyst with the KIT Finance investment company. "It is enough to look at the rise in oil prices to understand this." If the company has joined the project under a PSA, this could mean that this is not a speculative investment for it, Cherepanov added.


Russian auto maker buys British tractor plant

KamAZ, Russia's largest truck manufacturer, has purchased a plant in Britain that produces McCormick farm machinery, which brings it closer to implementing its business plan to produce tractors.
This is an engineering sector that will get serious backing from the Russian government in the future, specialists say. KamAZ is planning to corner 10% to 20% of the Russian tractor market.
As it prepared to diversify, KamAZ held negotiations with six European companies.
"The British tractor brand showed the best price-quality relationship," KamAZ general director Sergei Kogogin said earlier. "Besides, the McCormick business is closing in Britain. KamAZ could transfer equipment, tools and fixtures here and in a short time start assembling tractors in Naberezhnye Chelny and concentrate the production of components in a few centers."
The engines will be manufactured by KamAZ itself in 2008. Under its business plan, 2,500 units will be turned out next year and 4,000 in 2009.
According to Kogogin, the auto manufacturer is not going to jockey for tractor market leadership, "although KamAZ will have 10% to 20% of the market."
KamAZ will not become a major tractor supplier, said Georgy Ivanin, head of analysis at AntantaPioglobal Investment Group. It has to focus on motor vehicles and their quality, especially in view of the introduction of new European environmental standards.
KamAZ's strategy for entering the agricultural tractor market is based not only on economic calculations, but also, clearly, on a political goal set by the auto maker.
"The Russian market for farm machinery is mainly filled by foreign models - from the Netherlands and Belarus," said Sevastyan Kozitsyn, an analyst with BrokerCreditService brokerage.
"The authorities are seeking to promote Russian-made machines on the market, although from a business point of view KamAZ would have done better to take up road building equipment, the demand for which is rising by 28% to 32% a year thanks to the development of construction and infrastructure projects."
KamAZ bases its estimates on the fact that in the near future the state will be actively developing and subsiding the sector, said Alfa-Bank analyst Andrei Fyodorov. Benefits could be shared equally between producers and users of Russian farm equipment.

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