MOSCOW, February 4 (RIA Novosti) Ukraine shelters political emigre from Russia / Moscow wins easier terms from U.S. for Russian uranium suppliers / Gazprom abandons plans for underground gas storage facility in Belgium / AvtoVAZ, Magna may fail to set up joint venture / SOK Group may sell its assembly plant to AvtoVAZ / Gazprom needs chairman unable to show political will
Ukraine shelters political emigre from Russia
Russian journalist Alexander Kosvintsev, who claimed he was persecuted by the Russian government for his sensational exposes about the activities of Kemerovo Governor Aman Tuleyev, has been provided with political refugee status in Ukraine.
It was the first case of the Ukrainian government granting political asylum to a foreigner. Analysts call this decision a political move and expect it to whip up tensions between the two countries.
After a year of consideration, the Ukrainian immigration service ruled that it was dangerous for the Kemerovo journalist to go back to Russia, and granted him refugee status.
"I currently enjoy the same rights as Ukrainian citizens, except the right to vote, because I am still a Russian citizen," Kosvintsev said. He currently resides in Kiev and works as editor-in-chief at the local Vecherniye Vesti daily.
Former Ukrainian Foreign Minister Gennady Udovenko told Kommersant it was the first case in which Ukraine has granted asylum to a foreign citizen. He said a group of Belarusian dissidents had earlier applied for asylum but their request was rejected due to Ukraine's strained relations with Belarus. A group of Uzbek criminals who also applied were granted refuge at first, but the decision was revoked by the Ukrainian security service, Udovenko said.
Oleg Panfilov, head of the Center for Journalism in Extreme Situations, a Russian organization upholding the right to free speech, said it was not the first case of journalists fleeing Russia because of persecution relating to their professional activities. "More than 15 journalists are known to have requested political asylum, but the majority of them just flee without much publicity when faced with censorship and pressure," he added.
Konstantin Zatulin, director of the CIS Institute, a Moscow think tank, described the Ukrainian government's decision as bad news for Russian-Ukrainian relations.
"The fact that a Russian citizen, especially a reporter, was granted political asylum in Ukraine, has created a precedent. It was certainly a political decision by the Ukrainian government, which could entail undesirable consequences for bilateral relations."
"Our country is pursuing a democratic foreign policy, regardless of Russia's response to its actions," said Alexander Chernovolenko, a member of the Our Ukraine - People's Self-Defense party in the ruling parliamentary coalition. "Russians must know they can count on the protection of their Slavic brothers. We must follow England's example."
Moscow wins easier terms from U.S. for Russian uranium suppliers
Russia and the United States on Friday signed amendments to an agreement suspending the anti-dumping investigation into uranium deliveries from Russia to the U.S. (SPAR). The value of the move, according to the Russian side, is $5-6 billion over a 10-year period. Experts predict that by 2014 one in five American nuclear power plants will be running on Russian uranium.
The adoption of the amendments will allow Russian and American companies directly, without intermediaries, to conclude contracts for the delivery to the U.S. low-enriched uranium from Russia at market prices, albeit only from 2011.
Experts predict that with the agreement expiring in 2013 direct supplies of enriched uranium may take as much as 20% of the American market.
Washington is interested in expanding cooperation with Moscow in civil nuclear power. According to the U.S. Nuclear Energy Institute, the American market will have a uranium shortage in 2011-15. Under the new agreement with Russia, which provides for incremental liberalization of the U.S. market for Russian companies supplying uranium, nuclear fuel imports will start gradually increasing from 2011. In 2014, supplies should rise ten-fold compared with 2013.
A high-ranking source in Russia's Federal Nuclear Power Agency (Rosatom) said yesterday: "This agreement benefits us. We are interested in gaining free access to the American market to utilize capacities of our four uranium-enrichment plants."
At the moment Russia has 40% of the world's uranium enrichment capacity, which is not fully utilized. According to the source, Russia's nuclear cooperation with the U.S. will entail not so much the uranium mined and enriched in Russia, as services for enriching nuclear fuel for American plants.
The Americans insist that with the expiry in 2014 of the HEU-LEU agreement (conversion of high-enriched uranium into low-enriched uranium) signed on October 1992, at least part of the uranium exported from Russia should be from nuclear warheads.
Overseas partners, the source said, want to portray the new format agreement as a prolongation of the old one adopted 15 years ago under Russia's disarmament program.
"They want to make things look as if Russia needs it, while actually they are no less interested in it," the source said.
Gazprom abandons plans for underground gas storage facility in Belgium
Eighteen months of investigations and political consultations between Russian gas giant Gazprom, Belgian gas pipeline operator Fluxys and the Belgian authorities on plans to build an underground gas storage facility in Poederlee have brought no results. The project has been rejected as unprofitable.
Sophie Dutordoir, Fluxys' CEO, said on February 1 that investigations had shown that the project was not economically attractive. She said the sides had drafted plans for the constriction of a gas storage facility for 300 million cubic meters of gas (the facility was to reach its design capacity by 2012) but research showed that such a facility could be built only for 120 million cubic meters. Today, all storage facilities in Belgium can cumulatively store 700 million cubic meters of gas which could be used for consumers' needs.
Last summer the joint plans of Gazprom and Fluxys met with resistance from CREG, a Belgian energy regulator, which recommended that the Belgian government should deny Gazprom the right to reserve 75% of the projected gas storage facility for itself for the next 25 years. Faced with a protracted political crisis, the Belgian government has never declared its support for the project.
This is the second blow to Gazprom's plans, as it is interested in developing its own underground gas storage facilities in western Europe. In early 2007, British authorities did nor allow Wingas, a joint venture of Wintershall Holding AG, Germany's largest crude oil and natural gas producer, and Russia's Gazprom, to launch an underground gas storage project in the Saltfleetby gas field (the company's application was rejected and the partners had to start the coordination of the project from scratch).
Should the above two projects be implemented, they would have consolidated Gazprom's market positions in western Europe prior to the commissioning of the second line of the Nord Stream pipeline (due in 2013) oriented to the markets of the Netherlands, Belgium, western France and Britain.
Gazprom has refused to comment on the situation.
AvtoVAZ, Magna may fail to set up joint venture
Political support has not helped Russia's largest car producer AvtoVAZ and Canadian automaker Magna to set up a joint venture, as there will not be enough space left at the Togliatti plant on the Volga when France's Renault starts working there.
In December 2006, AvtoVAZ and Magna signed a framework agreement on creating a new car platform and establishing an assembly plant. In May 2007, they signed a protocol of intent in the presence of Russian President Vladimir Putin.
The new plant, with an annual capacity of 450,000 cars, was to produce a new Class C Lada starting in 2009. The partners agreed to invest $2 billion in the project, and AvtoVAZ even presented a Project C prototype at the Geneva car show.
But plans have changed, and if Renault and AvtoVAZ come to terms on their deal, Project C can be ditched, according to the newspaper's sources in the Russian carmaker. By late February, when due diligence of AvtoVAZ is completed, it may sign an agreement to sell a blocking stake to Renault.
The French company has offered AvtoVAZ a choice of several platforms, including Logan and Megane, as well as several new ones and those still at the design stage.
AvtoVAZ will not lose much if it stops cooperation with Magna, as the Canadian company has so far only given the Russian carmaker consultations on completing the Project C platform. Sources at AvtoVAZ said the company had spent about $8 million on the project.
Kirill Chuiko, an analyst at the Moscow-based UralSib financial corporation, said AvtoVAZ would not need its Project C if Renault gives it a platform C, because making a car on a ready platform is cheaper and less risky.
The divorce with AvtoVAZ would not stop Magna's business in Russia.
Russian Machines, a wholly owned subsidiary of Basic Element, the holding company of billionaire Oleg Deripaska, who has a majority interest in RusAl, became one of the main shareholders of the Canadian automaker last year, paying $1.54 billion for a 17% stake. Magna and Russian Machines have agreed to set up a joint venture producing plastic interior and exterior parts as well as stamping and assembling car body parts.
Volker Barth, one of Magna's top managers in Europe, has become head of RM Systems, a subsidiary of Russian Machines.
Magna is helping the GAZ Group, also incorporated in Russian Machines, to produce Chrysler cars using U.S.-bought equipment.
SOK Group may sell its assembly plant to AvtoVAZ
Russian machine-building holding SOK Group has offered the country's largest carmaker, AvtoVAZ, a more than 90% stake in its Izh Avto plant, which manufactures compact cars for South Korea's KIA. One reason for the offer could be that KIA is likely to follow the example of other producers and strip SOK of its status as its Russian distributor.
AvtoVAZ may need Izh Avto to produce its classical but obsolete models, which account for more than 25% of its sales, because it will need premises to assemble Renault cars.
AvtoVAZ president Boris Alyoshin said yesterday that the plant had received the SOK offer, which is valid until February 15, but refused to give details. He said AvtoVAZ needed new production sites because it is negotiating the production of new models with its partner, French automaker Renault.
"We are considering buying Izh Avto, but have not yet made the decision," Alyoshin said.
Izh Avto, which has a design capacity of 220,000 and the possibility of expanding to 350,000 cars, assembles VAZ, Izh and Korea's KIA cars. Last year, it turned out 78,800 cars, including 49,500 KIA and 21,900 VAZ models.
KIA invested at least $100 million in overhauling the plant for the production of its cars. At the same time, SOK's subsidiary, SOKIA, was given the status of KIA's general distributor in Russia and established a network of 112 certified dealerships. The company has refused to say how much it invested in promoting KIA and how much it is earning from distribution.
AvtoVAZ managers have hinted that the assembly of KIA cars would be stopped at Izh Avto if it buys the plant. "We are not sure that the Koreans need large-scale production, and are considering localization," Alyoshin said.
Mikhail Pak, an analyst at the Capital investment company, said KIA would have eventually stripped SOKIA of its status as KIA's general distributor in Russia and set up its own import company. All foreign makers of cars that are selling well in Russia have done this, including KIA's largest shareholder Hyundai, which owns a 40% stake. Last summer, Hyundai stripped the Rolf dealership of the right to distribute its models.
"SOK Group should withdraw from the project with KIA now, taking as much profit as possible," Pak said. At the same time, "AvtoVAZ needs additional capacity, and may not have enough money to buy Izh later."
Gazprom needs chairman unable to show political will
The news that Prime Minister Viktor Zubkov has been nominated a candidate for Gazprom's board of directors and is most likely to become its chairman has not become a sensation. No one doubts that a person from Putin's team, not from the team of likely future president Dmitry Medvedev, will be chosen to look after Gazprom. Gazprom is unlikely to see changes that require in its management a person able to show political will.
Such qualities were needed several years ago when it was necessary to liberalize the gas monopoly's share market after increasing the state's equity in the company. Medvedev coped with that problem well. He has been heading Gazprom's board of directors since 2000 (there was a short interval in 2001-2002 when he was deputy chairman). Now they simply need an insider in Gazprom to keep everything under control and run things the old way.
Zubkov has done well as prime minister, so why not repeat the feat in a gas monopoly? Gazprom is no longer a company calling for increased capitalization. Anyone who wanted to make money from its shares did so long ago thanks to the liberalization when Gazprom's internal and external share markets combined and its capitalization reached at first $200 billion and later $300 billion. They could stop there.
What Zubkov will be doing in Gazprom is more or less clear. It is more interesting to understand why such candidates as Igor Yusufov or Farit Gazizullin have been nominated and elected to the board to represent the state. Yusufov has been a former energy minister four years now. Gazizullin also quit the post of property relations minister four years ago.
The point is that Gazprom's board will no longer have German Gref on it, a former minister of economic development and trade, whose presence as head of Sberbank, one of Gazprom's largest creditors, would have looked logical. But equally logical will be his absence from the board of directors if we assume that the board is expected to be absolutely loyal, fully predictable and non-interfering in others' affairs.
The non-conflicting Yusufov and Gazizullin fit in better into an uncomplaining board than Gref, who is always debating and arguing at meetings.
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