MOSCOW, September 29 (RIA Novosti) Moscow provoked Georgia's runaway actions - expert / Largest deal in history of Russian financial market / Russia to breach iron curtain around U.S. uranium market / Gazprom fears missing out on 50% stake in TNK-BP / Gas price issue splits Russian government

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Nezavisimaya Gazeta

Moscow provoked Georgia's runaway actions - expert

The seizure of Russian officers in Georgia is the culmination of Russia's incomprehensible, contradictory and ostrich-like policy in the South Caucasus. Lieutenant General Yury Netkachev, former deputy commander of the Russian Troop Group in the South Caucasus, said as early as May 2006: "Give Saakashvili a finger, he will bite off the whole hand. The pull-out of Russian troops from Georgia has been a major strategic blunder by Russia. They will humble us and our officers in the future."
Many politicians in Russia agree. Gennady Gudkov, a member of the State Duma's security committee, literally echoed Netkachev: "Russia, unfortunately, only has itself to blame, because a policy of concessions, a policy that allowed the Georgian leadership to talk with Russia in ultimatums about troop withdrawal and strict fulfillment of an agreement that the Duma has not yet ratified, and much else that has just gone to confirm the proverb: 'Give them a finger and they'll seize the whole arm'."
General Netkachev emphatically denied to the paper that Russian servicemen could engage in intelligence activities against Georgia. "If we had done this and planned 'intrigues, coups, etc. against Saakashvili, the young reformers' illegitimate regime would not have survived for a couple of months. But we are, unfortunately, standing to one side. Other countries support Tbilisi. They act together against Russia, very successfully ousting it from the South Caucasus and other CIS regions."
Konstantin Kosachev, chairman of the State Duma's committee on foreign affairs, described the Georgian move as an element of the leadership's general strategy to sour relations with Russia as far as possible. He told the paper that the reason was a lack of headway on the problems of Abkhazia and South Ossetia. "Whenever the Georgian leadership has to explain the situation to its population, it at once points to 'Russia's ill-intentioned schemes'," he said. "Should the conflict persist, we can give an adequate reply to Georgia's moves - we can, for example, make symmetric claims against Georgia's representatives in Russia. I am certain the Russian secret services have such information."

Vremya Novostei

Largest deal in history of Russian financial market

Rosbank may become the first Russian bank which a foreign investor may pay over $2 billion to gain control over. Market players say it will be the Russian financial market's largest deal so far, and that Societe Generale will gradually increase its stake in the bank to 100%.
Yesterday it was announced that one of Europe's largest banking groups had doubled its stake in Rosbank to 20% and received an option for another 30% plus two shares, for which it would pay $1.7 billion. This means that the French group will pay the bank's current owner, Interros, a total of $2.3 billion for the controlling stake.
Rosbank has recently taken over OVK Group's banks and is actively developing its retail business, attracting the attention of Societe Generale, which has other banking assets in Russia, analysts told the paper.
Last June, it paid $317 million for a 10% stake in the bank. Leading market players believe that the French group assessed the bank at $3.2 billion, or four times of its current own capital. The new assessment is $5.7 billion for 100%.
"Given the bank's current value, this is a coefficient of 5, which is very expensive," said Mikhail Matovnikov, director general of the Center for Economic Analysis.
"This is a very good price," said Alex Kantarovich, analyst with MDM Bank.
However, Denis Mukhin, analyst with the BKS brokerage, said that given Rosbank's additional issue of shares, by the time $1.7 billion is paid in 2008, the coefficient will be 3 or 3.5.
Before the transaction with the French group, Rosbank's shareholders planned to hold an initial public offering to float at least 20% of the stock. Apparently, they will no longer be able to take strategic decisions independently.
Interros and Societe Generale are unlikely to hold IPOs; most probably, the French group will increase its stake to 100%, buying shares from minority shareholders, Matovnikov said.

Gazeta.ru

Russia to breach iron curtain around U.S. uranium market

Russia intends to take over 25% of the American uranium market, Sergei Kiriyenko, the head of the Federal Agency for Nuclear Power, said Thursday. But first it must convince the United States to lift anti-dumping restrictions - a duty of 115.8% on Russian uranium.
Russian producers say that if they fail to reach agreement with the U.S., they will go to court.
This is not a favored scenario, because the court might rule against them; and even if they do receive a positive ruling, this could take 2-3 years. However, the procedure can be cut to 12 months if the parties agree on the issue.
"Our goal is to gain sufficient access to the American market, which is currently the most solvent," said Dmitry Yevstafyev, PR head of Techsnabexport (Tenex), which accounts for 40% of global supplies of uranium, including enriched uranium.
Igor Nuzhdin of the Solid brokerage said that if Russia takes over 25% of the U.S. market, Russian nuclear producers' revenues will vary from $1.2 billion to $2.3 billion depending on the quality of supplies, and annual net profits will amount to $150-$250 million.
But analysts are not confident that a victory for Russia will come easily.
"The American authorities are resisting Russia because it sells uranium cheaply," said Igor Vasilyev of the Financial Bridge brokerage. He said much would depend on bilateral political relations, which have been strained by debates over Russia's accession to the World Trade Organization.
"Market mechanisms are not the key factor here," said Maxim Ivanov, an analyst with Center Invest Group. So far, only U.S. companies that want high-quality Russian uranium at acceptable prices support Russia.
"Americans are putting up a barrier against deliveries of uranium and any other goods whose prices they regard as dumping and infringing on the interests of local producers," Nuzhdin said. He doubts that Russia can assure the creation of favorable conditions, a goal proclaimed by Kiriyenko.

Vedomosti

Gazprom fears missing out on 50% stake in TNK-BP

Russian energy giant Gazprom has good reason to rush forward to lead the queue for a stake in Anglo-Russian oil venture TNK-BP held by Russian shareholders. According to informed sources, the gas monopoly is concerned about competition from its rival, state-controlled Rosneft.
"We will be the first to show an interest," said Alexander Ryazanov, president of Gazprom's oil subsidiary Gazprom Neft.
It is now impossible to complete the purchase. Under a TNK-BP shareholders' agreement, none of them can sell stakes until late 2007, and BP has the first right to do this, said a source close to the Russian co-owners of TNK-BP.
However, the shareholders are not against selling their stakes to the monopoly, the source said, and they may volunteer to terminate the moratorium ahead of time. "Current oil prices are too high, and the company's shareholders could cancel the moratorium even now, provided there is a buyer who will be ready to offer a good price, like Gazprom," said an investment banker, who is also an adviser to one of the Russian co-owners of TNK-BP.
Gazprom has learned that state-owned oil company Rosneft is also eyeing TNK-BP, the monopoly's two managers said. The co-owners of Alfa Group may decide in favor of the oil company for political reasons, said a manager of a large investment bank.
Another top manager from a Western bank who provides consulting services to Gazprom and Rosneft confirmed the information. "This will be a political decision in any event, but it has not been made yet," he said.
A top manager from a large investment bank said Gazprom is seeking to launch consultations on a potential deal for fear of missing out on a stake in TNK-BP. The banker recalled that Rosneft snatched Yuganskneftegaz, a former core production unit of bankrupt oil company Yukos, and oil company Udmurtneft from under Gazprom's nose.
Today, the gas monopoly has a larger spending capability than Rosneft, but by 2008 Sergei Bogdanchikov's company will pay off the bulk of its debt and will be able to borrow $20-$25 billion to buy a stake in TNK-BP.
However, Gazprom would be able to produce the funds immediately, Ryazanov said yesterday.
Analyst Maxim Shein from the Broker Credit Service brokerage believes Rosneft cannot afford the stake, nor will it be able to attract a $20-$25 billion loan in a year. In addition, TNK-BP is closer to Gazprom geographically.

Kommersant

Gas price issue splits Russian government

Yesterday, Russian Economic Development and Trade Minister German Gref officially opposed a plan to sell 100 billion cu m of natural gas to industrial consumers at unregulated prices in 2007, put forward by Industry and Energy Minister Viktor Khristenko in Sochi the previous day.
"The proposal is being discussed, but no decision has been made yet," Gref said. "I do not see how it can be implemented."
However, talks are already underway on which agency, the Industry and Energy Ministry or the Federal Tariff Service, will determine the basic tariff, which will be significantly higher than the present rate. A source in Gazprom, Russia's state-controlled gas monopoly, said that prices would grow to $70 per 1,000 cu m for electricity producers and to $90-100 per 1,000 cu m for producers of fertilizers. At present, these consumers pay an average of $40-50.
"We have long insisted on introducing commercial prices for industry and gas chemical production," said yesterday Alexander Ryazanov, Gazprom's deputy CEO. "Gazprom subsidizes fertilizers production, supplying gas at $40 per 1,000 cu m, while 90% of the output is later exported."
Prices for households and the communal sector will rise gradually, while prices for electricity producers are "a separate issue," Ryazanov said. "RAO UES switched all thermal power plants with 35% efficiency over to natural gas, and letting off 65% of the fuel into the air, it blames everything on Gazprom," he said. "They have built the Northwest Thermal Power Plant, and now they say they do not have gas. But they never asked us whether they should build it there." The energy monopoly has to review its fuel balance, he said.
Meanwhile, RAO UES is already getting ready for the new price formation scheme, which has yet to be endorsed by the government. Yesterday, the company's committee for energy strategy decided to "get ready to sign long-term contracts for gas supply to the existing power generation facilities, for gas purchases on commodities exchanges and to change fuel regimes of power plants." The RAO UES board will endorse the proposals today.
The latest news of deregulation of gas prices debated by the government has already influenced Gazprom's stock, which yesterday gained 4.8% on the RTS. "The market's response to the news was very positive," said Alexei Dolgikh, vice president of the Troika Dialog brokerage.