MOSCOW, January 11 (RIA Novosti) Who stands to gain from Russia-Belarus conflict? / Lukashenko demonstrates his successor to Moscow / Chevron, Gazprom Neft set up JV, may buy Yukos assets / Abramovich set to take over Oregon Steel / Investors to flee Russia
(RIA Novosti does not accept responsibility for articles in the press)
Novye Izvestia
Who stands to gain from Russia-Belarus conflict?
Russia has resumed oil deliveries to Europe via Belarus, but the oil and gas standoff has endangered the future of the Union State, which Russia and Belarus have been trying to establish for more than a decade.
"The latest crisis has put an end to integration. The Russian-Belarusian union can survive for some time only as a political project and an opportunity for propaganda and manipulation," said Andrei Okara, an expert with the Moscow-based Center for East European Studies.
The union is based on the geopolitical loyalty of Belarus bought by cheap Russian oil and gas. There are now no grounds for integration, and talking about the "brother nations" of Russia and Belarus is not enough for substantial political or economic relations.
However, Lukashenko has not been removed from the geopolitical map of Europe, Okara said. Western Europe is wrong to think that eastern policy is limited to oil and gas. Lukashenko has announced the creation of a Baltic-Black Sea union. By putting pressure on Belarus, the Kremlin risks facilitating a potential union of Baltic and Black Sea countries, which could in theory include the Baltic states, Belarus, Ukraine and Moldova.
Okara said that by driving itself into a corner, Moscow will have to come to terms with all of the above countries on transporting its hydrocarbons to Europe. The West will clearly exploit Russia's difficulties to blackmail and apply political pressure.
The hopes Moscow has pinned on the Nord Stream (North European Gas Pipeline) project are illusory. First, it is not clear when the construction can begin. Second, construction itself will last at least three, and possibly four, years.
Who will stand to gain from the Russian-Belarusian spat? The only apparent winners so far are energy giant Gazprom, as well as the individuals who receive the bulk of its profits. The dispute will also benefit American interests in Europe, as the U.S. stands to gain from a deterioration in EU-Russia relations, particularly relations between Germany and Russia.
Gazeta.ru
Lukashenko demonstrates his successor to Moscow
At the height of the oil and gas crisis, Belarusian President Alexander Lukashenko placed his son Viktor on the republic's Security Council. The Belarusian opposition fears he may be the future successor to the president, and experts do not rule out that Viktor Lukashenko's promotion is a demonstrative action organized specially for Russia.
The text of Decree No. 3, which the head of state signed on January 5, was posted on the website of the Belarus National Legal Information Center on Wednesday. The Security Council, which used to include mainly power ministers, will now have Viktor Lukashenko, the oldest son of the president, who until now had served as one of the president's many assistants.
Earlier Viktor served in border troops, and worked in the Foreign Ministry and at the Agat state military research and production association. Lukashenko Sr. has always claimed he has never pulled strings for his son. In February last year the president introduced, specially for his son, the position of presidential assistant for national security. Belarusian rights defenders claim that during the presidential election last March Viktor actively contributed to formulating a strategy for the forcible suppression of opposition protests.
In 2011, when Lukashenko's third term comes to an end, his son will turn 35. Belarusian law set this age as the minimum for a person to hold the country's highest position.
"Lukashenko trusts no one but his son," said Alexander Voitovich, former speaker of the upper house of the Belarusian parliament and Lukashenko's rival in the 2006 election campaign. "He seems to understand that his only lifeline is to hand over top state powers to his son." In Voitovich's view, this appointment deliberately coincided with the Russian-Belarusian oil and gas war, when many analysts saw Lukashenko Sr.'s grip on power weakening.
"I would not jump to conclusions, however," said Alexei Malashenko, deputy chairman of the Moscow Carnegie Center's learned council. "After all, Belarus is not like Central Asia or the South Caucasus." He does not imagine such a succession is possible "on the quasi-European space which, no matter what you do, includes Belarus." But he did not rule out that "perhaps the appointment was an occasion for Alexander Lukashenko to demonstrate to Russia that he had a successor, and that nothing will change in the longer term."
Vedomosti
Chevron, Gazprom Neft set up JV, may buy Yukos assets
U.S. oil major Chevron, which failed to buy a stake in Yukos-Sibneft three and a half years ago, has now got a chance to accomplish its dream. The company has established the Northern Taiga Neftegaz joint venture with Roman Abramovich's former company Gazprom Neft (previously named Sibneft). Analysts said the JV may buy a number of the now-bankrupt Yukos oil company's assets.
Gazprom Neft, an oil division of Russian energy giant Gazprom, holds 30% in the joint venture, and according to a source in the Russian oil company, the stake will be increased to controlling level in line with an earlier memorandum of cooperation. At the first stage Chevron will undertake major investment, the source said. He added that the new company had been established to implement oil projects when it is necessary to increase output.
Gazprom Neft is facing a global task of raising oil output to 80 million metric tons a year, 2.5 times more than in 2006, said Denis Borisov, an analyst at the Solid brokerage. To achieve this, the company needs a partner who will be able to diversify financial and geological risks.
The deal with Gazprom Neft will enable Chevron to realize its old desire to work in Russia. In the summer of 2003 the company intended to buy a blocking stake in Yukos-Sibneft and negotiated the deal with Yukos' ex-president Mikhail Khodorkovsky. However, the deal was never accomplished. Several months after the merger between Yukos and Sibneft, Khodorkovsky was jailed, and Yukos faced charges of tax evasion amounting to billions of dollars. The company was later declared bankrupt. Before that, Sibneft's shareholders divorced Yukos and sold the company to Gazprom, which renamed it Gazprom Neft.
As part of an alliance with Gazprom's subsidiary, Chevron can buy Yukos assets, Borisov said. "The ideas behind the alliance can vary from developing Gazprom's oil fields, such as Prirazlomnoye, to a potential joint acquisition of Yukos' assets," said analyst Kakha Kiknavelidze of UBS.
Gazprom's top managers declared that the gas monopoly was eyeing the bankrupt company's assets that could be auctioned off. Gazprom would also like to buy Yukos' oil production units, such as Tomskneft and VSNK. A Chevron official said he knew nothing of whether the joint venture was planning to buy Yukos' assets, while a source in Gazprom Neft said the venture would not buy any assets.
Izvestia
Abramovich set to take over Oregon Steel
U.S. authorities have approved the purchase by business tycoon Roman Abramovich, the owner of Russian steel giant Evraz, of Portland-based Oregon Steel Mills Inc., which manufactures armor under Pentagon contracts.
It usually takes 45 days to approve such deals, but the $2.3 billion purchase was approved in just 30.
Abramovich, Russia's wealthiest businessman, whose fortune is estimated by Forbes Magazine at $18.3 billion, may take over the enterprise by the end of the week in what will be the largest deal ever to be closed by a Russian company in the United States.
Evraz managers said shareholders of Oregon Steel could sell their securities before the end of the week.
Evraz has already bought 36% of the company's corporate stock, a move that may convince undecided shareholders to accept the Russian offer.
Abramovich has promised to retain all wages, benefits and pensions.
Top Oregon Steel managers are eager to merge with Evraz, because they will reportedly keep their jobs and high bonuses.
They will also receive large severance payments and other benefits under a golden parachute clause if their employment is terminated.
For instance, Oregon Steel CEO Jim Declusin, who has advocated the merger with Evraz from the very outset, would receive $6 million should he step down.
Evraz and Oregon Steel officials said both companies are made for each other, because Evraz turns out primary rolled stock, and Oregon Steel produces finished products.
Instead of merely exporting steel slabs, Abramovich will now have them processed into top-quality roll stock in Portland.
Nezavisimaya Gazeta
Investors to flee Russia
An unprecedented growth of foreign direct investment (FDI) in the Russian economy in 2006 (up $28.4 billion) is unlikely to be repeated in 2007. The influx of foreign investment will be halted by Russian authorities' environmental concerns, which foreign investors view as a pretext for infringing on their financial investments.
According to the United Nations Conference on Trade and Development (UNCTAD), foreign direct investment in Russia almost doubled last year compared to 2005, while the average global figure was 34% (up to $1.2 trillion). Foreign experts said the continued inflow would be negatively hit by the approval of harsher regulations on the use of natural resources and disputes concerning the natural gas projects off Sakhalin (Russia's Far East).
Yevgeny Yasin, research head of the Russian Higher School of Economics, supports this view.
Relations in the sphere were regulated by "a production sharing agreement with Shell," he said. "But the Sakhalin scandal has engendered foreign investors' concerns over their money in Russia."
Yasin said the slowing inflow of foreign investment in 2007 would be accompanied by Russian capital flight, although the latter would be good for the Russian economy. He said Russian deposits with foreign banks grew from $150 billion to $220 billion last year. "The outflow of money from Russia and the maintenance of the Stabilization Fund in relative safety is restraining inflation in Russia," Yasin said.
Economists forecast that investments, including the low-yield state ones, will continue to grow in 2007, albeit at a slower pace. "Conflicts in the mineral resource sectors do not influence the decisions of French or Swiss investors who channel their money into services and trade," Yasin said.
"Like last year, the consumer sector will grow 5-7% in 2007, without a serious influence from foreign investment," said Yevgeny Gavrilenkov, chief economist with the Troika Dialog brokerage.
He said the federal authorities had clearly showed investors in 2006 that the state would strengthen its control of the oil and gas producing sectors, but also eased off in the energy and financial sectors.
