MOSCOW, December 13 (RIA Novosti) Moscow's key partner in Africa creates more problems/ Putin in no hurry to become prime minister/ Polish meat will not solve all Russia-EU problems/ Gazprom to include Serbia in South Stream gas pipeline system/ Alrosa bows before European Commission/VTB to pay out 40% of net profit to shareholders
Kommersant
Moscow's key partner in Africa creates more problems
Algeria has joined the global fight for diversification of energy supplies, a Russian expert writes in the business daily Kommersant.
According to Andrei Maslov, director of Rosafroexpertiza, a Russian expert group on Africa, his view stems from news on the expiry of a memorandum of understanding, which Algeria's Sonatrach state oil and gas corporation and Russia's gas monopoly Gazprom signed in August 2006.
Algeria earlier leaked that it was not satisfied with the quality of Russian military equipment. Surprisingly, the criticism came not from direct clients in the Algerian armed forces, but the civilian team of President Abdelaziz Bouteflika.
The Russian expert sees a connection between the two incidents, especially if you take into account the high price of the question of Russian-Algerian strategic partnership. He writes that the two countries could jointly control up to 40% of gas supplies to the European Union. But Europe has opted for Algeria and Libya in an attempt to neutralize the growing influence of Gazprom.
Europe's vigorous efforts to diversify supply routes have made Gazprom's presence in the two countries unacceptable to end gas consumers. The United States is also concerned.
Russia's problems became worse when external pressure was put on Algeria at a time of extreme infighting between influential clans and groups there. The reason for the struggle was energy.
Maslov writes that the end of hostilities in Algeria and growing oil and gas export revenues led to a lightning transfer of political influence from the army elite to the energy lobby.
President Bouteflika, who had maintained a neutral stance for several years, took the side of the energy lobby - and received a pat on the back from his Western patrons, primarily the United States.
The redivision of power affected Algeria's relationship with Russia, especially their military-technical cooperation. The Algerian army and law-enforcement and security bodies were pushed away from the economy, and also from domestic and foreign policy.
Until recently, Russia's policy in Algeria was based on confidential relations with the most influential military and security groups, who have now been pushed aside. Therefore, the Kremlin cannot hope for any good news from the Algerian front soon, Maslov concludes.
Moskovsky Komsomolets
Putin in no hurry to become prime minister
On Tuesday, presidential candidate and Russia's First Deputy Prime Minister Dmitry Medvedev proposed during his televised address that President Vladimir Putin be appointed prime minister after the March 2008 presidential election. But Putin, a master politician, who never shows his cards, is in no hurry to accept Medvedev's offer.
The speech by Putin's successor is part of a well-coordinated plan because even the intricate Russian electoral machine cannot operate in a vacuum; and a popular national idea is therefore essential.
The lack of a clear reply from Putin shows that he still wants to remain in control.
Medvedev's offer implies that Putin will not become a lame duck president before his term expires, but will retain ample maneuvering room within the next few months.
Vladimir Yuzhakov, head of the administrative reform project at the Center for Strategic Studies, said he saw no reason for Putin's possible refusal, and that the president did not have to hurry to accept the offer before Medvedev's official nomination.
Sergei Markov, director of the Institute for Political Studies, said the decision had already been made, that Putin, a master playwright, would maintain the intrigue till the very end, and that the situation resembled a scheduled wedding when all the guests were still wondering whether it would take place or not.
Dmitry Badovsky, deputy director of the Social Systems Institute, said Medvedev's initiative planned to attract Putin's electorate, and that the president would only give his consent prior to the elections.
Vedomosti
Polish meat will not solve all Russia-EU problems
The smoldering scandal between Russia and Poland is drawing to a close: Russia has agreed to resume Polish meat imports. The political climate is improving. However, Polish meat will not automatically solve the outstanding issues between Russia and the European Union.
The restrictions were introduced in 2005, when Russian veterinary experts suspected Polish meat of being, first, of low quality and, second, re-exported from third countries.
A year later, the problem became all-European: ahead of a Russia-EU summit in Helsinki, Poland clamped a veto on negotiations over a new agreement between the EU and Russia, citing the meat conflict and Russia's refusal to ratify the Energy Charter Treaty.
It is hard to say if Polish meat has suddenly improved and is of a higher quality. But one thing is certain: in November Poland got a new cabinet and the new Prime Minister Donald Tusk stated his desire to normalize relations with Russia.
The next Russia-EU summit, to be held in June 2008 in Khanty Mansiisk, is expected to be more productive. It is likely the sides will announce, after all, the opening of talks on a new agreement (the old one expired on December 1 and was automatically extended).
It is another matter that the process will be long and difficult. Polish meat was not the real reason for the halt - the conflict merely provided a convenient pretext.
The old relationship pattern between Russia and the EU ran out of steam, but a new one is clear to neither side.
There are also other issues important for both countries that will be more difficult to solve than the meat issue. Russia is concerned about the deployment of an American missile defense shield on Polish territory. No matter how well Moscow-Warsaw relations are, the missile issue is between Russia and America.
Poland will not be able to refuse Washington apart from some compensation for the deployment of missiles.
Poland's energy complaints concern above all the Nord Stream project. Warsaw believes that Gazprom's decision to bypass its territory and not to build a second string of the Yamal-Europe gas pipeline was politically motivated.
However, Poland's criticisms are here directed not only against Russia, but also Germany as Moscow's main project partner.
Gazeta, Vremya Novostei
Gazprom to include Serbia in South Stream gas pipeline system
The Serbian government and Russian gas giant Gazprom are drafting an agreement to include Serbia in the South Stream gas pipeline system and provide for Gazprom's purchase of a controlling stake in the Serbian oil monopoly Naftna Industrija Srbije (NIS), as well as the building of a gas storage infrastructure in that country.
According to tentative estimates, total costs for these projects for Gazprom could reach $3.5-$4 billion. The process is being hindered by political issues, primarily the dispute around the status of Kosovo.
Initially, the government planned to sell only a 25% stake in NIS for about $300 million and oblige the buyer to invest at least $250 million into its development. An auction was announced in October 2006 the results of which should have been made public in the first half of this year, but the list of candidates for the purchase of the Serbian company is still unknown.
In March, Gazprom's oil producing arm Gazprom Neft announced its interest in privatizing NIS. Now Serbia is considering the sale of a 51% stake in its company. It is not yet known whether a new tender will be announced or not.
Earlier experts thought that NIS plants could be bought by Gazprom Neft and Russia's largest independent oil producer LUKoil through a recently established joint venture. Today analysts think the Russian gas monopoly has more chance.
According to Alexander Shtok, director of the Due Diligence department at 2K Audit-Business Consultating, Gazprom, which had not been active enough during the sale of Russian oil assets of the Yukos oil company, is now ready to invest funds into the expansion of its foreign oil assets.
Gazprom is not worried about the need to make considerable investments in NIS's development. "The sale of NIS to Gazprom is being considered together with Serbia's participation in the South Stream project, which means that more investments will go to that country. The project provides for the development of Serbia's gas transportation system and the building of underground gas storage facilities in Serbia. Therefore, the economic constituent of the sale of NIS to Gazprom is rather substantial," the expert said.
Political motivations should not be ignored either, Shtok said. "Moscow is actively supporting Belgrade on the Kosovo issue, so Russian companies can rely on Belgrade's support in return."
Although Russia sides with Serbia in its dispute with western countries around Kosovo, it obviously does not want to tie the development of its oil and gas business with the results of the international deal on the predominantly-Albanian province of Kosovo.
Gazeta.ru
Alrosa bows before European Commission
To tap African markets, the world's second largest diamond miner, Alrosa, is setting up a new holding to be based in St. Petersburg. At the same time the Russian diamond state monopoly is going to close its representative offices in Belgium and Israel, major markets for unfinished stones, leaving only its outlets there.
Alrosa, which accounts for 25% of world diamond output and 97% in Russia, has two projects running in Africa. The company owns 32.8% of the Catoca diamond fields in Angola as part of a joint venture with local diamond mining company Endiama, Israeli Daumonty Financing and Brazilian Odebrecht and, also, is developing diamond pipes there as part of the Luo project, in which it has a 45% stake.
The diamond producer has more than once spoken of its desire to expand its presence in Africa - it has repeatedly expressed interest in South Africa and Namibia, alongside with Angola.
The aims of the new subsidiary, which will manage the group's African assets, are: to coordinate management of Alrosa's assets in Angola, to cooperate with diamond producing companies in other African countries, to launch and implement new investment projects, and to join companies selling African diamonds.
The reason for all these new activities is that the company is under strong pressure. Ever since the European Commission demanded that Alrosa cut its trade with the South African gold mining giant, De Beers, it has been giving thought to changing its sales policy, saying the company plans to sell up to 80% of the rough gems through its Moscow trading floor.
To do so, the company had to develop its own selling strategy and its own marketing network.
Now Alrosa is selling its diamonds in Moscow and Yakutsk. Lately it has also opened trading offices in Antwerp and Ramat Gan (based on its representative offices in Belgium and Israel), Hong Kong, Geneva (Switzerland), Dubai (United Arab Emirates) and New York (U.S.).
In the United Kingdom, the company still maintains a representative office.
Business & Financial Markets
VTB to pay out 40% of net profit to shareholders
The management of state-controlled bank VTB has announced that its 2007 dividends to shareholders will be comparable to those of major European banks.
Experts interpret this as the bank's attempt to encourage shareholders and enhance its attractiveness to potential investors.
Andrei Kostin, head of the bank, said: "Previously we used net profit to increase the bank's capitalization. But I believe it would now be logical to increase dividend payments on shares to a level accepted by European banks."
The market welcomed the news, although experts said Kostin's statement was too ambitious and untimely.
Olga Belenkaya, deputy chief analyst with Sovlink, an independent investment firm, said: "Dividend payments in European banks usually make up 35%-40% of their net profits. So far, not a single Russian issuer has been so extravagant."
Deutsche Bank's dividends last year amounted to 35% of its net profit. Sberbank spends about 10% of its profits on dividends.
Andrei Klapko, an analyst with the Trust investment bank, said: "Dividend payments increase when a bank's active growth phase is past and it no longer needs to spend much money on development. VTB's active growth phase is not yet over."
Belenkaya said that VTB's current development strategy differs from that of mature European banks.
"VTB is aggressively expansive and growing at a high pace necessary for its forays on the market," she said. "Therefore we did not expect it to pay large dividends in the next two or three years."
Experts have calculated that if the bank's supervisory board recommends the shareholder meeting to approve Kostin's plan in spring 2008, minimum dividends will amount to some 20% of the bank's 2007 net profit calculated to Russian Accounting Standards. This is about 5 billion rubles ($204.58 million), or more than double the bank's previous payments to shareholders.
Market players are surprised at the bank's generosity, but they have explanations for it.
"VTB wants to enhance the attractiveness of its shares and encourage shareholders, who have not received substantial payments since the bank's IPO" in May 2007, Klapko said.
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