MOSCOW, May 7 (RIA Novosti) Russia might use military force against Georgia / Russia, United States to monopolize fast reactor production / Food producers to form OPEC-style cartel / Gazprom to get license for Sakhalin-III block without tender / Prosecutors accuse subsoil agency of malpractices / State Duma to allow 40,000 English soccer fans to enter Russia /
Kommersant
Russia might use military force against Georgia
Russia's Defense Ministry yesterday warned that it would not allow Georgian aircraft to fly over Abkhazia. The Russian Airborne Force has said its paratroopers, who have been dispatched to the republic to reinforce the peacekeeping group there, have been instructed to "react toughly to any possible aggression by Georgian forces."
Lieutenant General Vladimir Shamanov, head of the Russian Armed Forces' main department for military training and service, said: "In the past, Georgia claimed it was not its unmanned aerial vehicles [that overflew Abkhazia]. Now it says that its reconnaissance vehicles will continue to make flights over the conflict zone."
The general added that the command staff of the Russian Defense Ministry is monitoring the situation in the conflict zone and "taking the necessary measures."
More than 400 Russian paratroopers have been dispatched to the conflict zone to reinforce the peacekeeping group in Abkhazia. They have about 30 BMD-2 airborne combat vehicles, as well as artillery guns and air defense systems, including the ZSU-23-2 towed anti-aircraft systems.
A source in the headquarters of the Airborne Force said on condition of anonymity: "The boys have not gone there for the sun and the sea. They have been set the goal of reacting to any acts of aggression by the Georgian forces, and taking adequate and tough measures to repel any attempts to use force against Russian peacekeepers and Russian citizens in Abkhazia."
These harsh statements were made after the Russian Foreign Ministry rejected the Abkhaz authorities' proposal to hand over military control of the republic's territory to Russia to ensure its security.
However, Russian Foreign Minister Sergei Lavrov commented on the initiative of his Abkhaz colleague, Sergei Shamba, by saying that "No proposals have been made on this. I do not think the possibility is being discussed."
Sources in the ministry said the Russian military would closely monitor the situation in Abkhazia at least until May 21, when the parliamentary campaign ends in Georgia.
"We expect tensions to last until the second half of May," said a source in the Foreign Ministry. "This is why the peacekeeping group has been increased to 2,500 and can be further reinforced to 3,000, if necessary. We must prevent a potential Georgian attack against Abkhazia."
Vremya Novostei
Russia, United States to monopolize fast reactor production
On Tuesday, Russian Nuclear Power Agency (Rosatom) chief Sergei Kiriyenko and the U.S. ambassador in Russia, William Burns, signed an inter-governmental agreement on civilian nuclear power. If ratified, the agreement would lift barriers hindering cooperation between Russian and U.S. nuclear power companies.
The document would allow Russia to jointly manufacture fast reactors together with U.S. companies, to produce more mixed-oxide uranium-plutonium fuel for nuclear power plants and to sell its uranium to U.S. customers without intermediaries and anti-dumping duties.
Presidents Vladimir Putin and George W. Bush agreed to draft the agreement during the July 2006 G8 summit in St. Petersburg.
Although analysts initially estimated its value at $9 billion, the agreement could now be worth $15 billion due to rising fuel and energy prices and a weaker dollar.
However, Congress, which is divided on the document, may not ratify it.
A Rosatom source said joint cooperation in the field of fast reactor technology could help finance the $5 billion R&D projects and launch the commercial production of such reactors.
The United States would gain access to Russian know-how and would learn to operate local fast reactors. Consequently, both countries would de facto monopolize global fast reactor production.
It appears that Washington, which controls 25% of the global uranium market, will try and persuade Moscow to enrich U.S. uranium. Former Deputy Minister of Atomic Energy Bulat Nigmatulin, currently first deputy general director at the Institute of Natural Monopolies' Problems, said Russia had surplus uranium-enrichment facilities.
However, Washington may find it unprofitable to enrich uranium in Russia because one kWt/hour of electricity costs 7.3 cents here, as compared to 6 cents in the United States, Nigmatulin told the paper.
He said prices would go up by 200-300%, rather than 100%, as envisioned by the Economic Development and Trade Ministry, but that other countries would post lower growth.
"Uranium enrichment would become very expensive, making the Russian nuclear industry even less competitive," Nigmatulin said.
It took two years to draft and sign the bilateral agreement. However, nobody knows how long it will take to finalize cooperation projects if Congress ratifies the document.
Kommersant
Food producers to form OPEC-style cartel
Thai Foreign Minister Noppadon Pattama said Tuesday that his country would soon host the first summit of a new international organization, the Council on Rice Trade Cooperation.
The Association of Southeast Asian Nations (ASEAN) and the Asian Bank for Development said yesterday they did not support the rice cartel idea. However, Thailand is unlikely to drop it now, all the less so since the various cartel ideas have grown increasingly popular lately. Following Bangkok's initiative, Moscow proposed establishing a "grain OPEC."
The "rice OPEC" initiators believe the first five member countries will be Vietnam, Cambodia, Laos, Myanmar and Thailand, which account for over 50% of global rice export. It means that five out of ten ASEAN members are ready to join a club directed against the other five, which import rice.
Philippines, the world's biggest rice importer, reacted with the greatest outrage, as that country has found itself on the verge of a severe rice shortage.
The "rice OPEC" ideologists, Thai Prime Minister Samak Sundaravej and Cambodian PM Hun Sen, have often reiterated that a rice cartel was only needed to stabilize prices.
Incidentally, Thai government spokesman Vichienchot Sukchokrat was much more open last week: "With the oil price rising so much, we import expensive oil but sell rice very cheaply, and that's unfair to us and hurts our trade balance," he said.
It must mean that Southeast Asian nations plan to take advantage of the current market situation to compensate their losses on fuels.
The rumors of the rice cartel must have reminded Russian Agriculture Minister Alexei Gordeyev of his old idea to set up a "grain OPEC." He said at a meeting with his Ukrainian counterpart, Yury Melnik, Monday that a single international body was needed to coordinate grain production and trade.
Assuming that energy and food prices will continue rising, and so will the world leaders' ambitions, we can expect the emergence of a "coffee OPEC" (Brazil, Colombia, Vietnam, Indonesia, Mexico and Ethiopia), a tea cartel (China, India, Sri-Lanka, Kenya and Turkey), and possibly a banana one (Ecuador, Philippines, Costa-Rica and Colombia).
RBC Daily
Gazprom to get license for Sakhalin-III block without tender
Gazprom has succeeded in its efforts to get a license for strategic shelf deposits without a tender. At a meeting with the prime minister on May 6, 2008, the decision was taken to prepare documents for the issuance of a license for the Kirinsky block of the Sakhalin-III project, for which Gazprom has long competed with Rosneft, to the gas monopoly within a month.
The estimated resources of the Kirinsky block are 453 million metric tons of oil and 930 billion cubic meters of gas.
Officials from the ministries and departments concerned told RBC Daily that Rosneft had agreed with this decision. One of the officials explained that the decision on the license for this block could be taken only after Vladimir Putin signed the law on foreign investments in strategic sectors on May 6, in accordance with which only state-controlled companies can develop the shelf. It was decided that Gazprom should mostly deal with gas resources and Rosneft with oil resources.
A source close to the gas monopoly has confirmed that the license will go to Gazprom. The manager thinks that the government's decision is quite logical because the Kirinsky block has mostly gas resources. He indicated that the gas monopoly could start seismic exploration on the block this year in order to start gas deliveries from it in 2014. In his opinion, the company will be able to explore the shelf with the help of its subsidiaries, without any foreign help.
Extra money and shelf technology will surely come in handy, and there are more than enough foreign companies wishing to provide them. Earlier, some Japanese companies, India's ONGC, Korea's Kogas or KNOC, and China's Sinopec displayed an interest in the Kirinsky block. They were ready to assume geological and financial risks.
Valery Nesterov of the Troika Dialog investment company believes that Japanese companies have the greatest chance of becoming Gazprom's partners in the Sakhalin-II project. They are followed by India and China and then European companies, such as BP and Shell. U.S. companies ExxonMobil and Chevron are the "outsiders."
Mikhail Subbotin, head of the SRP-Expertiza consulting company, thinks that Gazprom could set up a consortium, such as in the Shtokman project, and attract several participants by selling them shares of the project company.
Gazeta.ru
Prosecutors accuse subsoil agency of malpractices
The Prosecutor General's Office has accused the Federal Subsoil Resources Agency, Rosnedra, of malpractices during the issuing of licenses. Analysts explain the conflict by the interference of Gazprom, which has an old score to settle with the agency.
Natural Resources Minister Yuri Trutnev and head of Rosnedra Alexander Ledovskikh have been advised to punish several senior officials at the agency. Trutnev promised to conduct his own inspection.
The conflict goes back several years. In late 2006, the Prosecutor General's Office warned the head of Rosnedra that violations during the issue and registration of licenses were not permissible.
Experts explain the current dispute by pressure put on Ledovskikh, above all by major companies.
Dmitry Abzalov, an expert with the Moscow-based Center for Current Politics, said: "Alexander Ledovskikh and Gazprom have been quarrelling for years. The head of Rosnedra wanted to consolidate gas service companies under his agency, but they were made subordinate to the gas monopoly. At the same time, the Prosecutor General's Office has close relations with Gazprom, and so it is most probably Gazprom that is trying to take a blow at Rosnedra."
Ledovskikh personally has nothing to fear, Abzalov said.
"Many attacks have been directed against him, none of them successfully. Ledovskikh is rumored to have contacts in the government, and so he has nothing to fear this time," the political analyst said.
According to Abzalov, the latest blow has been made to weaken the stance of Ledovskikh and his agency during the formation of a new government.
"Such attacks like the complaint by the Prosecutor General's Office are designed to torpedo Rosnedra projects in the government, and this goal will be most likely attained," Abzalov said. "People will be wary of projects proposed by an agency that has been accused of malpractices."
Kommersant
State Duma to allow 40,000 English soccer fans to enter Russia
On Thursday, the State Duma, the lower house of parliament, will pass amendments to the country's exit-entry law and will allow the president to introduce simplified entry regulations for foreign citizens.
The rush is motivated by a desire to help the 40,000 English soccer fans coming to Moscow for the Champions League final.
The bill, stipulating exit-entry regulations in line with federal legislation, international agreements and presidential decrees, was submitted to the Duma in the evening of May 5.
On Wednesday, the Duma council was expected to discuss the upcoming May 8 plenary meeting that will approve Vladimir Putin's candidacy for prime minister.
Mikhail Grishankov, chairman of the Duma's security committee and the bill's co-author, said the house would pass the bill's three versions on May 8.
On Tuesday, the Federation Council, the upper house of parliament, decided to approve the amendments on May 12.
The president will therefore have time to sign and publish the new law and the simplified entry regulations decree by May 21.
Boris Nadezhdin, member of the SPS (Union of Right Forces) federal political council and law chair head at the Moscow Engineering and Physical Institute, said this law making trend had manifested itself in the last five years.
He said the Duma opposition had tried to pass detailed bills in the past, and that the lower house was now leaving all the details to the president or the government.
According to Nadezhdin, this matches Putin's "manual-control" concept based on practicality, rather than regulations.
The Russian Embassy in London has already notified English fans that they can enter Moscow on May 17-25 without a visa, and that they need English passports, match tickets and Russian migration cards.
The Federal Security Service's Border Service said it was pointless to comment on the bill's mechanism pending its enactment because nobody wanted to lose their jobs.
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