MOSCOW, May 26 (RIA Novosti)
Russia should balance China ties by promoting relations with Japan/ Each Ukrainian leader is playing their own Russia card/ Differences between TNK-BP's shareholders become wider/ Severstal to buy controlling stake in West African iron-ore deposit/ China finds uranium for its nuclear plants in Russia/ Debtors will not be allowed to use phones and cars
Nezavisimaya Gazeta
Russia should balance China ties by promoting relations with Japan
Russia's Asian policy is becoming more dynamic, while tensions and mistrust in its relations with the West are growing over numerous differences. But Russia needs to balance its policy regarding rapidly growing China and the world's second largest economy, Japan.
Tensions are growing between the United States and its Asian allies - Japan and South Korea - and China. In this situation, Russia needs to maintain neutrality. Instead of trying to join the American-Japanese alliance in order to counterbalance China, Russia should normalize and develop relations with Japan.
However, this policy is hindered by the lack of a peace treaty because of Japan's claims to the four South Kuril Islands (Iturup, Kunashir, Shikotan and Habomai) turned over to Russia after WWII.
Russian diplomats say Moscow plans to settle the territorial dispute with Japan on the basis of the 1956 declaration. "We would have turned over two islands [Habomai and Shikotan] to Japan had it agreed to accept them," said a source in the Russian Foreign Ministry.
The Japanese Foreign Ministry insists that Russia should turn over all four islands, though privately Japanese diplomats advocate a more flexible approach and readiness to cut their territorial claims.
Japanese observers admit that regaining Iturup is unrealistic, and that the best Japan can hope for is the return of Shikotan, Habomai and Kunashir. Experts and diplomats should work on a mutually acceptable formula to settle the problem.
Time is against Japan, as the numbers of Japanese currently living on Iturup, Kunashir and Shikotan, decreases each year - most Japanese were forced to leave the islands when Soviet troops were deployed there in the 1940s.
At the same time, Japanese investment in Russia is growing, which undermines the Japanese authorities' arguments against developing relations with Russia without the peace treaty.
Procrastination with settling the territorial dispute will cost the two countries more in lost profits and, most importantly, hinder the strengthening of mutual trust.
Russia and Japan should adopt a more constructive attitude to the territorial problem and show readiness for mutual concessions.
Kommersant
Each Ukrainian leader is playing their own Russia card
The president and the prime minister of Ukraine are promoting competitive energy strategies to develop their country. Viktor Yushchenko suggested a gas transport OPEC to deal with the transportation of energy bypassing Russia. Yulia Tymoshenko, on the other hand, plans to settle the gas dispute with Russia by promising Moscow to extend the agreement over the base for the Black Sea Fleet and stalling Ukraine's NATO membership.
As Ukraine's president developed the idea, Ukraine's role in a gas transport OPEC working in the EU's interest will make his country closer to the EU and improve Kiev's standing in gas conflicts with Moscow. So, he argues, the president could pose as the author of a strategy guaranteeing a European future for Ukraine, and score points in the fight against Yulia Tymoshenko, who is also seeking to become the new head of state in 2009.
The "orange princess" is planning a counter-game in which the theme of Russian gas is the key. On Friday, while Yushchenko talked about a gas transportation OPEC at a summit in Kiev, the prime minister went to a CIS head of government meeting in Minsk and held talks with Prime Minister Vladimir Putin, during which the sides agreed to drop intermediaries from their gas relationship and conclude contracts directly between Naftogaz and Gazprom.
In Minsk, however, Russian and Ukrainian heads of government discussed a wider range of issues. A source close to the Ukrainian prime minister reported that Tymoshenko promised not to expedite the country's NATO membership, extend the deal on Russia's Black Sea Fleet beyond 2017, and allow Gazprom to run Ukrainian gas transport assets. In exchange, she asked Russia to support her candidacy in a 2009 presidential election, and keep gas prices for Ukraine relatively low. A source said the sides had agreed to "move in that direction."
It is not, however, a fact that the Kremlin is prepared to bet on the "orange princess." "To trust Yulia Tymoshenko is the last thing that we should be doing," said a source in the Russian presidential administration. Vasily Kiselyov, deputy of Ukraine's Supreme Rada (parliament), agrees: "Yulia Tymoshenko could offer Russia anything, including political preferences. It is a different matter that Tymoshenko has ample experience of pulling out of such unorthodox situations. At the right time she will find a way not to honor her promises while at the same time keeping low gas prices for a time."
Vedomosti
Differences between TNK-BP's shareholders become wider
There are serious differences between TNK-BP's shareholders, president and CEO of the Russian-British joint venture, Robert Dudley, admits. Bypassing Dudley, TNK-BP managers even wanted to halve the quota for foreign staff.
Firstly, the TNK-BP shareholders differ on investment issues. Some of them support larger investment in maintenance and repair of equipment and also on safety, some are against this and insist on the company's wider international expansion, Dudley explains.
In his opinion, the company must focus on field exploration and development, as well as on oil processing, primarily in Russia.
Any plans for TNK-BP's Russian shareholders (the Alfa Group consortium, Access Industries, Renova and AAR) to invest abroad have been blocked by BP to prevent competition, says a source close to an AAR subsidiary.
"At the time of its establishment, TNK-BP was planned as an oil producer with its main business in Russia and Ukraine," Vladimir Buyanov, a BP spokesman, said. At the same time, BP is not against TNK-BP's entry into the markets of Venezuela, Turkmenistan and Kazakhstan, he said.
AAR, in turn, is irritated by TNK-BP's high costs for expensive foreign managers, a source close to the AAR consortium said.
Now the conflict has divided even the TNK-BP managers. Dudley is indignant that some foreigners working at TNK-BP may lose their jobs because of intentional errors made in processing their documentation. The managers [who dealt with this issue] acted in the interests of the shareholders whose aim is to considerably reduce the number of international specialists in the company, Dudley said. TNK-BP's oil production may fall in 2008 because of a lack of specialists, he added.
It is also possible that the conflict between BP and AAR has grown more acute because BP is negotiating the sale of 1% of its stake to Gazprom, some sources close to TNK-BP said. Dudley said he knew nothing about such talks.
Kommersant
Severstal to buy controlling stake in West African iron-ore deposit
Severstal, one of the world's leading metals and mining companies, said Friday it had reached agreement to pay $37.5 million for a 61.5% stake in African Iron Ore Group Ltd (AIOG) which owns, through subsidiaries, the exploration rights for an iron ore deposit in the Putu Range area in Liberia, West Africa.
Analysts said long-term project expenses could offset the advantages of the cheap deal.
Although Putu Range contains an estimated 500 million metric tons of iron ore, Severstal officials said investment into the deposit could be recouped after prospecting operations.
Boris Granovsky, director for strategy and corporate development at Severstal Resurs, the mining and scrap arm of Severstal, said the Putu Range could annually yield up to 10-20 million metric tons of iron-ore concentrate if its projected deposits were confirmed.
He said there were plans to export ore to Severstal plants in the United States and Western Europe and to sell it to foreign customers.
Severstal said it expected 40% iron content. According to Maxim Khudalov, an analyst at the Metropol brokerage, Liberian ore could contain up to 57-66% of iron, with the average Russian iron content being 30%.
Severstal pays $0.12 per metric ton of Liberian iron ore, while its Russian companies, namely, iron-pellet producer Karelsky Okatysh in Karelia in northern Russia and the Olenegorsk ore-mining and processing plant in the Murmansk region, also in northern Russia, have to pay $0.93-$0.96 per metric ton.
Yevgeny Ryabkov, deputy analytical-department chief with the AntantaPioglobal Investment Group, said the cheap price of African ore would be offset by high ore-export costs and the lack of regional consumers.
"Although such metallurgical giants as Australia's BHP Billiton and the world's largest steel-maker ArcelorMittal already operate in Africa, the arrival of Severstal seems timely due to rising ore prices," Khudalov told the paper.
However, analysts noted tougher regional competition. Ivan Andriyevsky, managing partner at 2K Audit - Business Consulting, said Chinese investors were interested in African resources and offered more attractive projects due to massive state support.
Vadim Zaitsev, deputy director at RosAfroExpertiza Center specializing in African affairs, said successful regional operations directly depended on relations with African leaders. He said the government of Liberia, one of the poorest African countries, would try and obtain maximum profits from the new investor and would involve Severstal in social projects.
According to Zaitsev, even good relations with local authorities do not guarantee 100% safety, as is proved by the abduction of six Russians working for aluminum giant RusAl in Nigeria last June.
Vedomosti
China finds uranium for its nuclear plants in Russia
Tekhsnabexport (a subsidiary of Russia's Federal Nuclear Power Agency, or Rosatom) and the China Nuclear Energy Industry Corporation (CNEIC) on Friday signed a contract worth $1 billion to build the fourth stage of a uranium enrichment plant in Hanzhong Province, said Rosatom general director Sergei Kiriyenko. The contract provides not only for the construction of a plant able to produce 500,000 separation work units (SWUs), but also for the delivery of six million SWUs of low-enriched uranium from Russia annually for 10 years beginning in 2010.
Tekhsnabexport and CNEIC signed the framework agreement on the building of the plant in November 2007. In 1992-2001, Tekhsnabexport built three production operations in China to enrich a total of 1 million SWUs a year.
A source at the Russian nuclear company said the contract was connected with the construction by Atomstroyexport of another two reactors at the Tianwan nuclear power plant (Russia has already built two). Negotiations on new reactors are going well, said a Rosatom source, but price disagreements remain: Russia built the first two reactors for $1 billion each, while now to build similar reactors cost no less than two billion euros ($3.14 billion). Atomstroyexport spokeswoman Irina Yesipova confirmed the talks were under way with the Chinese corporation JNPS to build the second stage of the Tianwan nuclear power plant.
The initial idea was that the Chinese would enrich fuel for these reactors at plants to be built by Russia, said a Tekhsnabexport source. The plants have not been fitted, however, with the most advanced technology - they will be equipped with sixth-generation centrifuges, while Russia is already producing eighth-generation machines.
Rosatom is active in selling its uranium enrichment services internationally, but a plant built in China will not upset these plans - Russia's enrichment capacities are far too large for that, said Andrei Zubkov, deputy chairman of Trust Bank. Problems may crop up only if the Chinese copy and reproduce the technology, but even so Russia will keep technologically ahead of China.
Business & Financial Markets, Vedomosti
Debtors will not be allowed to use phones and cars
The Federal Court Bailiff Service plans to impose tougher sanctions for persistent debtors, who will not be allowed to rent houses, drive cars or use cellular phones. Lawyers say this measure is illegal.
Bailiffs may currently stop debtors, who are subject to a court order for debt recovery, from leaving the country. According to Artur Parfenchikov, deputy head of the bailiff service, the law on the penitentiary system, which came into force on February 1, 2008, also does not allow debtors to buy tickets to other cities in Russia, use cellular phones, lease housing and drive cars.
Alexander Yermolenko, chief legal adviser at the Corporate Practice Group of FBK-Legal, said Article 64 of the law says bailiffs may "take other measures necessary to execute the enforcing court sentences." In other words, the law does not include an exact list of measures bailiffs may take.
"We are not going to take such measures indiscriminately. Our task is to encourage debtors to comply with court orders," said the bailiff service's press department.
If debtors have no funds in their bank accounts, do not own real estate and have no money, bailiffs may restrict the use of their property rights.
"Nobody is going to seize debtors' cell phones or cars, but we may confiscate their right to use cellular phones," a service spokesman said.
Pavel Sadovsky, an associate at Magister & Partners, a CIS-based international law firm, said: "Under the law, bailiffs must not only arrest debtors' property, but they can value and put it up for auction." But how can they annul a contract signed between the debtor and a mobile operator?
Alexander Kulikov, a lawyer at the Yukov, Khrenov and Partners law firm, said a ban on the right to buy package tours in Russia has nothing to do with the confiscation of property on behalf of the plaintiff. Court bailiffs cannot do this, he said.
Nelli Agarysheva, a lawyer at the Moscow-based law firm Lev Kamenkov and Colleagues, said: "These limitations infringe on human rights and contradict the Constitution."
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