MOSCOW, June 4 (RIA Novosti)
President dismisses anti-NATO chief of staff / Russia expands its partner base in Latin America but keeps priorities / Gazprom's cooperation with Iran gives it access to Nabucco / Japan wants to have guaranteed long-term Russian fuel supplies / Magna signs agreement to assemble Chrysler cars in Russia / Gazprom's takeover ends in scandal /
Izvestia, Vedomosti, Moskovsky Komsomolets
President dismisses anti-NATO chief of staff
The appointment of Nikolai Makarov as Russia's chief of the General Staff has ended the confrontation between Defense Minister Anatoly Serdyukov and Yury Baluyevsky. Serdyukov now has a free hand and no serious opponents in the ministry.
Vadim Kozyulin, a professor at the Academy of Military Sciences, said: "Yury Baluyevsky has lately been making rather sharp statements, which befits a politician but not the chief of staff. He was too direct and emotional when putting forth our stance regarding relations with NATO and the deployment of the U.S. ballistic missile defense system in Europe."
Igor Korotchenko, a member of the Defense Ministry's Public Council, said: "Makarov is a good choice. He has worked with the defense minister for a long time, and so new conflicts in the ministry are unlikely."
There were many reasons for conflicts between Baluyevsky and Serdyukov, from the minister's decision to sell the ministry's property in major Russian cities to the removal of the Peter the Great Academy of the Strategic Missile Force from Moscow.
Baluyevsky made shocking statements about targeting Russian missiles at the U.S. missile defense facilities currently under construction in the Czech Republic and Poland. He also mentioned possible pre-emptive strikes against countries threatening the security of Russia and its allies. Therefore, his replacement with Makarov could be a telltale signal for the West, the popular daily Vedomosti writes.
According to Moskovsky Komsomolets, the country's new leadership could be considering turning the General Staff into a technical agency like the U.S. Joint Chiefs, to plan military operations and coordinate security-related agencies. In this event, the foreign policy functions of the General Staff will be moved to Russia's Foreign Ministry and Security Council.
Yury Baluyevsky has been appointed deputy secretary of Russia's Security Council.
Kommersant
Russia expands its partner base in Latin America but keeps priorities
Colombia's vice president Francisco Santos Calderon has arrived in Moscow. Today he will meet with Foreign Minister Sergei Lavrov and at the weekend, with President Dmitry Medvedev.
The talks with the Colombian vice president could spell some change of policy under the new Russian president - Vladimir Putin never talked with the Colombian authorities, opting for their opponent, Venezuelan leader Hugo Chavez. However, Prime Minister Putin does not seem to be eager to meet Francisco Santos - he will concern himself with the Venezuelan sector in Russian politics, as before.
It is simple to accuse Moscow of being cynical: the money it gets from Venezuela is too little, it might say, so it could want more from Colombia and let them fight, creating demand for munitions. And in general, it must show to the Americans that if they put their nose in its affairs (concerning Ukraine and Georgia), Moscow will put its into theirs. Perhaps that may happen so. But there is another option.
Arms supplies to two conflicting sides are a delicate and not necessarily destructive instrument. Cases are on record when great powers (also doubling as major weapons exporters) used arms to cool hot heads. Examples are large-scale U.S. military cooperation with Egypt following Camp David and Soviet assistance both to northern and southern Yemen in the 1980s. Arms supplies are not only commerce, they also are a way of gaining leverage over the buyer. And, most important of all, they lay the fear of the neighbor at rest: it is a tit-for-tat business.
Cooperation with Colombia has some other attractive features: oil and railroads. If we add day-to-day ties with a moderately right and pro-American regime to the doubtful cooperation with Venezuela, and help lower tensions between these two, Russia's prestige in Latin America will only grow.
Certainly, Latin American leaders will not escape the temptation of playing the "Russia card" in realigning their relations with the United States - let the State Department feel nervous for a bit. In Russia, some may imagine this is a new opportunity to get into the U.S. "soft underbelly" and beat Washington on its own field. Only nothing of the sort will ever occur now: the time of Che Guevaras is gone never to return to Latin America. Even Chavez looks like an exception confirming the rule.
Gazeta
Gazprom's cooperation with Iran gives it access to Nabucco
The Iranian authorities announced yesterday their decision to join the Nabucco pipeline project.
The project is intended to pump 20-30 billion cubic meters of natural gas annually from Central Asia under the Caspian Sea, then through Azerbaijan, Turkey, Bulgaria, Romania, Hungary and Austria.
However, many Russian-Iranian agreements allow Russian energy giant Gazprom to join the European project, which is aimed at lowering Europe's dependence on Russian energy supplies.
Conflicts between Iran and Russia are unlikely, as evidenced by a recent economic rapprochement between the two countries.
Gazprom is speedily drafting an agreement on the establishment of one or several joint ventures with Iran's state companies. It is to be signed with Iran's Oil Ministry in Teheran early next week.
According to the Iranian media, Gazprom will participate in the development of several phases of the South and North Pars gas deposits and the Kish gas deposit, with reserves of more than 1 trillion cubic meters (35.3 trillion cubic feet).
Gazprom also plans to build a gas storage facility in Iran and an oil refinery with a capacity of 7 million tons (51.45 million bbl) on Iran's border with Armenia.
The implementation of these agreements will allow Gazprom to join the Nabucco project.
In January, the Russian gas monopoly signed an agreement with Austria's OMV to buy a 50% stake in the Central European Gas Hub (CEGH) in Baumgarten, Austria, a key element of the Nabucco project.
The CEGH was established as a logistics and commercial trading platform by OMV and has a capacity of 1.3 billion cubic meters (45.89 billion cu f) per month.
The agreement allows Gazprom to influence gas distribution from the Nabucco pipeline.
In other words, Iran joining the project has not weakened, but, quite the opposite, will strengthen the global powers' struggle for export transportation routes.
Gazeta.ru
Japan wants to have guaranteed long-term Russian fuel supplies
Japanese banks are ready to finance 25% of the Sakhalin-II project, worth a total of about $20 billion. Japan may give Russian companies access to its end consumers.
According to Nikkei's reports, an agreement on the project's financing may be signed with Sakhalin Energy, the operator of the project, in mid-June. Japan Bank for International Cooperation (JBIC) is ready to allocate about $3.7 billion for the project. Besides, a consortium of the four private banks, i.e., Japan's Mitsubishi UFJ, Mizuho Corporate Ltd. and Sumitomo Mitsui Banking Corp., and also the French bank BNP Paribas, will provide another $1.6 billion for this purpose.
Japan regards the Sakhalin-II project as a major energy source for ensuring its national energy security. The main production facilities for the project are to be built by the end of this year. LNG supplies have been largely reserved by Japanese energy companies on the basis of long-term contracts.
In late 2006, Japan Pipeline Development Organization (JPDO) held negotiations with Russian gas giant Gazprom on the construction of a pipeline from Sakhalin to Hokkaido. As an additional bonus, JPDO offered Gazprom the opportunity to jointly sell gas on the Japanese domestic market.
"In the near future, the markets of the Asia-Pacific countries will become a priority for Gazprom. However, today, even considering that the Russian company will soon start developing new fields in Eastern Siberia and the Far East, it will not be able to satisfy all the requirements of the Asia-Pacific countries," says Alexander Shtok, director of the Due Diligence division at the 2K Audit-Business Consulting company.
According to Shtok, by granting a large loan for the development of the Sakhalin-II project, Japan hopes to get additional guarantees of fuel supplies.
Alexei Logvin, an expert at RusCapital, thinks that the loan will be granted on easy terms against the security of oil and gas supplies.
Japan is also interested in participating in projects to develop East Siberian fields. Japan Oil, Gas and Metals National Corporation (JOGMEC) has already sent its proposals to Russian state-controlled oil major Rosneft expressing its wish to develop fields with extractable oil reserves of no less than 100 million barrels located not too far from the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline route.
According to Hironori Wasada, JOGMEC's vice president, a $5 million government [credit] line has already been opened for geological exploration work.
Kommersant
Magna signs agreement to assemble Chrysler cars in Russia
Russia's Ministry for Economic Development will sign an agreement with Canadian auto parts giant Magna this week to launch the mass production of Chrysler cars in Russia. The Magna plant will be the last of the kind in Russia, as the ministry plans to abandon the practice as it violates the WTO norms.
The new plant, to be built in the Nizhny Novgorod Region in the Volga area, will mainly assemble Chrysler models, providing Magna with an opportunity to make good money on component supplies, and Chrysler with a chance to improve its position on the Russian market.
According to certain federal officials and auto-making executives, Magna's project to launch a plant to assemble 100,000-150,000 cars a year, basically Chrysler models, with an option to double the design capacity, was approved last week. The parameters have not changed.
The regional ministry for investment policy expects the company to select a production site by the end of June, in which case construction will begin in early 2009. A source said that Russian Machines, a wholly-owned subsidiary of Russian industrial holding Basic Element (BasEl), would co-invest in the project, although the company said a final decision has not been made yet.
It is not surprising that Magna opted for assembling Chryslers in Russia, being a major supplier of Chrysler components. As for Chrysler itself, the company management had confirmed it was interested in having an assembly line in Russia in a bid to boost sales.
According to the Association of European Businesses (AEB), Chrysler sold only 406 cars in Russia in the first quarter of 2008, plunging to 38th place in terms of sales.
Mikhail Lyamin, an analyst with the Bank of Moscow, said that, with this level of sales, it would be inefficient for Chrysler to invest in a new assembly line alone. Magna, on the contrary, would be interested in building a Chrysler assembly line in Russia to supply components for the project. Its components production could also be reoriented on the new GAZ Group model, Volga Siber, an executive-class sedan based on the Chrysler Sebring platform.
The GAZ Group, one of Russia's largest automobile manufacturers, is controlled by Russian Machines.
Gazeta.ru
Gazprom's takeover ends in scandal
Sixteen top managers at power generator OGK-2, controlled by Russian energy giant Gazprom, have quit, getting a record payoff of 557 million rubles ($23.5 million). The company is now facing financial and image problems.
Analysts hope the conflict between shareholders and management will not affect the stability of power supplies.
Sixteen OGK-2 top managers have stepped down, taking their "golden parachutes" with them. All of them signed three-year contracts in January 2008, when the gas monopoly took over the generating company. The managers' quitting entitled them to a severance pay of 24 to 36 monthly salaries. The overall sum of the compensation package for the managers who left after general director Mikhail Kuzishchev has reached an astronomical figure of 557 million rubles - the largest in the history of the power reform.
The company with no such money readily available was forced to borrow from outside sources.
The company's shareholders - Gazprom and electricity monopoly RAO UES - have condemned the former OGK-2 executives. Such a move, they say, has generated considerable financial and image risks, which can have an adverse effect on the company's investment rating and its investment program, as well as the planned second phase of its IPO.
The "golden parachute" idea was suggested by UES, which hoped to save managers of its subsidiaries from being fired when the firms were sold to new shareholders. Now the losers are the new owners.
Analysts do not rule out a repeat of such moves by managers in other companies. A case like that occurred in the Moscow regional electricity company, when its general director and his three deputies quit.
Gazprom has also announced a full-scale audit of OGK-2's assets to get a real perspective on the company's standing and the legitimacy of the former management's steps.
"The quitting of managers really threatens the company with financial risks: OGK-2's regular operations have halted - the managers left without handing over their responsibilities to incoming officials," said Sobinbank analyst Alexander Seleznev.
In his view, such a situation is fraught with image loss and mistrust, including among foreign investors: company stock is traded on the London exchange. To make matters worse, the company will have to make loans again: last year it posted the lowest profitability figures among power generators. Personnel squeeze could also make itself felt: it may prove hard finding such a number of managers at once.
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