MOSCOW, February 12 (RIA Novosti) Iran poised to support pipeline projects bypassing Russia / Russia, China try to stop space arms race / Government concerned over lack of control on Internet / Power monopoly chief says Russia's financial outlook bleak / HydroOGK papers to replace RAO UES shares on the market / Formula One owner plays Russian card in Australia
Nezavisimaya Gazeta
Iran poised to support pipeline projects bypassing Russia
Tehran is certainly full of surprises. But the latest one is unpleasant for Moscow.
Last Saturday, the Iranian ambassador to Azerbaijan said he did not rule out his country's joining the White Stream gas pipeline project promoted by Ukraine's Prime Minister Yulia Tymoshenko only to annoy Russia. Analysts suggest Tehran's demarche was triggered by Russia's decision to support the anti-Iranian resolution in the United Nations Security Council.
The Iranian diplomat made the unexpected statement less than two weeks after his country's Foreign Minister Manouchehr Mottaki said Iran could possibly export natural gas through the Nabucco pipeline, set to compete with Russia's South Stream project.
However, analysts admitted this does not mean that Tehran will jump to join the new pipeline project on the Turkmenistan-Azerbaijan-Georgia-Ukraine route. The statement could be a warning to Moscow, which considered supporting the UN anti-Iranian draft resolution, although admittedly a milder version.
On the other hand, experts maintain that other explanations are also possible, predominantly economic ones. Ilkham Shaban, head of Azerbaijan's Oil Research Center, said Iran was interested in hydrocarbons being shipped from the Caspian basin to Europe via its territory. So its support for the pipeline projects alternative to Russian ones is perfectly logical.
Timur Khairullin, a senior analyst with the Antanta Capital investment company, said Iran's statements could not be easily interpreted. On the one hand, Iran's representatives have shown they are interested in setting up a "gas OPEC," but such an alliance would not need a project like Nabucco. On the other, Iran is obviously willing to participate in alternative projects. This stance is also understandable as Iran has substantial gas resources and needs new export channels and new sales markets to turn them into cash.
However, White Stream is hardly feasible, the analyst said. As for Nabucco, doubts have emerged that there will not be a sufficient amount of gas to fill it now that Gazprom has reached an agreement on the South Stream project. Nabucco's timeframe has been moved to back more than once, and the probability that it will ever be built is dwindling, he concluded.
RBK Daily
Russia, China try to stop space arms race
On Tuesday, Russian Foreign Minister Sergei Lavrov will unveil a draft Russian-Chinese treaty on banning the deployment of space weapons at the World Disarmament Conference in Geneva.
The 1967 Outer Space Treaty bans the deployment of weapons of mass destruction in orbit, while the new draft document places a ban on the deployment of any weapons, including kinetic weapons now being actively developed in the United States.
In January 2007, China successfully tested an anti-satellite weapon, using a missile to destroy an old weather satellite 800 km above the Earth. Although the missile carried a dummy warhead, the test provoked a hysterical reaction from the United States.
The latest Russian-Chinese initiative is another response to Washington's decision to exit from the 1972 Anti-Ballistic Missile (ABM) Treaty in 2002.
Alexander Pikayev, director of the Department of Disarmament and Conflict Resolution at the Moscow-based Institute of World Economy and International Relations (IMEMO), said the U.S. Armed Forces relied heavily on space satellites, whose possible destruction would cripple their combat capabilities.
According to Washington, old-time agreements are enough because there is no indication of an arms race beginning in outer space.
Pikayev said the George W. Bush administration did not like the idea of arms control, and that Washington planned to implement Project Brilliant Pebbles, a non-nuclear system of satellite-based, watermelon-sized mini-missiles designed to use a high-velocity kinetic warhead, and other similar systems.
Moreover, the United States wants to use high-velocity wedge-shaped objects for destroying underground bunkers under the Arrows of God project.
Pikayev said it would take at least 10 years to implement such projects, but that the United States already possessed space weapons, including Ground Based Interceptors in California and Alaska and those to be deployed in Poland as part of a missile-defense system against Iran.
Just like its Chinese equivalent, the GBI is a medium-range missile with a dummy warhead for hitting targets in outer space.
Although few experts believe that Washington will sign the proposed treaty, Moscow and Beijing seem to have other plans. Pikayev said this was an attempt to break the deadlock at the Geneva conference, which has failed to compile an agenda since 2001, and to portray the United States as an aggressive country that continued to dismantle the system of international law.
He said this would subject Washington to all-out criticism and force it to defend itself.
Kommersant
Government concerned over lack of control on Internet
Representatives of the Russian parliament, the Justice and Interior ministries, and the Public Chamber presented on Monday their plans to ensure legal regulation of the Internet.
To regulate the Russian Internet, the Russian segment of the World Wide Web, they proposed to make amendments to the law on mass media, which says that websites visited by over 1,000 users daily should be registered as mass media. Experts on the media and the Internet said the idea was technically impracticable.
"One can find just about anything online today," said Vladimir Slutsker, a member of the Russian parliament's upper house and one of the plan's initiators.
"One comes across kids' pornography, terrorist sites, extremist slogans, slander and defamation. This vast flow of information has to be legally regulated," he said.
Russia's Communications Ministry said there are 35 million Internet users in Russia - a figure comparable with the total circulation of all of Russia's printed media.
Alexander Brod, a member of Russia's Public Chamber and director of the Moscow Bureau for Human Rights, said there are at least 800 sites promoting extremism in the Russian Internet.
Colonel General Boris Miroshnikov, head of the special technological projects bureau at the Interior Ministry, said last week that users connecting to the Web for the first time should be registered with their passport details specified. "This registration is needed to protect society. By accepting this haze of anonymity, we are encouraging con artists to enter our dwellings," the general insisted.
Experts, however, continually stress that the government's initiatives are infeasible. "One small observation: every time the government fails to stabilize the country, it turns to amending the law on mass media," Igor Yakovenko, secretary general of the Russian Journalists' Union, told Kommersant.
"These amendments will never make it though parliament," said Anton Nosik, one of the founders of several online news services - Gazeta.ru, Lenta.ru and Vesti.ru.
"Even Vladimir Putin, then prime minister, said back in 1999 he was against compulsory registration of websites. Therefore, the parliamentary majority won't support these amendments. Even if passed, they will still be impracticable because there is no uniform methodology for counting the number of visitors to a website. Even the registration of printed media is not actually licensing, but more of a notification," he said.
Nezavisimaya Gazeta
Power monopoly chief says Russia's financial outlook bleak
Anatoly Chubais, CEO of national electricity monopoly Unified Energy Systems, has come out with more Doomsday rhetoric. According to him, Russia is on the brink of an inevitable financial crisis. Analysts say the CEO is overdramatizing the situation. He often does, and usually in his own interest.
Chubais has once again expressed concern that the financial crisis will inevitably spill into the political field, provoking the closure of the Russian economy to other countries and leading inevitably to disaster. An alternative scenario, according to the head of the reforming monopoly, is to restore the basic principles of liberal economic policy from the 1990s. He rates the chances of the two scenarios as 50-50.
All the economic risks mentioned by Chubais so far are the stuff of fantasy, according to analysts.
Yuliya Tseplyaeva, Merrill Lynch's chief economist for Russia and the CIS, said: "Finance Minister Alexei Kudrin considers Russia a 'safe haven' for foreign investment, while Anatoly Chubais speaks of risks and capital flight into U.S. treasury bonds. But the main question is: will capital come as borrowings or as foreign direct investment? Since the ruble is bound to strengthen, I choose the best-case scenario. Our estimates show that $75 billion will enter Russia in 2008."
She was echoed by Agvan Mikaelyan, general director of FinExpertiza, who said: "For Chubais' Doomsday forecasts to materialize, at least 8 to 9 worst-case scenarios must be combined. But even if the U.S. economy crashes, Russia's will hold out thanks to its reserves and independence from the American economy."
"Chubais nearly always produces his scare stories to coincide with the specific tasks facing UES. As a rule, he invokes an investment crisis when his organization is about to receive any cash from the sale of its assets."
The latest story should also be viewed from this angle, the analyst believes. The odds are, he thinks, that some of the upper echelons are opposed to the sale of core assets of a reforming power monopoly to foreign investors, and this is the reason why Chubais needs to lobby the issue to squeeze the most out of the reform.
Gazeta
HydroOGK papers to replace RAO UES shares on the market
On February 11, HydroOGK, the largest generating subsidiary of Russian electricity monopoly RAO United Energy Systems (UES), was traded on Russian stock markets for the first time.
Investors valued HydroOGK at $16.4 billion. Its capitalization may grow in due course: analysts say that HydroOGK papers are likely to replace RAO UES as a blue chip.
Last year, only separate hydropower operators were traded on the stock market, with the list including most Russian hydropower plants. In January, HydroOGK completed its consolidation and appeared on the market as a united company.
Analysts regard its first moves on the stock market as a success. By the end of the day, the RTS valued the company at $690 per KW of operating capacity, which put its capitalization at $16.4 billion. However, so far HydroOGK has been traded cheaper than its constituent parts last year. The over-the-counter trading was more successful: it put the company's value at $1 billion higher - $17.4 billion.
However, analysts warn against hasty conclusions as HydroOGK has the potential for growth. The market situation is not quite favorable at the moment, but eventually HydroOGK may replace the energy holding (which will cease to exist as a single company on July 1, 2008) on the market, and its shares, which used to be the most liquid in the power sector and listed with the most stable blue chips of the Russian market, will disappear from the stock market.
HydroOGK is, in fact, the only subsidiary of RAO UES which can compare with the energy holding in terms of scale and liquidity, and has many shares in free circulation, says Stanislav Kleshchev, an analyst with VTB-24, a retail bank of the Vneshtorgbank (VTB) Group. HydroOGK is one of the largest public hydropower operators in the world and this factor will attract investors, including foreign ones, says Alexander Kornilov of Alfa Bank.
Kornilov recalls that two years ago RAO UES was traded within nearly the same limits as its hydropower operator - $16-17 billion. The energy holding's capitalization has reached nearly $50 billion in recent months.
Kommersant
Formula One owner plays Russian card in Australia
Bernie Ecclestone, CEO of Formula One Management and Administration, plans to hold talks on organizing a leg of the Formula One World Championship in St. Petersburg.
British media said Ecclestone planned to attend the Laureus World Sports Awards in St. Petersburg's Mariinsky Concert Hall on February 18 and to meet with city Governor Valentina Matviyenko.
But a source at the Russian Automobile Federation said Valentina Matviyenko still knew nothing about Ecclestone's plans to meet with her.
However, Ecclestone's visit probably aims to pressure the organizers of the Australian Grand Prix at Albert Park in Melbourne, whose contract is to expire in 2010.
Ecclestone, who has been trying to organize the Formula One Grand Prix in Russia for a long time, coordinated all details with Moscow authorities in March 2002. Although there were plans to build a $100 million race circuit in the city's Nagatino floodlands, Mayor Yury Luzhkov refused to sign the unprofitable contract at the last moment because city authorities were not entitled to their share of ticket sales, broadcasting and advertising proceeds.
Due to the time difference between Australia and Europe, the main Formula One market, the event is broadcast to Europe in the early morning. Ecclestone demanded that the Australian Grand Prix be held at night; the organizers did not object but said they did not have the extra $40 million to illuminate the racetrack. But Melbourne authorities are in no mood to help.
Australian Grand Prix chairman Ron Walker said the race could go to Russia if the authorities do not hurry, and that President Vladimir Putin was ready to put a phenomenal sum into hosting the event.
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