RBC Daily
Energy ministry urges oil companies to upgrade refineries
Russia's Energy Ministry has proposed setting legal requirements for refining depth (the difference between crude input and marketable products output) of at least 89 percent. Currently most refineries' figures are less than 72 percent. The new bill aimed at regulating the oil industry will give oil companies five years to modernize their processing facilities. Under the previous version of the energy strategy, oil companies are given until 2030.
The only clause in the draft law on oil production, processing and pipeline transportation that contains specific quantitative requirements rather than general recommendations is the one on oil refining. "The country's oil refineries should apply processing technology to improve the quality of the petroleum fractions produced and increase refining depth to at least 89 percent," the clause reads.
The bill further explains that the proportion of marketable oil products should increase gradually, to at least 83 percent by January 1, 2013 and to at least 87 percent by January 2015. The Ministry also proposed stipulating the preferences to be granted to any companies that exceed these targets.
Prime Minister Vladimir Putin told a conference last year that the average refining depth is 95.5 percent in the United States, 85-90 percent in Western Europe and 85 percent in China, whereas Russian refineries have a ceiling of 72 percent. The need to increase refining depth has been discussed before. The government's Energy Strategy until 2020 set a goal of reaching a level of 80-85 percent by 2020. A tentative strategy until 2030, adopted last November, slightly postponed this deadline, allowing Russian oil companies another 15 years in which they must increase their output of marketable products to 89 percent of crude input.
Nearly all Russia's oil majors have already realized they need to modernize their refining facilities. Bashneft, based in the Volga republic of Bashkortostan, is currently taking the lead. LUKoil and Gazprom Neft declined yesterday to comment on what plans they have to upgrade their plants, while Rosneft, currently lagging behind its rivals, said it plans to increase refining depth across all its facilities to 95 percent between 2012 and 2015.
Oil producers should be as interested in upgrading their refining facilities as the government, said Vadim Mitroshin, an analyst at the Otkritie investment bank. "Profit margins in the refining business have been rivaling oil export margins for the past few years," he said. Only small refineries are expected to suffer under this law, as they are unlikely to be in a position to meet the required quality standards of refining and will be forced out of the market.
Nezavisimaya Gazeta
Higher education: Russians' only hope for a secure future
Most Russians are against a policy of limited access to higher education, on which officials and employers are insisting, say the results of public opinion polls published on Tuesday. The Russian Union of Industrialists and Entrepreneurs (RSPP) is nevertheless, in favor of eliminating the bias towards higher education at the expense of secondary technical or vocational education. The Ministry of Science and Education and even President Dmitry Medvedev share a similar view. They want to close "surplus" colleges and universities. But for many Russians, higher education is the only hope for a better life.
On Tuesday, a research center at the SuperJob.ru recruiting portal published findings of a new poll to sound public sentiment toward higher education reform. Interviews with approximately 3,000 respondents showed a definite negative attitude toward the idea of officialdom and business, which propose to limit access to higher education and encourage young people to fill labor and vocational vacancies. Most of the respondents (60 percent) demonstrated a clear negative view of this idea, because such a move in effect abolishes the constitutional right to education.
The poll also shows that Russians are not prepared to pay as much for higher education as students in the United States. In the U.S., university tuition fees sometimes run to tens of thousands of dollars a year, which is beyond the financial resources of Russians. Half the respondents said they were ready to pay only 50,000 rubles a year for high-quality university instruction.
Denis Volkov, of the Levada public opinion center, believes that the attractiveness of an occupation depends directly on its profitability. Labor specialties are not listed as good earners. Here, in Volkov's view, the gist of the matter is that over half of all Russians are not well off, to put it mildly. Financial stability is a big issue with them, and education is seen as a necessary and sometimes the only condition for a family's future wellbeing. Furthermore, the expert says, people are sometimes more about getting their diploma certificates than the actual quality of the education. It is a diploma that opens doors to jobs with an acceptable and steady salary.
The Public Opinion Foundation has found that 63 percent of respondents aged 16 to 25 believe they must obtain a higher education to achieve their life's ambition.
The Ministry of Education declined to comment on the findings, which do not entirely agree with a policy of cutting universities and institutes in favor of technical and vocational schools.
Vzglyad
Former Moscow Mayor hopes for further career in public politics
Former Moscow Mayor Yury Luzhkov, who was fired by the president on Tuesday, is now hoping to go into public politics, one of his associates, Oleg Mitvol, said. Analysts do not rule out that he could rally supporters before the 2012 election; however, there is not much time left for a proper campaign, so Luzhkov may be going the same way as unsuccessful presidential candidate Mikhail Kasyanov.
Despite his high-profile dismissal from the post of Moscow mayor, Luzhkov, 74, is not planning to retire or leave the country and instead plans to continue playing an active role in politics, Head of Moscow's Northern administrative district Oleg Mitvol said.
Luzhkov's billionaire wife, Yelena Baturina, earlier mentioned the possibility of him even joining the opposition. She confirmed in an interview with New Times, a magazine supporting independent opposition groups, that neither of them would leave the country.
An hour after his resignation as Moscow mayor, Luzhkov announced he was also quitting the pro-Kremlin United Russia party. Member of Parliament Andrei Makarov said that Luzhkov's haste to leave the party suggested he only saw the party as a vehicle to help him achieve his personal ambitions.
As for which opposition group the former mayor will join, that remains an open question. Yevgeny Minchenko, Director of the International Institute of Political Analysis, said he is most likely to join a small party such as Yabloko or the Patriots.
Alexei Mukhin, head of the think tank, the Center for Political Information, warned that Luzhkov might face serious problems in any future political career. Unlike 1999, there is no pronounced protest sentiment in today's Russia, which could explain why Luzhkov was so reluctant to resign. According to Mukhin, Luzhkov does not have enough time to establish and promote his own party before the next federal parliamentary elections in 2011, while by the time the next election cycle comes around, five years later, Luzhkov's party "will be of no interest to anyone."
Kommersant
The success and prospects of Yelena Baturina
Yelena Baturina, the wife of former Moscow Mayor Yury Luzhkov, owns a 99 percent stake in the construction company Inteco and has a $2.9 billion fortune. She has always claimed that her business empire was the result of her ambition and aptitude, rather than a marriage of convenience with Luzhkov.
However, many developers do not believe that Baturina's business will survive very long after Luzhkov's dismissal, and expect the sale of Inteco's Moscow assets. Bank analysts also predict that real-estate prices in the Russian capital will be reduced.
Inteco was established in 1991, that is, after Baturina married Luzhkov. Baturina and her brother Viktor ran the company, initially manufacturing plastics. But the current plastics market's annual volume is estimated at just $50-60 million.
In 2001, Baturina invested in real estate for the first time, buying the Moscow-based DSK-3 prefabricated building producers. The details of that deal were never disclosed. Plastics output gradually declined, accounting for just over 10 percent of Inteco's 2007 revenue.
In 2005, an expanding Inteco sold stakes in seven previously purchased cement plants to Eurocement AG Holding (Switzerland), a group of companies owned by Russian businessman Filaret Galchev, for an estimated $800 million.
Inteco subsequently started investing in cement production again but focused on housing and commercial real-estate construction. Its current development portfolio totals over six million square meters. The company also owns 400 hectares of land.
Corporate proceeds are expected to reach 25-30 billion rubles ($817-980 million) in 2010. Now she owns a 99 percent stake in Inteco. Forbes Magazine estimates the value of Baturina's assets at $2.9 billion and lists her among the world's three wealthiest business women.
Alexei Shepel, CEO of S.Holding developer, said the new mayor should conduct an inventory of all government resolutions granting construction sites to Inteco and its subsidiaries. "I assume numerous violations would be exposed," Shepel said.
"Luzhkov did not quit of his own accord. This means that no agreements were reached with Russian leaders, and that no protection is available," a source told the paper.
"Inspections of companies close to the ex-mayor and his team will probably be organized. The prosecutor-general's office will look for violations. This procedure is typical of any reshuffle because the new team does not want to assume responsibility for the old team's liabilities," said Vladimir Voronin, CEO of the financial construction company, Leader.
Probusiness Development CEO Dmitry Kovalchuk said this would serve as a negative signal for other investors to curtail business operations in Moscow, if Inteco assets were seized by court order, and that this would hardly benefit the new mayor.
Izvestia
Iran may sue Russia for refusal to deliver air defense systems
Russia will not deliver the S-300 air defense systems to Iran due to force majeure circumstances, Russian Foreign Minister Sergei Lavrov said, commenting on the rumor that Iran might sue Russia for its failure to fulfill the contract.
The problem could get to court; if Russia refuses to make the deliveries agreed in the contract, it will have to pay damages, said Alaeddin Boroujerdi, the head of the Iranian parliament's national security and foreign policy commission.
Last week Russian President Dmitry Medvedev signed a decree on measures to implement the UN Security Council's June resolution, introducing harsher sanctions against Iran. The decree prohibits the delivery of the S-300 systems, armored vehicles, combat aircraft and helicopters and warships to Iran.
Lavrov said that Russia must fulfill its international obligations. He also told journalists he was not aware of Boroujerdi's statement. "I only know that such deliveries are prohibited by the UN Security Council's resolution, which brings force majeure circumstances into play."
Theoretically, Iran could demand that Russia pays damages, but force majeure circumstances clear it of material obligations for any failure to honor the contract. Anyway, such deliberations are irrelevant because Iran has not yet filed a lawsuit or made an official statement on this issue.
Igor Korotchenko, head of Center for Analysis of Global Arms Trade, said such statements could be designed to probe Russia's reaction. The issue about the possibility of filing a lawsuit by Iran was raised by a parliamentarian. Besides, Boroujerdi is not a sufficiently highly placed official to take such a decision, and Iran's cooperation with Russia is not limited to military supplies.
Such contracts usually involve damages worth between 5 to 10 percent of the value of the contract, which in this case would amount to $80 million. This is not a crippling sum for Russia and from Iran's perspective it's not worth risking confrontation with Russia over.
The contract could have been signed in the early 2000s and implemented before Iran's nuclear project became an international problem, but Iran stalled for time trying to get better conditions, Korotchenko said.
Iran is likely to assume a wait-and-see stance; a quarrel with Russia is certainly not in its interests, especially since it has so few other allies.
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MOSCOW, September 29 (RIA Novosti)
