MOSCOW, December 7 (RIA Novosti) No place for Putin in Russia's future system / Communist leader unlikely to run for president / Novatek refuses to develop Libyan gas fields / Societe Generale's deal to take over Rosbank at risk / China trying to gain foothold in Russia's truck market / German media co. to publish newspapers in Russian regions
Moskovsky Komsomolets
No place for Putin in Russia's future system
The decline of Vladimir Putin as the dominant politician in Russia will begin next May, a prominent political analyst said.
Nikolai Zlobin, director of the Russia and Eurasia Project at the Washington-based World Security Institute, said Putin will remain the most popular politician if he decides to run for an elected post. However, he is most likely to remain an influential politician only inasmuch as he knows everything about the eight years of his presidential rule.
According to Zlobin, nobody knows more about his two terms than Putin himself. But under new leaders, new facts and information will develop about which Putin will know nothing. His opinion will be respected, but there will be no place for him in the new administrative system, he said.
Putin will never agree to hold a post in which he will be accountable to or depend on anyone, especially if he can be fired from it, the analyst said. But these are the realities of most state positions.
The analyst believes Putin will be unable to become the "national leader," a politician holding no post and having no responsibilities but enjoying unquestionable prestige, because of the current world order. Other countries will not deal with an unofficial leader whose signature under documents and his commitment to fulfill agreements could be questioned.
Zlobin said that deliberations about the "national leader" are helping Putin to solve a specific task: he does not want to become a lame duck until his last day in office.
Nezavisimaya Gazeta
Communist leader unlikely to run for president
Communist Party leader Gennady Zyuganov is likely to miss the presidential campaign in 2008, just as he did in 2004, because of tough opposition from the Kremlin administration and the Other Russia, an umbrella group of anti-Putin parties.
According to sources in Zyuganov's party, Garry Kasparov, a leader of the Other Russia, has proposed the Communist Party to nominate a common candidate, party deputy chairman Ivan Melnikov.
The Communists fear that Zyuganov will agree to the idea because he has been worn out by the parliamentary election campaign and is being pressured by the Kremlin administration. A source in the Kremlin said that Communist Party leaders are summoned to the Kremlin nearly every day for long talks.
Zyuganov and other party leaders do not believe the Kremlin's promise to appoint Communist deputies as chairmen of two parliamentary committees if the party scales down its anti-Kremlin rhetoric. But neither do they need an open conflict with the Kremlin given the current political situation.
Yevgeny Minchenko, director of the International Institute of Political Analysis, said it does not matter who represents the Communists. "The people know Zyuganov, but he also has a high negative rating," he said. "Any Communist candidate [in the presidential race] can win 10%-15% of the vote."
If the Communists reject Kasparov's offer, this may backfire against the party and personally against Zyuganov. "When a party leader does not run in two successive presidential elections, he is no longer a leader," Minchenko said.
Mikhail Vinogradov, head of the Center for Current Politics in Russia, said it was logical that the Kremlin is clearing the political scene ahead of the presidential election.
"Until they outline guidelines for the campaign, we will not know if there will be one or several government-appointed candidates, so we will be unable to make any plans," Vinogradov said.
In his opinion, if the Kremlin decides to minimize the future president's election results, it would suit it to have party leaders join the race.
Kommersant
Novatek refuses to develop Libyan gas fields
Novatek, Russia's largest independent natural gas producer, has refused to participate in the first tender for natural gas exploration and production in Libya.
It is not yet known whether LUKoil will participate in the tender: LUKoil overseas manager Alexander Tsygankov was recently arrested in Tripoli on suspicion of commercial espionage.
Novatek explains its refusal solely by economic reasons.
Russian natural gas monopoly Gazprom is still interested in Libyan assets.
The tender for the sale of licenses for gas exploration and production on 12 Libyan sites with a total area of 72,500 sq km is to be held on December 9. Libya's proven natural gas reserves are estimated at 1.5 trillion cubic meters (Africa's fourth largest after Algeria, Nigeria and Egypt) and its annual gas output is 7 billion cubic meters, of which 83% is consumed within the country and 17% is exported. Reserves at sites put up for sale have not been announced.
Novatek's president Leonid Mikhelson confirmed on November 11 that the company was "considering its participation in the tender." A source familiar with the situation reasserted that Novatek's refusal was not dictated by political reasons, only by the fact that the sites put up for tender required substantial investment.
Valery Nesterov of Troika Dialog approves Novatek's cautious investments abroad and careful spending. He said that its main task was to boost production at the Yurkharovskoe oil and gas condensate deposit on the Taz Bay near Yamburg (in the Yamalo-Nenets Autonomous Area) from 9.6 billion cubic meters in 2006 to 24.6 billion in 2010.
Earlier Mikhelson confirmed that Novatek was not going to sharply increase investment or consider projects requiring major one-off investments. In September Novatek acquired a 50% stake in the exploration concession for the El Arish offshore block on the Egyptian shelf of the Mediterranean. Novatek is planning to implement some projects in the region jointly with French oil major Total.
According to Novatek's president, the company "is examining some projects in Northern Africa and the Middle East" and now its partners are considering the economic viability of such investments.
Vedomosti
Societe Generale's deal to take over Rosbank at risk
Russian arms traders can prevent France's Societe Generale from gaining control over Rosbank. The recently established Russian Technology state corporation needs a bank of its own, and Rosbank is a fitting candidate for that role.
Vladimir Potanin and Mikhail Prokhorov agreed to sell the bank in June 2006 when they called off an IPO. Societe Generale bought 20% minus one share and obtained an option on another 30% plus two shares for $1.7 billion until the end of 2008.
Now Potanin and Prokhorov each control 34.73% of Rosbank through a jointly owned company.
But the deal in this configuration may be off, according to an owner of a Russian bank familiar with Prokhorov. Sergei Chemezov, head of the Russian Technologies, has come out against the deal, he said.
The state corporation needs a bank of its own and Rosbank with its background of serving major clients fits the role perfectly, the source said.
A source in one of the defense industry companies affiliated with Russian Technologies confirmed Technologies' interest in Rosbank as a corporate bank.
"Banks that have catered for Rosoboronexport are being shaken up," said a financier familiar with Chemezov. "Sberbank is now headed by German Gref, who has a difficult relationship with Chemezov. VTB's deputy chairman Igor Zavyalov, who was in charge of Rosoboronexport, has quit. VEB is now a state corporation and over-regulated."
The bank situation is not simple for Rosoboronexport, said a source in the Bank of Development.
"The military have accounts in Rosbank and they fear that SG could gain access to state secrets," said a source among one of Rosbank's co-owners. But the military account only for 6.9% of the bank's loans portfolio.
Several sources have heard of Rosoboronexport's troubles or problems with the SG deal, but doubt that it can be altered or called off.
"With the Federal Anti-Monopoly Service and the Central Bank clearing the purchase of a controlling stake, to refuse the French now would be to cause an international scandal," one of them said. "In a situation where Prokhorov and Potanin need money to finalize their divorce [division of business assets], it is a dangerous thing to do."
Business & Financial Markets
China trying to gain foothold in Russia's truck market
Moscow's AMO ZIL auto plant and the China National Heavy Duty Truck Group Corp. have concluded an agreement to supply to Russia with kits to assemble HOWO trucks. In the future ZIL plans to increase capacity and make 50% of production local. HOWOs could claim 5% of the Russian heavy duty truck market, analysts said.
A source close to the Russian plant said it was planning to begin HOWO assembly in 2008. He said it could assemble between 5,000 and 7,800 vehicles in the first year.
The plant will probably sell at most 5,000 trucks, enabling the Russian-Chinese HOWO-ZIL joint venture to corner 5% of the heavy duty truck market, said Kirill Tachennikov, an analyst with Otkrytie brokerage.
But a lack of well-developed services and spare part problems would limit sales.
Mikhail Ganelin, a Troika Dialog analyst, said heavy duty trucks were now in high demand, but that the plant's success would directly depend on prices. The quality of Chinese trucks is lower than that of Russian models, and growth in sales is unlikely, the analyst said.
Initial investment in the joint venture will not exceed $20-25 million, analysts said. But ZIL expects to obtain industrial assembly status for the project, making additional investments necessary.
The new status will enable the company to import components from China with minimum custom duties. Instead ZIL pledged to increase local output to 50% within the next 54 months, the source said.
Analysts doubt that the government will give favored treatment to the Chinese project. Up till now all requests by Chinese automakers have been turned down by it, Tachennnikov said.
The government announced in November it was stopping the signing of assembly agreements and, according to Ganelin, was unlikely to make an exception for ZIL.
Gazeta
German media co. to publish newspapers in Russian regions
WAZ Mediengruppe, Germany's second largest publishing house, which publishes 38 dailies around the world with a total circulation of more than 2.5 million, is coming to Russia. Experts do not believe the project will succeed.
WAZ recently bought into the Sloboda weekly published in Tula, central Russia, and plans to turn it into a core for a newspaper network in other Russian cities.
Talks on the acquisition of Sloboda lasted nearly 12 months. The WAZ management has refused to say how much they paid for the stake in the Tula-based newspaper, but it is rumored that Vera Kiryunina, director general of the newspaper, sold it for $5 million. The weekly is valued at $12-$13 million.
Kiryunina has also convinced the Germans to invest in the weekly's expansion. In the next few years, they plan to start publishing the newspaper in three to five Russian cities with populations of between 400,000 and 500,000, which rules out Moscow and St. Petersburg. WAZ intends to publish the newspaper in 32 Russian regions within a few years.
Andreas Rudas, head of WAZ Eastern Europe, said the project would initially be unprofitable, but that the holding would invest as much as is necessary to make a quality product.
Vladimir Sungorkin, director general of the Komsomolskaya Pravda Publishers, said he did not believe in the project's success.
"It will fail," he said. "Expenses will be much higher than possible returns. Germans have a romantic view of the Russian newspaper market, while in fact the Russian readership is small and divided among existing publications. The audience can be encouraged to change its views, but this requires major outlays."
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