MOSCOW, March 15 (RIA Novosti) Isolating Hamas may lead to big Middle East war - Russian minister / Foreign investment undermines Russian industry - experts / Rosneft set to bankrupt Yukos before IPO / TNK offers Gazprom controlling stake in Kovykta project / Government invents tax refund scheme for Sibneft

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Vremya Novostei

Isolating Hamas may lead to big Middle East war - Russian minister

Attempts to isolate Hamas by establishing an economic blockade around Palestine will not solve the problems in the Middle East, but rather lead to a big war in the region, the Russian foreign minister said.
"Attempts to isolate Hamas are counterproductive," Sergei Lavrov said in an interview with the Vremya Novostei daily. "This scenario - throwing off the Hamas government by financial suffocation - is the least likely. Besides, the Palestinians will not change their attitude toward Hamas."
The minister said another scenario was more likely: Hamas will win an even more convincing victory in a repeated election. "Or those within Hamas who prefer to stick to all of their radical extremist principles will gain the upper hand," Lavrov predicted. "Then chaos will ensue in Palestine."
The minister said that if anyone hoped it would be possible to interfere then, and bring order to Palestine and eliminate Hamas, "this is an invitation to a very big war in the Middle East."
Lavrov said Hamas should become "a full partner of the peace talks and represent the Palestinian National Authority."
"In addition to meeting with the Hamas leaders in the Russian capital, we are continuing to remind them of the promises made in Moscow through our representatives in the region," he added.
These encompass recognition of the road map for peace, ensuring the transparency of foreign aid to Palestine, and recognition of President Mahmoud Abbas' full powers, including in the foreign policy realm.
"Also, Hamas needs to support the Arab peace initiative, which like the roadmap, envisages recognition of Israel," Lavrov said.
He added that he hoped to see "some practical moves in this respect" within the next two weeks.

Novye Izvestia

Foreign investment undermines Russian industry - experts

Foreign investment in Russia's lending system and commodities sector is undermining the country's security. This conclusion was reached yesterday at a meeting of the Moscow discussion club on the role of foreign capital in the country's modern development. Experts say that the West is ready to invest only in industries that are already sufficiently developed.
Mikhail Delyagin, head of the Institute of Globalization Studies, said that in czarist Russia during the early 20th century about 70% of the assets in key industries, such as machine building and coal production, belonged to foreign capital. He said that when the trouble came, foreigners wrote off their assets as losses and fled abroad with their money, leaving the country "alone with the revolution." Now the situation may be repeated, he warned.
Watching the government's efforts to join the WTO, thus opening to Western capital, Russian businessmen are exporting billions abroad in the form of long-term investment, Delyagin said.
Leonid Grigoryev, president of the Energy and Finances Institute, agreed that at present Russia exports capital. Foreign money comes into the country only in the form of short-term investment, he said.
"The Russian state can help Russian business," Delyagin said. However, he described the authorities' moves so far as well-intentioned but detrimental. For example, instead of modernizing companies that produce car parts, the Industry and Energy Ministry is creating incentives for the manual assembly of foreign cars. The government has opened the borders to foreigners, and now "the car parts industry can be taken to the dump along with all those who used to work there," he concluded.

Gazeta.ru

Rosneft set to bankrupt Yukos before IPO

The state is looking to completely bankrupt Yukos in order to consolidate the assets of Rosneft, the largest national state-run oil company, because it must repay a syndicated loan that was issued in September 2005 by ABN AMRO Bank, Dresdner Kleinwort Wasserstein, JP Morgan and Morgan Stanley.
Russian Economic Development and Trade Minister German Gref, who said on Tuesday that Rosneft would hold an initial public offering (IPO) by late 2006, did not hide the Kremlin's intentions to repay the debts of Rosneftegaz, another state-owned energy giant controlling 99.9% of Rosneft shares. The minister said the Rosneft sale would attract at least $15 billion.
Experts agree that the Rosneft IPO has been mostly held up by the incomplete consolidation of the main corporate assets. "First of all, this concerns the disgraced Yukos company, which would receive a stake in Rosneft after the merger," Andrei Gromadin, an MDM Bank analyst, told the paper. "However, this would scare away investors because Yukos would then be able to file additional lawsuits against Russian authorities."
It appears that Russian authorities want to consolidate Rosneft assets by bankrupting Yukos. Western creditor banks demanded late last week that Rosneft bankrupt Yukos, which will not receive a stake in the company prior to the consolidation of assets.
An expert who wished to remain anonymous said an agreement had been reached allowing the banks that are financing the Rosneft IPO to bankrupt Yukos in exchange for corporate debts.

Biznes

TNK offers Gazprom controlling stake in Kovykta project

Russian-British oil major TNK Holding has specified its proposals to Gazprom on the joint development of the Kovykta gas condensate field in the Irkutsk Region, East Siberia. The company is ready to offer the state gas concern a controlling stake in the project.
Gazprom is pondering the issue, but everything may change if Russia and China come to terms on Russian gas deliveries during President Vladimir Putin's visit to China next week.
TNK Holding plans to create a consortium of four companies. The controlling stake in the production company is to be given to a subsidiary of TNK-BP, Rusia Petroleum. Pipeline assets are to be turned over to Gazprom. Viktor Vekselberg, a co-owner of TNK-BP and aluminum holding SUAL, suggested dividing the gas selling company in the same manner as the holding, offering Gazprom 51%. The fourth company should process gas.
Gazprom had clearly hinted that the Kovykta deposit (with prospected reserves of more than 1.4 trillion cubic meters of gas and 95 million metric tons of condensate) is not among its priorities in East Siberia.
TNK-BP has made a very good offer to Gazprom, said Anton Rubtsov, an analyst with Rye, Man & Gor Securities. The concern has saved on investment into development, and TNK Holding is prepared to divide the gas output into equal shares.
But Gazprom is still waiting because contracts on gas deliveries to the Asia-Pacific countries from Kovykta have not yet been signed, said Mikhail Armyakov, chief analyst at the RIM brokerage.
The situation could change in the next few days. During Putin's visit to China next week, the two countries may sign an agreement on Russian gas deliveries to China, which has made its interest known more than once.

Vedomosti

Government invents tax refund scheme for Sibneft

St. Petersburg officials have found a use for taxes collected from state-owned companies that are registered in the city. In 2007-2016, they will annually allocate $200 million to build a 300m-tall office building with an area of 1 million sq m. City authorities hope to attract another $100 million a year from private investors. Developers describe the project as crazy.
Alexander Nikonov, chairman of the city administration's financial committee, said the architectural center of the project would be offices for the oil major Sibneft, which was recently bought by the state-owned gas giant Gazprom.
Gazprom's press service declined to comment, but a source close to the company said that its needs were far less than 1 million sq m.
"Most likely, the project will be used as an argument in the city's talks with Sibneft on registering the company in St. Petersburg," the source said. The city wants to persuade the potential taxpayer that its taxes will not be wasted but used to create joint property, he said.
Recently, companies such as Gazpromregiongaz, Rosneft subsidiary RN Trade, Vneshtorgbank, Sovkomflot, Transaero, Transnefteprodukt and Sibur Holding have re-registered their main offices in St. Petersburg.
If Sibneft follows suit, it will pay exactly $200 million a year to the city budget, said Dmitry Mangilev, an analyst with the Prospekt investment company.
The budget committee of the St. Petersburg legislative assembly assesses that the city's income from state-owned companies that have moved there would amount to some 10 billion rubles (about $360 million). Total federal revenue in 2006 is projected at 145 billion rubles (about $5.1 billion).
Market players are surprised by the scale of the project. Vladimir Svinyin, head of the Okhta Group development firm said the city did not need so much. "This is a crazy project that no private investor will agree to," said Igor Vodopyanov, head of the management company Teorema. It will take decades for the project to pay off, and there will be not enough leasers for the offices, he said.