MOSCOW, May 28 (RIA Novosti)
Tbilisi demands Russia's apology for downed drone / Lull before storm in Kosovo / TNK-BP conflict could disrupt operations / Rosneft to claim Barents and Kara shelves / Russian, French, U.S. firms invited to build a nuclear plant in Belarus / Gas prices will not be liberalized in Russia until 2015
Nezavisimaya Gazeta, Gazeta.ru
Tbilisi demands Russia's apology for downed drone
Georgia has cited a UN mission report to demand that Russia officially apologize and pay compensation for downing a Georgian unmanned aerial vehicle (UAV) over Abkhazia in late April.
The UN observer mission in Georgia, or UNOMIG, said that a Russian MiG-29 or Su-27 fighter plane downed the drone before heading into Russian airspace.
Moscow does not trust the UN mission's report. The Abkhazian leadership has said its conclusions are biased, and that the republic might withdraw from UN-sponsored talks with Georgia.
At the same time, it has been reported that Russian President Dmitry Medvedev will meet with Georgian President Mikheil Saakashvili soon. However, experts doubt the outcome of the talks can be positive.
"We admit that we have downed all seven Georgian drones," Abkhazian Defense Minister Garri Kupalba told the popular daily Nezavisimaya Gazeta. "We have provided the proof to the UN mission and showed them the fragments of the downed UAVs and the video footage made by our L-39 plane that shot them down."
"We have even invited General Khattak, the chief military observer of the mission, to conduct an experiment, asking Georgia to fly one more drone while the general will watch how we shoot it down," the Abkhazian defense minister said.
Abkhazia, which questions the objectivity of international mediators, may walk out of the UN-sponsored peace talks. However, Abkhazian Foreign Minister Sergei Shamba said there is no reason to hurry, because the talks have been under way for two years.
It was reported on Tuesday that the Russian and Georgian presidents would meet to discuss the problem. It is clearly Georgia that needs the talks, but political analysts doubt they will be held.
Alexei Mukhin, head of the Center for Political Information, told the Gazeta.ru online newspaper: "The conflict between Georgia and Russia, especially at the top level, has been aggravated to a point where a meeting between Medvedev and Saakashvili would be senseless."
Mukhin said Georgia has launched an offensive against Russia on all fronts, including in Abkhazia, the UN and the WTO.
Alexei Vlasov, deputy head of the Moscow-based Center for Social and Political Processes in Post-Soviet Countries, said this is merely an illusion of constructive dialogue.
"Don't take this information at face value," he said. "Saakashvili now has an opportunity to back off and create the illusion of a constructive dialogue, because the parliamentary elections are over and passions will subside in Georgia. Honestly, we cannot expect Medvedev and Saakashvili to settle all problems within a day."
Rossiyskaya Gazeta
Lull before storm in Kosovo
The hundred days that followed Kosovo's self-independence has failed to bring peace to the war-ravaged Serbian province. Analysts forecast a worst-case scenario.
Alexander Torshin, deputy speaker of Russia's Federation Council, has visited Kosovo as head of an observers' mission from the CIS Interparliamentary Assembly. He was struck by an abundance of military equipment and people in military uniform: "Even in Chechnya, in the worst of times, I never saw such a mass of weaponry and equipment. It is hard to understand how these mixed troops are run. It seemed to me the province is divided into occupation zones, above all those allocated to NATO countries."
The Russian parliamentarian was especially surprised by the appearance of German soldiers: "As I was leaving Mitrovica, my eye caught three German armored personnel carriers with black crosses on their sides. The soldiers' appearance was a shock to me. Their beards made them look like mujahedeen. It was a fantastic sight. This was the first time I had seen such Bundeswehr men."
Political analyst Alexander Rahr says: "The hundred days of Kosovo's declaration of independence will be given a low-key celebration in the European Union, if at all. Most likely the date will be quietly skipped. Because there is nothing to boast about. The European Union lacks a solid legal basis for recognizing Kosovo."
The EU, the analyst believes, is still split over the issue of Kosovo's independence, which in one way or another feeds through to relations with Russia:
"Those who expected some progress with Medvedev installed as president were wrong. Russia is firm in its stance - it refuses to recognize the independence of Kosovo and the legitimacy of moves by countries that did. The differences that plagued West-Russia relations while Kosovo was distancing itself from Serbia have not been healed. And now a new issue tops the agenda - that of independence for Abkhazia, South Ossetia and Transdnestr as a response to what took place in Kosovo."
According to Rahr, some analysts believe that the situation in Kosovo is a lull before a devastating storm. "Anything can be expected," Rahr says. "Russia, naturally, is predicting a conflict between the Serb and Muslim populations. Separatist movements across Europe may take cue from the Kosovo precedent and make their cases."
Kommersant
TNK-BP conflict could disrupt operations
A consortium of Russian shareholders agreed there is a corporate conflict with BP, which is trying to hold back TNK-BP's development, fearing international market competition. If the conflict between the shareholders fails to be settled in two weeks' time, it could upset an annual shareholders' meeting and the company's work.
The AAR consortium (Alfa Group, Access and Renova and 50% of TNK-BP) reported "discussions with BP concerning the strategy and tactics of the company's development."
The consortium's press release said that decisions on overseas development should, in its view, be made with a view to their effectiveness for TNK-BP "even if such a development is in conflict with BP business." AAR also believes "the company should maintain a reasonable balance between Russian and foreign specialists."
Currently, TNK-BP has on its staff about 150 British nationals whose visas expire at the end of June. But, on the initiative of TNK-BP executive director German Khan, their numbers could be more than halved, trimmed down to 63 people.
Russian authorities are demonstrably keeping away from the conflict, at least officially. Deputy Prime Minister Igor Sechin, who oversees the oil and gas industry, was yesterday quoted by Reuters as saying that TNK-BP co-owners should themselves settle their inner conflict.
Sources close to TNK-BP shareholders say the Russian side is refusing to budge and is trying to get as much control as possible over the company and its subsidiaries. Their shareholders' annual meetings are set for June 10-11. One of the items on the agenda is re-election of the board of directors. According to one of the sources, AAR is now trying to increase its presence on the boards.
On the board of the head company, TNK-BP Holding, the British have five seats out of nine. No TNK-BP Holding meeting has yet been called, although the law on joint-stock companies demands its holding not later than June 30. The TNK-BP rules require that shareholders be informed of a meeting no later than 20 days before it. It appears the company must go through all the necessary corporate procedures before June 10.
Solid brokerage analyst Denis Borisov believes the main bone of contention will be the size of TNK-BP dividends. However, he is sure that shareholders will reach a consensus and the meeting will go ahead. If shareholders fail to agree in the remaining week and a half, the powers of members of the board will lapse on June 30, says Maxim Chernigovsky, head of analysis at the Vegas Lex law firm.
RBC Daily
Rosneft to claim Barents and Kara shelves
Russian state-run oil company Rosneft intends to claim development licenses in the Barents and Kara seas, Alexander Svistelnikov, head of the Rosneft division for prospective shelf projects, said yesterday.
Analysts described the company's plans as ambitious, and said it could implement them only in cooperation with its partners.
Natalia Milchakova of the Otkrytie financial corporation said Rosneft was unlikely to develop northern fields independently. Hydrocarbon reserves in the Barents Sea could amount to 15-16 billion metric tons of oil equivalent. The Ledovoye, Ludlovskoye and Murmanskoye strategic gas fields still remain undistributed, the analyst said.
"We estimated the reserves of each field at 2-2.5 trillion cubic meters, with the gas reserves of the Shtokman field, to be developed by Gazprom and its foreign partners, exceeding 3 trillion cubic meters," Milchakova said. Rosneft could claim the right to exploit the fields as a state corporation, but it cannot export gas and compensate for production expenses without Gazprom's pipelines.
Rosneft could focus on oil production, most probably with an overseas company (StatoilHydro, for example), and Gazprom could develop gas fields in the region, the analyst said.
Rosneft is unlikely to settle in the Kara Sea, Milchakova said. Gazprom received licenses for the development of the Antipayutinskoe field (in the Yamalo-Nenets Autonomous Area) and other gas fields without a tender. A tandem of the companies competing for the right to do business in the region seems very questionable.
Vremya Novostei
Russian, French, U.S. firms invited to build a nuclear plant in Belarus
Belarus has invited three foreign companies to bid to build a nuclear plant which will meet about a quarter of the country's electricity needs. Experts believe the financial factor will be crucial in awarding the contract.
Minsk expects the would-be participants in the tender - Russia's Atomstroyexport, the French Areva and the American-Japanese Westinghouse-Toshiba - to respond within a month. Belarus plans to launch the first unit in 2016 and the second in 2018. The 2000-megawatt nuclear plant will cost an estimated $4 billion.
The company that wins the tender will deliver turnkey reactors. The general contractor will be liable for "the entire complement of equipment, fine-tuning, start-up, safety and performance characteristics," says Alexandr Mikhalevich of the Belarusian Academy of Sciences. Piecemeal purchase of equipment is undesirable because Belarus has no experience in building nuclear power plants.
"Belarus does not have sufficient financial resources to build nuclear power plants. So, credit will have to be obtained which will have to be repaid in cash or under some barter arrangement," deputy head of the Belarusian Privatization and Management Institute Research Center Irina Tochitskaya told Vremya novostei. If Atomstroyexport wins the tender, Belarus, in keeping with international practice, will get a project-tied credit from Russia with which Belarus has been able to reach debt rescheduling agreements several times before.
Experts believe that this may be the decisive factor for the tender. To pay back the loan independently Belarus will need to earn a lot of money by selling electricity. But Ukraine and Russia are self-sufficient in power and the Baltic countries are set to launch their own nuclear energy project.
"If Atomstroyexport wins the contract, if Russia issues credit to finance the construction of the nuclear plant and provides it with nuclear fuel then we can hardly talk about diversification of energy sources and the country's energy independence," Ms Tochitskaya noted.
Vedomosti
Gas prices will not be liberalized in Russia until 2015
The profitability of gas sales in Russia will equal that of export supplies only in 2014-2015, said Andrei Klepach, deputy economic development minister, on Tuesday. The goal of achieving equal profitability under Gazprom's long-term contracts remains in place, the deputy minister added.
Back in November 2006, the government decided that gas sales on the domestic and foreign markets should have equal profitability in 2011. In the same year, the government endorsed the accelerated indexation of prices for 2008-2010 (by 20%-27% a year). Klepach said nothing about a further rise in gas prices in 2012-2015 and later.
A Gazprom spokesman refused to comment. The delay in the transfer to equal profitability has not been finally approved, a Novatek spokesman said. If it is approved, this may lead to a fall in investments in gas exploration and production. Besides, another question arises in this connection - that of the same respite in tax rises (a rise in the subsoil tax on gas production has been delayed until 2010).
In 2006, the government decided that since 2011 gas prices will be set in keeping with the formula of the Federal Tariff Service (FTS): Gazprom's average price under EU contracts minus 30% of customs duty payments and the difference in transportation costs.
Formally, state regulation of gas prices has not been abolished, but the market has called this measure "liberalization." Like in Europe, gas prices would have been tied to price quotes of exchange-traded products - fuel oil, diesel, etc. (there is such a tie-in in Gazprom's European contracts).
Gazprom began to sign long-term contracts under the new price formula and increased its investment plan manifold (nearly to 1 trillion rubles or $42.46 billion) by 2010.
This spring, government officials thought better of it: the thing is that in November 2006 oil cost about $58 per barrel, and now the price of Brent oil on the spot market is nearly $128. The government has decided that in 2011 gas prices must rise at least by 40%.
It is obvious that with such indexation there cannot be any talk of equal profitability of gas sales in Russia and Europe, says Valery Nesterov of Troika Dialog.
This March, the Economics Ministry estimated that under the FTS formula, gas prices in Russia would have risen nearly threefold from the current price by 2011 (from 1,752.7 rubles per 1,000 cubic meters to 5,225.7 rubles on average). By 2010, the prices would have risen by 95%.
This is why Economics Minister Elvira Nabiullina initiated the delay in gas price liberalization. The new [gas] prices would cause a price shock in the Russian economy, she said.
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