What the Russian papers say

MOSCOW, November 3 (RIA Novosti) Russia and Britain fail to reset bilateral relations / Poll reveals major election fraud in Moscow / Ukrainian president tries to provoke new gas conflict with Russia / TNK-BP may channel all of its net profit into shareholder dividends /

MOSCOW, November 3 (RIA Novosti) Russia and Britain fail to reset bilateral relations / Poll reveals major election fraud in Moscow / Ukrainian president tries to provoke new gas conflict with Russia / TNK-BP may channel all of its net profit into shareholder dividends /

Vremya Novostei, RBC Daily, Nezaivismaya Gazeta

Russia and Britain fail to reset bilateral relations

Russian Foreign Minister Sergei Lavrov on Monday held talks with his British counterpart, David Miliband, the first British Foreign Secretary to visit Russia in the past five years.

The talks were not expected to bring the two countries closer on the key issues dividing them.

Britain's ruling Labor Party has recently been seen as doing poorly, first of all because of its inability to deal with the consequences of the global economic crisis. This means that it will most likely lose the June 2010 general elections, Michael Emerson, associate senior research fellow at the Brussels Centre for European Policy Studies, told Vremya Novostei.

He said that in this situation the cabinet of Gordon Brown could no longer allow relations with Russia, a key political and economic player in the world, to remain lukewarm. The drawbacks of Britain's Russian policy have become glaring against the backdrop of the Russian-U.S. reset policy.

However, key differences have not been removed from Russian-British relations.

"The main irritants - the Litvinenko case and the clampdown on the British Council offices in Russia - have not been dealt with," said Maxim Minayev, a leading analyst at the Russian Center for Current Politics.

Alexei Gromyko, head of the Centre for British Studies at the Russian Academy of Sciences, said the Moscow visit was very important for Miliband.

"The ratification of the Lisbon agreement has led to the creation of the post of EU Foreign Minister in Brussels, and Miliband is considered a favorite for it," Gromyko said. "Therefore, he needed to show that Moscow is prepared to deal with him personally although Russian-British relations are far from positive at the moment."

Natalia Leshchenko, a senior expert at the London-based Institute for State Ideologies (Instid), said: "It will take a strong political will to deal with the case of Alexander Litvinenko, the extradition of Boris Berezovsky and visa difficulties. In principle, there is no dire need for any of this. But Miliband needs to strengthen his personal standing, while the Kremlin wants to rally support for its idea of the European security treaty. And so Miliband allowed the Medvedev team to score a point."

Vedomosti

Poll reveals major election fraud in Moscow

On October 11, the party in power received 20% votes less than was officially reported at the Moscow city legislature election, according to an exit poll conducted by the Levada Center.

The pollster surveyed 1,000 respondents on October 22 through 27 with possible error 5.2%, to reveal that 46.1% of Moscow residents who did go to the polls voted for the pro-Kremlin United Russia; 27.1% said they voted for the communist party, KPRF; 11.8% for the Liberal Democratic Party, LDPR; 7.9% supported A Just Russia, and 3.9% Yabloko. More than half of those polled, 54.7%, said they did not vote at all.

These numbers are in conflict with both the official election results, which gave seats only to the United Russia and KPRF members, with 66.25% and 13.3%, respectively, and the pollster's own pre-election forecasts. A survey of September 28 - October 2 predicted (with a 27.4% voting turnout while the official level was declared 31%) 59.5% support for United Russia, 17.9% KPRF, 8.4% LDPR, 6.4% A Just Russia and 3% Yabloko. The survey was held two weeks prior to the elections. More people decided they would vote between the time of the polling when the survey was held and the actual voting day, and, therefore, opposition parties traditionally use this time to rally support, said Alexei Grazhdankin, deputy director of Levada Center in explaining the discrepancies. This is why United Russia's share of the vote was lower than the survey showed. Another reason for the discrepancy could be the post-election scandals, and some of the respondents could have decided against admitting that they had voted for the ruling party, he added.

However, even taking this into account, the pollster's results suggest colossal election fraud, Grazhdankin said. All of the surveys show voter turnout below the official 31%, around 23%, and United Russia's result no higher than 50%, which means that three or four parties must have received Moscow parliament seats. Therefore, there must have been hundreds of thousands forged or stuffed ballots, Grazhdankin said.

The communist party had conducted its own pre-election surveys, which showed similar results, said Vadim Solovyov, member of the KPRF Central Committee - voter turnout 23%, United Russia 46%, KPRF 28%, and A Just Russia and LDPR also getting seats. This is certainly evidence of election fraud - the officials must have stuffed ballots for United Russia, thus also increasing voter turnout, Solovyov said.

Kommersant

Ukrainian president tries to provoke new gas conflict with Russia

Ukrainian President Viktor Yushchenko on Monday demanded that his government review gas purchase and transit contracts between Ukraine's Naftogaz and Russia's Gazprom.

This would allow the Russian gas export monopoly to take harsh measures against Ukraine. However, cutting off gas supplies ahead of the Russia-EU summit on November 18 would provoke an international scandal and improve the rating of the Kremlin's adversary, Yushchenko.

Yushchenko claims that Ukraine's contractual obligation to buy 52 billion cubic meters of Russian gas annually is excessive and should be cut to 25 billion cu m. He also said the transit fee must be raised from $1.70 to $2.60-$2.80 for 1,000 cu m per 100 kilometers. And lastly, he said the sides must be equally responsible for failure to honor contractual obligations.

The January 19, 2009 agreement stipulates greater obligations for Ukraine.

Yushchenko has taken a fail-safe move. Analysts say Russia is unlikely to cut off gas supplies at the height of the presidential campaign for the January 17, 2010 elections in Ukraine.

Konstantin Simonov, head of the Moscow-based National Energy Security Foundation, said Russia's aggressive response would play into Yushchenko's hands, providing him with reasons for accusing Moscow of conducting a hostile policy.

"Like Boris Yeltsin in 1996, Yushchenko has only a 3% public support rating at the beginning of his election campaign," Simonov said. "He needs an enemy threatening the nation and capable of rallying the people around him. Yushchenko has only one enemy, Russia."

Moscow does not need a gas war with Ukraine now because a Russia-EU summit will be held in Stockholm on November 18. Cuts in gas supplies to Ukraine would inevitably affect deliveries to European consumers and could provoke an international scandal.

At the upcoming summit Russia hopes to sign an agreement it proposed on the mechanism of early warning about gas conflicts to prevent them in the future. A gas war with Ukraine will not help Russia convince its European partners to accept the proposal.

"If Moscow stops gas supplies, it will punish itself," said Vadim Karasyov, head of the Kiev Institute of Global Strategies.

Vedomosti

TNK-BP may channel all of its net profit into shareholder dividends

TNK-BP Holding, the head company of the Russian-British oil venture, plans to pay 114 billion rubles ($3.9 billion) out to its shareholders as interim dividends, which is much more than the company paid them in 2008.

TNK-BP Holding is one of two large companies partly owned by Alfa Group, which decided to pay interim dividends this year. The other company is mobile operator VimpelCom.

A source close to TNK-BP confirmed that the company's board of directors recommended that the shareholders approve January-September dividends of 7.41 rubles per one ordinary and preference share, which constitutes 114.4 billion - almost the entire profit for the three quarters of 2009.

The company has not yet published its nine-month financial results. Its January-June US GAAP net income was $2.34 billion (before subtracting the minority's share), or 77.85 billion rubles at an average exchange rate for the period. Denis Borisov, a Solid brokerage analyst, estimated the company's nine-month profit at about 120.53-127 billion rubles ($3.7-3.9 billion) at the currency exchange rate at that time.

TNK-BP has always been generous when it comes to shareholder dividends. In 2007, the company paid out a total of 49.6 billion rubles, or the entire net profit for that year; in 2008, 82.5 billion (also 100% of net profit).

Nearly all of the funds will eventually go to TNK-BP International, a company 50% owned by BP and 50% by a consortium of Alfa Group, Access Industries and Renova, which must pay its shareholders 40% of its profits. The company's US GAAP net income in the first six months of this year was $2.01 billion, which means the company should pay its shareholders slightly over $800 million for January-June.

Alfa Group controls 25% of TNK-BP International, which means the company will receive about $200 million. The group needs the money to make payments on its VEB loan, which it took out to refinance a Deutsche Bank loan secured earlier with a 44% stake in VimpelCom. The stake is currently pledged with Vneshekonombank (VEB), to which Alfa owes $1.5 billion in a year. The group plans to repay $500 million of that amount with dividends paid by two telecoms companies, VimpelCom ($147 million at the current Central Bank rate) and Kievstar ($360 million).

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