What the Russian papers say

MOSCOW, September 14 (RIA Novosti) Gunmen shoot first deputy Central Bank chief/ Putin's pledge to send 30% of energy exports to Asia unrealizable/ Russia to increase presence on global fuel market/ Motorola fails to understand Russian specifics, loses case/ Russia has as many mobile phones as people

(RIA Novosti does not accept responsibility for the articles in the press)

 

Vremya Novostei, Kommersant

Gunmen shoot first deputy Central Bank chairman

The papers focus on an attack on Andrei Kozlov, 41, the first deputy chairman of the Central Bank of Russia. He was shot by unidentified assailants Wednesday night.

Analysts and Kozlov's colleagues said the attack may have been connected with his work.

Garegin Tosunyan, president of the Association of Russian Banks, said someone would always oppose banking oversight.

"I do not want to think that the attack is connected with his professional activities, but I cannot suggest any other theory," said Alexander Murychev, president of the Association of Regional Banks of Russia.

Former Finance Minister of Russia Alexander Livshits, who is now deputy general director of Rusal, said Finance Ministry and Central Bank officials had not been attacked. But Kommersant said this was not the case as shots were fired at the apartment of Central Bank chief Sergei Dubinin in 1997, and the car of the then First Deputy Finance Minister Andrei Vavilov was blown up at the time.

Kozlov was in charge of banking oversight, a trouble-ridden sector, was always considered to have taken a tough line and influenced Central Bank decisions on revoking bank licenses. In 2002, when the Central Bank decided to check Russian banks in the run-up to establishing a deposits insurance system, Kozlov promised "two or three years of controlled stress" to bankers.

In May 2004, Sodbiznesbank was accused of aiding terrorists and had its license revoked for money laundering. The bank's owner Alexander Slesarev and his family were shot dead on the road in October 2005.

This year, the Central Bank revoked the licenses of 40 banks on the initiative of Kozlov. Police said they suspected those waiting to have their licenses revoked, rather than the owners of defunct banks, of ordering Kozlov's killing.

Sources in the banking community said Kozlov may also have infringed upon the interests of "gray" importers; and most bank licenses were recently revoked because of dubious non-cash transfers for minimizing importers' customs and VAT payments.

Last week, Kozlov suggested a lifelong work ban for all bankers guilty of white-collar crimes such as tax violations and money laundering.

Nezavisimaya Gazeta

Putin's promise to divert 30% of Russian energy exports to Asia unrealizable

At the third Valdai Club meeting, attended by tradition by Western analysts, President Vladimir Putin made a sensational announcement: in 10 to 15 years' time 30% of Russian energy exports will go to Asia. Why did Putin promise the impossible? asks an analyst writing in the paper.

Vladislav Inozemtsev, director of the Center for Post-Industrial Research, professor at the Higher School of Economics, said in 2005, Russia exported 242 million metric tons of oil and 186 billion cubic meters of natural gas. China and Japan accounted for 3% of Russia's energy exports (15 and 2.5 million tons of oil, respectively). To bring the figure to 30% no less than 60 million tons of oil and 65 billion cubic meters of gas a year need to be shipped to the East. This task is unrealizable technically and doubtful economically, he said.

First, more than 90% of explored oil is found in West Siberia and European Russia. The four main fields in East Siberia - Verkhnechonskoye, Talakanskoye, Vankorskoye and Yurubcheno-Takhomskoye - have reserves of 500 to 600 million tons, and, as estimated by the Institute of Energy Politics, their annual output will not top 40 million tons by 2015. There will be some schedule shifting when Sakhalin-I and Sakhalin-II go on stream, but their oil and gas are already 70-80% contracted for delivery.

Second, there are organizational problems. Oil and gas exports are seen in Russia mainly in the political context and are handled by ineffective state-owned companies, with all private initiatives usually torpedoed (for example, a Yukos proposal to build an oil pipeline to Daqing, and a plan by LUKoil, Sibneft, TNK and Yukos to construct a West Siberia-Murmansk oil pipeline).

The most that can be rerouted to the East in 2020 is 40 million tons of oil and 30-40 billion cubic meters of gas, or 15% of energy exports. But their cost effectiveness is questionable: the projects look to a pipeline system that pegs producers to definite markets, makes deliveries inflexible and allows consumers to dictate prices.

Gazeta.ru

Russia to increase presence on global fuel market

Rosneft, Russian state-owned oil major, plans to invest huge sums in oil refining. But Russian car owners will be unable to enjoy the results, as the projects are export-oriented and are part of the government's move to increase Russia's presence on the global fuel market, experts told the paper.

The bulk of the planned $2 billion will go on overhauling an expert terminal and refinery in Tuapse, southern Russia.

The company plans to triple the refinery's annual capacity from 4 million to 12 million tons and increase the refining depth from 56% to 95%. After the overhaul the refinery will start producing Euro 3 and Euro 4 gasoline, and Euro 5 diesel fuel. At present, it produces Euro 2 fuel, while fuel oil accounts for over 40% of its output. After the overhaul its annual production will shrink sevenfold, from 1.76 million tons to 0.24 million tons, according to preliminary estimates. The upgrade will increase the share of export products from 65% to 80%.

Maxim Shein, analyst with Broker Credit Service, said the overhaul was not so much an economic maneuver as a geopolitical one. "Of course, the increase in the refinery's capacity will increase Rosneft's revenues," he said. "Given that the Tuapse refinery is very close to a pipeline that pumps light oil [of the Siberian Light brand, which is more expensive than Urals], tripling its capacity will bring in $200 million in additional profit."

This, however, is not the most important aspect of the move, the analyst said. "Rosneft is creating a new strategic point for oil and petrochemicals shipment, which is part of the big game, the struggle for control over global oil flows," he said.

The modernization is part of a plan to take part in the pipeline from Burgas in Bulgaria to Alexandroupolis in Greece, Shein said. "Now, as it has cleared up the situation in the East, Russia is claiming the market in the south. Crude and petrochemicals supplies to Burgas, where LUKoil owns a refinery, and then to Alexandroupolis will help Russian producers to take up a significant part of the Mediterranean."

Vedomosti

Motorola fails to understand Russian specifics, loses case - expert

The Arbitration Court of Moscow has rejected Motorola's claim against RussGPS, which accused the American manufacturer of violating its patent rights. Lawyers said they believed Motorola, which demanded 291 million rubles (about $11 million) from the Russian firm in damages done to its business reputation, failed to take into account the specifics of Russian law.

Scott Offer, a Motorola vice president, said the Moscow court's ruling had surprised the company management, but declined to speak of its further moves. Sergei Kozlov, head of Motorola's Russian office, also refused to comment, saying he had no court decision in writing.

Pavel Panov, board chairman of RussGPS, considers the ruling to be logical. None of his RussGPS staff, he said, distributed information defaming Motorola. He said the Russian firm had merely asked the prosecutor's office to check if Motorola was violating RussGPS rights. He said Motorola representatives themselves had told the court that Russian distributors of mobile telephones had refused to execute contracts for the purchase of Motorola mobiles because they found the risks too high. But refusals to execute the contracts were made after Motorola demanded damages through court, he said. In addition, the contracts have a clause that the distributor has no right to fail to observe their terms. According to Panov, this was one of the reasons why the court, which also declined to comment, did not uphold the claim.

Valery Tutykhin, partner of John Tiner & Partners law firm, sees the cause of Motorola's loss in that the company had decided to sue without taking account of the specifics of Russian law. Any Russian lawyer would have first advised Motorola to settle its patent dispute and only then sue for the protection of its business reputation, Tutykhin said. In PR terms, it was a losing battle, and an essential point was that the patent dispute was already in the frame.

It would have been more logical, said Natalia Barshchevskaya, partner of Barshchevsky & Partners, if Motorola had waited for RussGPS to go to court over the violation of its patent rights and had filed an action in defense of its reputation after the dispute had been settled.

Novye Izvestia

Russia has as many mobile phones as people

Experts with the independent agency AC & M Consulting said the number of Russian mobile phone users increased by 2 million this August, and now equals the country's 145-million population.

This, of course, does not mean that all Russians, from infants to senior citizens, have mobile phones, because calculation methods are flawed.

Megafon spokesperson Marina Belasheva said the results reflected the number of SIM cards rather than phones. Some people use the services of two or more operators.

Moreover, mobile phone companies register subscribers for 90 to 180 days following service cancellation. This makes it difficult to estimate the number of active subscribers.

MTS spokesman Kirill Alyavdin said 80% of the Russian mobile phone market has been saturated by now. He said nobody can estimate the number of mobile phones in Moscow, because the city does not have a fixed population.

"SIM card sales records and those of Rosgosstat show there were 151 and 133 SIM cards for every 100 people in Moscow and St. Petersburg, respectively," said Alyavdin.

Independent experts said the number of subscribers was different. Nadezhda Golubeva, an analyst at the Moscow-based Aton brokerage, said subscribers accounted for about 70% of the Russian population.

Many people have two phones, trying to save money by using different payment plans, or using company phones. Moreover, when coming to another city, subscribers can buy local cheap two- or three-day SIM cards.

Even 70% is a lot if one leaves out 7 million preschoolers, 13 million people with impaired hearing and one million prison inmates.

Unlike Eastern Europe and South East Asia, the Russian market has not reached its full capacity yet. "Russia ranks together with China and India in this respect," the expert said.