MOSCOW, April 14 (RIA Novosti) Putin may sign decree on breakaway Georgian republics/ Power taken over sooner than expected/ Russia will have no dual power/ Gazprom, OMV cannot divide Austria's gas market/ Russia short of oil for second phase of Baltic pipeline system/ Great Wall unable to find partners in Russia
Nezavisimaya Gazeta
Putin may sign decree on breakaway Georgian republics
Vladimir Putin may sign a decree on developing relations with Abkhazia and South Ossetia before President-elect Dmitry Medvedev takes office on May 7.
The newspaper's sources in the Kremlin administration claim that the document will allow Russian ministries to establish direct ties with their counterparts in the two breakaway Georgian republics.
The sources also warn against looking for similarities with Taiwan or other analogous territories, adding that Russia will go its own way in relations with Abkhazia and South Ossetia.
Konstantin Zatulin, first deputy chairman of the parliamentary committee on the CIS and compatriots, said: "This may not be the best moment for taking radical decisions. On the other hand, it might be better to risk today because such decisions will cost more tomorrow. Unless we solve the problem now, it will reemerge before the 2014 Winter Olympics, just as the problem of Tibet is now threatening the Chinese Olympics."
A Russian diplomat who had worked in Georgia for a long time said now is the best time for making the decision.
"Republicans are preparing to hand over power in the United States, and Americans are too busy with the upcoming elections to care about foreign policy matters," he said. "Would they bother about Abkhazia and South Ossetia when even the issue of Iraq has retreated into the background? And Russia does not really care much about what Georgia will do, because it does not need to maintain high-level relations with it."
The source said Russia would do its best to stop Georgia from joining NATO. "The best way would be to deploy the Russian armed forces in Abkhazia and South Ossetia," he said.
According to the newspaper, Moscow might sign military pacts with the two breakaway republics, similar to those the United States signed with Taiwan. Next it could deploy its troops at its military base in Gudauta, which is currently closed but still has the requisite infrastructure and a good airfield.
It might also reactive its naval base at Ochamchira on the Black Sea coast close to the Georgian border. If Russia deploys submarines there, NATO ships will hardly patrol the Abkhazian coast.
As for the formal recognition of Abkhazia and South Ossetia, the Russian Foreign Ministry recommends doing this only if Georgia starts the process of accession to NATO, or in case of military aggression against either of the two republics.
On the other hand, a source in the ministry said, Russia should have recognized Abkhazia and South Ossetia back in 1993.
Vedomosti
Power taken over sooner than expected
It cannot be ruled out that Vladimir Putin will actually step down, according to Professor Konstantin Sonin from the Moscow-based New Economic School (CEFIR). Moreover, President-elect Dmitry Medvedev is taking over faster than analysts have expected. It looks like junior and middle officials have already changed their allegiance.
It is not that the president-elect has inspired business executives with his promises of lowering the administrative burden and rooting out corruption, or won over the liberal opposition with statements that freedom is better than non-freedom. Although Medvedev has convinced certain key players that he has a real chance of taking power, it was not the most important thing either.
The reason is that Russia's mighty bureaucratic machine has realized that stability is not the same as preserving Putin's personal power: restructuring the entire political system for the sake of one person is fraught with more shocks than the smooth replacement of one leader with another.
The political elite is still discussing the various scenarios in which Putin could play a significant role, but these debates also sound like a farewell as clear as global leaders' statements. Russians are also unambiguously expressing their views of what's going on. That Putin's sky-high popularity was almost entirely inherited by Medvedev does not mean indifference, but rather the public's clear understanding of the nature of that recognition. People vote for good times over bad times, and it is of secondary importance to them which politician impersonates the good times, the analyst writes.
Admittedly, Putin has not yet left, but, even if he becomes the United Russia's leader at today's party congress, it will hardly influence the general situation. The pro-Kremlin party does not have any real resources which could help Putin retain power.
The 300-odd United Russia parliament members do not take Putin's orders, but follow the one who runs the country. If they sense that Medvedev is taking over everywhere, he will also be the one to control parliament. And, since no one wants to be late in guessing the next national leader, Medvedev might take over sooner than expected, Sonin concluded.
$martMoney
Russia will have no dual powerBy the time Vladimir Putin becomes prime minister, this post will become far weightier than during his presidency. As was announced last week, two regional control instruments will be transferred from the Kremlin to the government: from now on governors and presidents of republics will report to the Ministry of Regional Development, which is also likely to assume control of envoys in the federal districts.
Formally, Putin is not breaking his promise not to strip the administration of its powers in favor of the government - if only because the president's right to appoint envoys is not spelled out in the Constitution and governors will continue to be appointed by the Kremlin. But the new president will have less leeway for political will in regional politics.
Bureaucrats that disclosed these details claim that the move is due to there being practically no regional policy left: they say policy vanished into thin air once regional laws were brought in line with federal ones, and regional heads started to be appointed instead of directly elected. Now, they say, the focus is on the economy, and that is the government's direct responsibility. But this explanation is questionable.
To begin with, the economic performance of a region even now is far from a top priority: whenever the need arises to replace the governor, turnout and the number of votes cast for United Russia prove far more important considerations. Second, it is the task of envoys to handle such a political objective as merging regions, which could well take place during Putin's premiership.
According to Regional Development Minister Dmitry Kozak, Russia will have 10 macro-regions as a result (a Kremlin source named 12, explaining the need for reform by the fact that "the Republic of Gorny Altai cannot be an active agent of federal policy").
According to officials, following the inauguration there will be 10, rather than seven, envoys, which confirms Kozak's announced plans for regional merging. Those envoys who succeed in consolidating their areas are likely to become super-governors. The fact that they will "marry" regional elites under the premier's eye, not the president's means that dual power, so feared by many observers, will not materialize: Putin will deal with the matter alone.
Kommersant
Gazprom, OMV cannot divide Austria's gas market
Russian gas giant Gazprom is now discussing a new route for its South Stream project - from Serbia via Slovenia to northern Italy. Gazprom CEO Alexei Miller has already obtained support for the project from Slovenia's President Danilo Turk and Prime Minister Janez Jansa.
As Gazprom's relations with Austria have worsened, the public announcement of these negotiations is to show Austria that South Stream may bypass it.
Russia has been supplying gas to Slovenia (currently chairing the EU) since 1978, but its supplies have been rather small: in 2007, Gazprom Export delivered a mere 590 million cubic meters of gas to Slovenia.
Slovenia's possible entry into the South Stream project seems quite a surprise. So far, it had been considered that the final pipeline route was done and dusted: it should begin in Russia, run across the Black Sea in Bulgaria and then pass via Serbia and Hungary to Austria and to northern Italy. Another leg should pass to southern Italy via Greece.
Maxim Shein of BrokerCreditService regards Miller's statement as a warning to Austria.
According to Mikhail Korchemkin, director of East European Gas Analysis, Gazprom's relations with Austria's national energy leader OMV worsened back in January, when the companies signed a cooperation agreement.
Under this document, Gazprom was to receive a 50% stake in the Central European gas hub (Austria's gas trading floor) in Baumgarten and also build, jointly with OMV, underground gas depots in Austria and the neighboring countries.
However, several days after the agreement was signed, it became known that the Russian gas monopoly refused to sell gas to traders which had reserved capacities in the trans-Austrian gas pipeline, Mikhail Korchemkin said.
He quotes Vladimir Khandokhin, head of a Gazprom Export department, as saying that Gazprom will not sell gas to owners of pipeline facilities as this is contrary to its strategy aimed at increasing direct gas sales to end consumers.
In Korchemkin's opinion, Gazprom and OMV "have just failed to divide Austria's domestic gas market."
The South Stream project, which will have an annual capacity of 30 bullion cubic meters of gas, is being implemented within Gazprom's agreement with Italy's Eni on a parity basis. The pipeline is to be commissioned in 2013.
Therefore the last transit country of the South Stream project is put to question. Gazprom has signed no agreements with either Austria or Slovenia on their entry into the project.
Kommersant's sources in Gazprom and the Russian ministries and departments concerned say they are not ruling out any of the two versions.
Vedomosti
Russia short of oil for second phase of Baltic pipeline systemRussia's Industry and Energy Ministry has proposed postponing the construction of the second phase of the Baltic Pipeline System, BPS-2, over a shortage of oil.
The idea of a 1,300-km (808-mile) pipeline with a capacity of 50 million tons (367.5 million bbl) of oil, estimated at $2 billion, was proposed in January 2007 to lessen Russia's dependence on oil transit across Belarus.
There is not enough oil for the second phase of the project, said a source in the government. According to the Industry and Energy Ministry, it would not be expedient to redirect oil from the Druzhba pipeline supplying European refineries, or to increase the surplus capacities of main oil pipelines.
The Ministry has proposed reconsidering the BPS-2 project after the East Siberia-Pacific Ocean (ESPO) pipeline is completed in late 2009.
Industry and Energy Minister Viktor Khristenko said the other day that there is no immediate need to build the BPS-2, because Russia is reducing oil exports and increasing domestic refining.
The government has not confirmed or denied information about the Ministry's idea.
"The president of Russia has the final say on the matter [of the BPS-2]," said a government spokesperson. The Kremlin has refused to comment.
Denis Borisov, an analyst at the Solid investment financial company, confirms the Ministry's calculations.
According to him, Russia will produce around 520 million tons (3.82 billion bbl) of oil in 2010 and increase refining from 228 million tons (1.68 billion bbl) in 2008 to 245 million tons (1.8 billion bbl) in 2010. Besides, 30 million tons (220.5 million bbl) of oil is to be supplied to the ESPO pipeline, which leaves no oil for the BPS-2.
However, Transneft President Nikolai Tokarev told the popular daily Vedomosti that oil from the Vankorskoye field in the Krasnoyarsk Territory, with C1+C2 recoverable reserves of 125.3 million tons (920.96 million bbl) of oil and 76.8 billion cu m (2.71 trillion cu f) of gas, as well as 30 million tons (220.5 million bbl) of oil from the Odessa-Brody pipeline could be redirected to the BPS-2.
Transneft refused to comment on the possibility Friday.
Business & Financial Markets
Vedomosti
Great Wall unable to find partners in Russia
The Russian government failed to approve Chinese automotive giant Great Wall Automotive Holding to build its car plant in the special economic zone Alabuga in Tatarstan, a Russian republic in the Volga area. However, Great Wall still plans to expand production in Russia and to establish a joint venture.
Analysts said the government's refusal to support such projects could scare away potential investors.
Great Wall wanted to build a $100 million plant with an annual capacity of 50,000 to 75,000 cars.
Troika Dialog analyst Gennady Sukhanov said the relocation of production from China made it possible to assemble cheap cars because imported car components cost less than ready-made vehicles.
Great Wall CEO Wang Fenying said the company was ready to supply the required production equipment and components to its Russian partners. Although the company wants to set up a joint venture in Russia, Fenying said no partner had been found yet.
Great Wall SUVs are assembled in Gzhel, a town near Moscow. Fenying said the company wanted to assemble all its production vehicles, including passenger cars that appeared on the Russian market this year.
Mikhail Pak, an analyst at the Kapital investment company, said the Chinese automaker would have difficulty finding partners in Russia because of government opposition.
He said the government had persuaded Avtotor to atop assembling Chery vehicles, and that construction of a Great Wall plant would create problems for Russia's largest carmaker, AvtoVAZ.
In 2007, Great Wall sold 6,238 cars in Russia and boosted sales by 50% (2,607 vehicles) in January-March 2008.
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