MOSCOW, October 8 (RIA Novosti)
Russian elite takes oath of allegiance to Putin / Russia's oil and gas majors ask government for bailout / Russia offers West helping hand / Renault Chief Designer moves to Russia / TNK-BP may lose its Kovykta license / Russia will see new crime surge - analysts /
Gazeta.ru
Russian elite takes oath of allegiance to Putin
The decision of the Chechen authorities to rename Victory Prospekt in Grozny, which commemorated victory in WWII, Putin Prospekt has become an event of federal significance.
It amounts to recognition of Putin's importance amidst debates about the lineup of forces in the ruling tandem of President Dmitry Medvedev and Prime Minister Vladimir Putin. It is also evidence of complications in relations between the two leaders, and of the Russian elite's choice in favor of the prime minister.
Chechen President Ramzan Kadyrov was among those who encouraged Putin to agree to stand for a third term. It was an expression of Kadyrov's personal attitude and also the attitude of a large elite group in many Russian regions. That group did not get what it wanted then only because Putin was against it.
Renaming an avenue in Grozny was not an act of servility, but an oath of allegiance to Putin taken by part of the Russian political elite, including Kadyrov.
President Medvedev himself started the process when he said in reply to Putin's proposal that more of works of diseased dissident writer Alexander Solzhenitsyn be studied at school, "I think we should also have a street named after him."
The political elite eagerly took up Medvedev's proposal to bring street and city naming into the political sphere.
This is a war of gestures and also an exchange of coded messages between the two camps and between them and society. Unlike in 2006 or 2007, Putin can now be elected president, for one or even two terms.
According to the latest survey by the Levada pollster, Putin would get 58% and Medvedev 28% of the vote at any future elections.
Although his was a specific management style, President Putin has always kept within the boundaries of civilized behavior and has never indicated that he wanted more fame and recognition in the form of medals, monuments, and streets named after him. In fact, he seemed to dislike excessive praise.
He broke out of these confines when an avenue in Grozny was renamed in his honor. Will Prime Minister Putin find a pretext and a way to dissociate himself from that event? Maybe he will even ensure that Victory Prospekt regains its name?
Kommersant
Russia's oil and gas majors ask government for bailout
Russia's four major oil and gas companies have for the first time acknowledged they are experiencing serious problems due to the financial crisis. Gazprom, LUKoil, Rosneft and TNK-BP have all applied to Prime Minister Vladimir Putin for assistance. They said they need money to pay off loans taken from Western banks and finance production to avoid a fall in output.
The companies, which account for 70% of oil and 91% of gas output in Russia, set forth their plea in a letter of September 24. They wrote to say that the total debt of the Russian fuel and energy sector to Western banks totals about $80 billion. But the money is needed not only to pay lenders. The oil and gas producers have also asked Putin to "instruct the Finance Ministry and the Central Bank to devise a way of financing strategic projects." This, they say, could be done only "with purpose loans from the state collaterized by debt and derivative securities." The companies named no specific sums they hope to receive.
The presence of Gazprom among the signatories is surprising. Its CEO Alexei Miller, one day before the letter was handed in, on September 23, said the financial crisis had not affected his holding. Gazprom, he said, was as large as it was before the crisis. Yesterday the monopoly assured it was asking for money just in case: "With a crisis mounting on the world financial markets, Gazprom, its shareholders and investors want to have a lending mechanism at hand to meet force majeure circumstances."
Denis Borisov from Solid brokerage said the operating cash flows of oil companies "are absorbed by capital investments the companies need to make to maintain production." The required amount of cash can be secured only if the oil price is no less than $100 per barrel, he said. As a result, nothing is left to refinance debt - the companies have planned to repay it with new loans. But to borrow money on the market is now practically impossible, analysts say. "On external markets, most traditional investors have closed all limits on Russia," said Yevgeny Retyunsky, an adviser to the board chairman of Expobank (a Russian subsidiary of Britain's Barclays Bank). The Russian banks, too, begrudge the money. According to Oleg Gordienko, head of the bond issue department at Raiffeisenbank, the domestic public debt market is closed "to the end of the year at the least."
RBC Daily, Gazeta.ru, Kommersant
Russia offers West helping hand
For the first time in modern history, Russia can provide direct financial assistance to a Western state - and one that, moreover, is a member of NATO. The country is Iceland, which has failed to get help from the European Union.
Iceland, whose national budget is only 10 billion euros, is negotiating a 4 billion euro ($5.4 billion) loan from Russia "to shore up the nation's finances amid a full-blown financial crisis." Analysts say this is an image-building deal whose political dividends will be much higher than the potential financial risks.
Russia has been trying to convince the West that it is ready for dialogue and that the West need not fear it and its financial expansion.
A loan of 4 billion euros is less than 1% of Russia's international reserves. But it can earn Russia considerable political dividends.
After the conflict in the Caucasus, Russia has been showing a readiness for close cooperation with the West. The situation is not unlike the beginning of the failed Russian-U.S. romance after the September 11, 2001 terrorist attacks.
Iceland's financial sector has been gravely ill for a long time. Its banks developed their business on money borrowed abroad, and proved unable to repay their debts when the global financial crisis hit them.
On October 7, when the Icelandic currency fell by 30% against the euro and then rose by 20%, Iceland's Central Bank set a target price for the national currency at 131 kroner per 1 euro.
Some people in Iceland had earlier proposed giving up the krona in favor of the euro, but the EU said it was out of the question because Iceland was not a member of the Union. The EU recently refused to bail out Iceland, which therefore had to look for new friends.
Russia has discussed and approved a decision to provide a loan to it quickly and at the top political level.
Yevgeny Nadorshin, chief economist at Moscow's Trust Investment Bank, said Russia has decided to make a friend in the West who would be very grateful to it in future.
"We are a lifeline for Iceland," he said. "Moreover, redirecting 4 billion euros from U.S. state bonds to Iceland can be described as risk diversification."
Political analyst Yuri Shevtsov said: "It is important to have close relations with Iceland, above all for establishing control over the Arctic, which cannot be done without Iceland. Russia will not have a military base in Iceland, but the presence of Russian bankers, investors or businesses there is definitely a positive factor. Although a small country, Iceland is located in a strategic part of the world."
Russian-Icelandic economic relations are limited to bilateral trade, which is less than $100 million a year, and the Russian-Icelandic Institute of Renewable Energy (RIIRE).
Russian billionaire Roman Abramovich, a former governor of the Chukotka who has been to Iceland several times, and companies of Oleg Deripaska, the owner and CEO of diversified investment holding Basic Element, unofficially expressed their interest in investing in Iceland.
Gazeta.ru
Renault Chief Designer moves to Russia
The chief designer for Renault, Anthony Grade, a Briton, is taking over a similar post at Russia's biggest carmaker, AvtoVAZ, to design its next generation of Lada cars. Grade, 51, who has been Renault's vice president of exterior design for 20 years, says he will have to start from scratch.
The decision to transfer Grade was made by Renault top managers - the French company is a major shareholder and key partner of AvtoVAZ.
According to Grade, he is inspired by the opportunity to gather a new team to take it to world standards. To design the exterior of Lada cars' next generation, Grade intends to involve young Russian designers. The new lineup models are expected to be released in about three years, specialists say.
Grade's move to AvtoVAZ might give another chance to the company, which is going through a low point, specialists believe. "Things couldn't get any worse than they are now," Svyatoslav Saakyan, car design expert and art director at the Slava'Saakyan studio, said. "Grade's arrival is an opportunity to gain a lot of new experience. Such top level specialists rarely do designs themselves - as experienced executives, they set the task for the team of designers and get the end result," he said.
According to Saakyan, the fact that models manufactured by AvtoVAZ often have an unappealing and unprofessional design is not linked to designer's poor work but to the company management's mistakes. "If AvtoVAZ officials do not interfere with Grade's work, he will improve the company's situation," Saakyan said.
Yet, together with obtaining foreign experience, the company may adopt the French partner's "bad habits" as well. According to specialists at the Renault design bureau, the company puts all its effort into developing car concept designs, which turn out to be bright and attractive, but pays little attention to the models that later make the lineup. "As a result, lineups include many unskillfully designed cars, such as Renault Logan," Saakyan said.
RBC Daily
TNK-BP may lose its Kovykta license
Russian-British venture TNK-BP should speed up the sale of a majority stake in Rusia Petroleum (62.9%), which holds the development license for the Kovykta gas condensate deposit in East Siberia, to Gazprom Neft, the oil arm of Gazprom.
According to sources in environmental safety regulator Rosprirodnadzor and the Natural Resources Ministry, an extraordinary inspection of compliance with license terms will begin at Kovykta on October 15.
Kovykta, located in the Irkutsk Region in East Siberia, is one of the world's largest gas condensate deposits with recoverable gas reserves exceeding 2 trillion cu m (70.6 trillion cu f).
The regulators claim TNK-BP is violating production conditions in terms of volume. If the two companies fail to agree the deal, TNK-BP may lose the Kovykta license, which will be transferred to the fund of undistributed deposits.
TNK-BP has declined to comment on that information, saying only that its negotiations with Gazprom were under way.
Gazprom spokesman Sergey Kupriyanov said the energy giant was not nervous. "We may close or not close the deal," he said.
Off record, sources in Gazprom say the company is busy developing the Chayanda field in Yakutia in northeast Russia, and would not even flinch if the Kovykta deposit were put in the reserve fund.
A Gazprom manager said Kovykta is above all a helium, not a gas, deposit, adding that the state would not tolerate the squandering of helium during gas production at the field. Gazprom will be unable to market Kovykta helium in the near future, and so thinks the deposit should be left to future generations.
A source at TNK-BP said the inspection was a formality because the agency on subsoil use, Rosnedra, can revoke licenses without inspections if the authorities tell it to.
Another source in the Russian-British company said the Russian government would not revoke the Kovykta license amidst the financial crisis so as not to frighten off cautious British investors.
He said BP would not be satisfied with the repayment of its spending on the project, because it still wants to develop strategic partnership with Gazprom in the form of a joint venture, with the subsequent buyback of the 25% plus one share in the Kovykta project.
It was announced in late September after a visit by South Korean President Lee Myung-bak that South Korean companies might be allowed to take part in the Kovykta project.
Vitaly Kryukov, an analyst at the Kapital investment group, said the revocation of the Kovykta license from TNK-BP depended on how soon the seller and the buyer coordinate the deal.
He said the stake could be sold for $700-$900 million now, but doubts the government would revoke the license from TNK-BP in order to turn it over to Korean investors.
Novye Izvestia
Russia will see new crime surge - analysts
Criminals sentenced to long prison terms for robberies and murders in the 1990s, have been leaving Russia's prisons. Experts believe that most of the former inmates who spent 10-15 years in prison will not be able to integrate into society. Human rights defenders say that the return of former prisoners will cause a new surge in crime, because the state does not have prisoner rehabilitation and employment programs.
In the Sverdlovsk Region, 14,000 criminals will leave prison by the end of this year. In 2007 and 2006 the number was only 8,000. And even then employment services could not cope with a flow of people who needed jobs. "Our region is not prepared to deal with such a big inflow of former criminals", Viktor Vakhrushev, press secretary of the human rights commissioner to the Sverdlovsk Region, said. "These people do not have anything: they do not have accommodation, no jobs. Who will hire a former prisoner who only can sew work clothes? I think we could see a surge in crime."
According to the Russian Interior Ministry, only one of five former prisoners can find a job. Many of them have no documents, because inquiry bodies and courts often lose criminals' internal passports. Therefore, former prisoners have no choice but to commit another crime. According to statistics, 60% of former prisoners become second offenders. "They do not have support in the outer world and try to get into prison again, because it is the environment they got accustomed to" - forensic psychiatrist Mikhail Vinogradov, head of the Center for Legal and Psychological Assistance in Emergency Situations, said. "I do not doubt that soon, when the criminals who were jailed in 1990s, are released, we will witness a new surge in crime."
Russian still does not have state services providing rehabilitation programs, which could encourage former prisoners and help them to find a job. There is one organization of this kind, Potapenko's Bureau in Yekaterinburg, which was established not by the state, but by a former criminal, - Lev Ponomaryov, leader of the For Human Rights movement, said.
"I spent several years in prison, and now I am, in fact, a person of no fixed abode" - Yury Potapenko, founder of the service, told Novye Izvestia. "I know how a former prisoner feels when he leaves prison and does not have anything. We help such people, provide them with temporary accommodation and jobs in construction, and help them solve internal passport problems."
RIA Novosti is not responsible for the content of outside sources.
