What the Russian papers say

MOSCOW, September 20 (RIA Novosti) Sakhalin II project will not be another Yukos - expert/Gazprom, KazMunaiGaz to trade in Kazakh gas jointly/EU may bankrupt Pulkovo Airlines/Transdnestr to introduce Russian ruble/Russian Democrats cannot come to power - experts

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Gazeta

Sakhalin II project will not be another Yukos - expert

The Russian Natural Resources Ministry's decision to suspend the environmental permit for the Sakhalin II oil project is seen by Western experts and mass media as "a signal towards reviewing agreements on joint energy production," and even as "Moscow's renewed attempt to return private oil and gas assets to its control" by "ensuring Gazprom's stake in the project".
Russian analysts, however, said the project will continue developing successfully after "a little bargaining".
The Japanese mass media compared the move with "Yukos's breakup and the suspension of gas deliveries to Ukraine." Shinzo Abe, chief cabinet secretary, and the frontrunner to be the next prime minister, warned that bilateral relations with Russia could be completely reviewed.
Other countries have so far only hinted unofficially to possible negative consequences should the state interfere in the economy in such an unacceptable way.
Mitsui and Mitsubishi, which hold 25% and 20% respectively in Sakhalin Energy, the project's operator, have already invested $4.7 billion in Sakhalin II, and now fear making any dramatic moves.
But they have already faced losses - the day after the Russian ministry announced its decision, Mitsui lost 3.1% on the Tokyo stock exchange, and Mitsubishi 1.8%.
Moscow, however, denies that the move is politically motivated. "I understand that such developments can evoke some emotion in Japan," said Konstantin Kosachev, chairman of the Russian parliament's International Committee.
"I urge Japanese politicians and, of course, journalists to avoid getting emotional, and try to deal with the facts. I hope there will be no more reason to believe that this issue has been politicized," he said.
Viktor Pavlyatenko, head of the Center on Russian-Japanese relations at the Institute of Far Eastern Studies, at the Russian Academy of Sciences, said: "Various claims made by Shinzo Abe are a wise move in his election campaign."
"There will be no second Yukos or the Russo-Japanese War. After some bargaining Gazprom will join the project and the Japanese will remain there. So they should not worry about its implementation," he said.

Vedomosti

Gazprom, KazMunaiGaz to trade in Kazakh gas jointly

The presidents of Russia and Kazakhstan have devised a way for their state companies to profit from the export of Kazakhstan's gas. Their subordinates are drafting an agreement under which a joint venture between Russian energy giant Gazprom and KazMunaiGaz, a major contributor of revenues to the republican budget, will sell gas to Gazprom at $149 per 1,000 cubic meters.
The joint venture expects to buy gas from the international consortium that is developing the Karachaganak field at $50-60 per 1,000 cubic meters. The deal may misfire if the consortium refuses to sell gas at this price, or if the partners in the joint venture fail to come to terms regarding exports to Europe.
The parties expect to sign the agreement October 3 in Uralsk, Kazakhstan, in the presence of Russian President Vladimir Putin and Kazakhstan's President Nursultan Nazarbayev, a Kremlin source said.
Aida Abenova, chief expert in the foreign relations department of the Energy Ministry of Kazakhstan, said the draft agreement was forwarded for approval to the government September 18.
Russia and Kazakhstan will set the joint venture on a par at the Orenburg Refinery, which will be the Russian company's contribution to the venture's authorized capital. For at least 15 years, the refinery will process at least 15 billion cubic meters of Karachaganak gas annually.
The Karachaganak field has 1.35 trillion cubic meters of gas and more than 200 million tons of oil and gas condensate. It is being developed under a production-sharing agreement signed in the 1990s by a consortium of British Gas and Eni (32.5% each), ChevronTexaco (20%) and LUKoil (15%).
A source close to the management of the joint venture, KazRosGaz, said the purchasing price presented a problem, as the consortium refuses to sell at less than $100 per 1,000 cubic meters.
"Turkmenistan has raised the purchasing price for Gazprom to $100. This is a telling signal for the market," the source said. "The new price should be regarded as the starting price for talks, especially because KazRosGaz intends to sell it to Gazprom at $140-145 per 1,000 cubic meters."
A source in the Russian government said the agreement and the contract might not be signed soon. "We have revised them several times at Kazakhstan's request," he said. "The signing was postponed in June, when Putin and Nazarbayev met in Almaty. Kazakhstan is playing for time to get more benefits."

Gudok

EU may bankrupt Pulkovo Airlines

The EU has officially notified Pulkovo Airlines, one of Russia's largest air carriers, that it may find itself on a new blacklist to be compiled October 4.
Experts said the EU hopes to pay less to operate Trans-Siberian routes by pressuring Pulkovo Airlines, which may face bankruptcy.
No Russian airline has yet found itself on the EU blacklist banning flights to Europe.
Pulkovo Airlines commercial director Vladimir Bondyrev said the European Commission's verdict may have been influenced by the August 22 crash of a Tupolev Tu-154 jetliner near Donetsk, and by Moscow's reluctance to charge lower royalties for the operation of Trans-Siberian routes.
Vitaly Baitin, an expert with Tsentr-Invest Securities, said foreign carriers always wanted to fly to St. Petersburg. "They can now get rid of the strongest market player through purely legal means," Baitin told Gudok.
Dmitry Abazalov, an expert with the Political Situation Center, said Pulkovo Airlines will be involved in a political game until October 4.
"We can only speculate on the outcome of this game and who the winner will be," Abazalov told the paper. He said the company may lose $400-500 million a year if it is not allowed to operate in Europe.
The company operates short-range and medium-range airliners, which can only fly to Europe and the CIS, but not along Russian regional routes.
Abazalov said Pulkovo Airlines has a 75% chance of going bankrupt unless it overhauls the air fleet. But the company, which has an extremely strong administrative resource base, may yet take preventive action before October 4.
Abazalov said Pulkovo Airlines has become a scapegoat for Russia's refusal to reduce royalties, now totaling $300-400 million a year.

Novye Izvestia

Transdnestr to introduce Russian ruble

Transdnestr, a self-proclaimed republic in Moldova with a mostly Russian population, has taken all the necessary steps to enter the Russian ruble zone.
Introduction of the ruble is an economic process with serious political implications for Tiraspol, and experts said it does not need Russia's permission to complete it.
Transdnestr's President Igor Smirnov insists that the introduction of the ruble is being carried out under Russian Central Bank supervision. "Russian experts inspected the Transdnestr Republic Bank and did not have any complaints about its activities or transparency," he said.
No cases of money laundering have been found in the banking system, he said, adding that all banks "comply with Russian standards."
"They do not need any permission from Russia [to introduce the ruble]," said Vladimir Zharikhin, deputy director of the Institute for CIS Studies.
"There is no talk of setting up another emission center, after all," he said. "Any country can allow circulation of a foreign currency on its territory. An example is Montenegro, which unilaterally introduced the euro into domestic circulation several years ago."
Dmitry Sorokin, deputy director of the Institute of Economics of the Russian Academy of Sciences, said the ruble already circulated in the breakaway republic, so any positive or negative breakthrough was not to be expected.
"You cannot compare this situation with the Russian-Belarusian talks on introducing a single currency," he said. "Transdnestr is very dependent on us economically. Smirnov's statement is rather declarative. He did it to emphasize his closeness to Russia."
Russia, in turn, has taken several additional steps towards Transdnestr. It can recognize joint stock companies set up in the republic, which will allow their securities to be traded on Russian stock exchanges.
Then Transdnestr banks will be able to take out loans from Russian banks secured with their stock, which means Russia will recognize Transdnestr companies as a guarantor country, said Sergei Dontsov, director of the Healthcare and Social Development Ministry's management department.

Vremya Novostei

Russian Democrats cannot come to power - experts

Slightly more than a year remains before the next parliamentary elections. Non-parliamentary parties will fight to win seats, and some even hope to form a constitutional majority.
The Union of Right Forces (SPS) has promised to have the candidate of "a united democratic party" elected president in 2016. Experts say current liberals have a chance, but that their time is running out fast.
Boris Makarenko, deputy head of the Center for Political Technologies, said that according to different scenarios up to 30% of the population could vote for a liberal party.
"This does not mean the potential of a liberal party is 30%, but it certainly is higher than the 7% [election barrier]," he said.
However, polls show that the ratings of the SPS and Yabloko hover around 2%, which means that "the liberals cannot win seats in the lower house separately," Makarenko said.
"They should either unite, or one of the parties should take the other one over," he said.
Makarenko said his incurable optimism prevents him from pronouncing a death sentence on current liberal parties.
Iosif Diskin, co-chairman of the National Strategy Council, said right-wing parties, which have been pondering unification for a long time, will deteriorate into marginal groups and eventually disappear from the political field.
He said the liberal idea will have a future in Russia only if it is complemented by democratic and patriotic values. "Unfortunately, this model cannot be applied to current political parties," he said.
Political analysts agree that liberal ideas have a future in Russia.
"The liberal idea will remain in demand as long as the middle class grows stronger and feels a need to protect its rights," Makarenko said.
"But how much time will it take for that demand to materialize and take the form of a political force? Besides, the current parties may leave the scene by the time the demand is properly formulated," he said.
Diskin said democrats will become the ruling party within several election cycles. But he argues that the SPS is not a democratic party.
"The SPS and the current leadership of United Russia have one thing in common - the propaganda of authoritarian modernization," he said.