Russian Press - Behind the Headlines, January 10

© Alex StefflerRussian Press - Behind the Headlines, January 10
Russian Press - Behind the Headlines, January 10 - Sputnik International
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Kudrin hopes new parliament will not last two years / Russia creates strategic petroleum reserve

Moskovsky Komsomolets

Kudrin hopes new parliament will not last two years

Former finance minister Alexei Kudrin, one of the symbols of “Putin’s 2000s,” has swapped his state official guise for that of a near-opposition figure, pushing for a repeat parliament vote in an online address.

Kudrin, who was dismissed from his post last year after a spat with the president, proposed an agenda for dialogue between the government and society on the new State Duma’s options but no legal way to implement it.

Some protesters refuse to negotiate with the government, demanding an end to Putin’s 12-year rule, Kudrin writes in his blog. However, he suggests opening dialogue, focusing on holding a repeat ballot under revised and fairer electoral rules in one or two years. He emphasizes fairness rather than legitimacy, explaining that the latter is a legal notion that can only be discussed in court.

He also calls for adopting laws on political reform that the government has promised to draft. Two bills have been brought before parliament aimed at liberalizing registration for political parties and canceling the requirement for non-parliamentary parties to collect voter signatures. Two more important bills, changing electoral rules for the parliament and regional governors (currently appointed by the president) are to be drafted by February 15. A broad discussion of the bills will certainly extend the new Duma’s life span and there aren’t many legitimate ways to get rid of it anyhow.

The constitution authorizes the president to dissolve the parliament for two reasons: if the lawmakers decline three prime minister nominations, or if they pass a no confidence motion to the cabinet. Suppose the newly elected president, Vladimir Putin, nominates Dmitry Medvedev for prime minister. If the parliamentary majority, the United Russia party, votes down a candidate who topped its election ticket, the party would lose its chance of running in an early election. Hypothetically, 15 of them could secretly join the minority in a vote. But this is unlikely to happen without a prior agreement with the Kremlin. The system of decision-making in the “power vertical” is still strong enough.

A no-confidence vote scenario seems just as clumsy and unlikely.

The actively debated possibility of lawmakers giving up their seats voluntarily would lead nowhere because, according to the law, any returned mandate goes to the next candidate on the party list. And the lower house remains legitimate as long as at least two political parties are represented on it supported by at least 60 percent of voters.

The only option left is one that Kudrin does not discuss in his address; invalidating the December 4 results in court proving election fraud such as party leaders bribing voters. Lawmaker Vadim Solovyov, chief lawyer of the Communist Party, said the party plans to apply to the Supreme Court in February or March. But one can predict with high probability that nationwide election results can only be contested if the government wants them to be, which it doesn’t.

Izvestia

Russia creates strategic petroleum reserve

Russia’s Energy Ministry may store 15 million metric tons (110 million barrels) of oil for a rainy day. Experts say it will be a highly liquid reserve similar to international reserves.

The Moscow Institute for Energy and Finance (IEF) has won the tender for the creation of a strategic petroleum reserve (SPR), announced the Energy Ministry in August 2011.

The SPR cannot effectively influence the domestic market because oil prices are determined outside Russia. Hence its main goal will be to influence oil exports, gaining profits from price fluctuations, IEF Director Vladimir Feigin said.

“By selling oil at peak prices, we will boost profits and simultaneously reduce prices,” Feigin said, adding that this calls for creating the reserve beforehand because periods of low and high prices last several months.

“We suggest storing oil in exhausted salt mines, with separate tanks for our basic oil brands (Urals, ESPO and Siberian Light – Izvestia),” said Vladimir Revenkov, a department head at the IEF.

The International Energy Agency (IEA) decided in 2001 that all its 28 members (excluding net exporters) must each have enough spare oil to last 90 days without imports. Norway, which is a net exporter, maintains a 20-day oil reserve.

The U.S. SPR (over 100 million tons or 735 million bbl) is stored in several salt domes at $2 per ton annually. Hence, Russia will spend about $30 million on its 15-million ton SPR, to be covered by revenues from the reserve’s active management.

“It could be done by a special agency that may be partially commercial. We believe it would be expedient to combine budgetary and non-budgetary funding,” Vladimir Feigin said.

Experts agree that Russia needs an SPR and that it does not have to be self-financing.

“Refineries only keep enough oil for 2 or 3 days of operation. It is technologically simpler to recover oil from a salt dome than from a temporarily abandoned well,” said Mikhail Silin, first deputy provost for strategic development at the Gubkin University of Oil and Gas. “The reserve’s profitability can be zero or even slightly negative, because its main goal is to ensure economic security. Like international reserves, it will be a highly liquid part of our wealth.”

A 15-million ton SPR will equal 3 percent of the 511 million tons of oil produced in Russia in 2011 and less than 6 percent of all oil processed in the country.
Transneft currently has about 25 million tons of buffer oil in its pipelines, which are vital for their operation, and another 4-5 million tons in its storage facilities. In December 2011, Russian refineries processed 22 million tons of oil, which means that Transneft’s reserves will suffice for a week of refining.

Last year the government started creating a commercial reserve of petrochemicals and plans to buy 2 million tons of diesel fuel for it. In case of shortages on the retail market of petrochemicals, state-run company Rosneftegaz will be authorized by a government commission to fill the gap.

RIA Novosti is not responsible for the content of outside sources.

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