What the Russian papers say


MOSCOW, July 13 (RIA Novosti) Coalition without Tymoshenko / Moscow, Washington in hurry to agree on Russia's WTO accession / Suspected killers of Magadan governor found in Spain / Rosneft ends IPO applications

(RIA Novosti does not accept responsibility for the articles in the press)

MOSCOW, July 13 (RIA Novosti)



Coalition without Tymoshenko

Ukraine's President Viktor Yushchenko has decided to deal with the Party of Regions led by Viktor Yanukovych. Outraged, Yulia Tymoshenko has called for early parliamentary elections and protest actions.

Secret talks were held Wednesday between pro-presidential bloc Our Ukraine and the opposition Party of Regions in the secretariat of the president. The Yulia Tymoshenko Bloc was not invited.

The details of the talks were not disclosed, but Yanukovych hinted that his party started forming a coalition with Our Ukraine.

Taras Chornovil of the Party of Regions told popular daily Vedomosti that Our Ukraine did not want new elections. "The pro-presidential bloc will not overcome the election barrier single-handed," he said, and joining forces with Tymoshenko would amount to Yushchenko's "political capitulation."

Yushchenko has said he was against new elections and yesterday he set the Party of Regions a new condition: the new prime minister should be a compromise figure capable of consolidating parliament.

"The president's team has probably advanced its own candidature as the main condition for forming a coalition with the Party of Regions," said Kost Bondarenko, director of Kiev-based Institute for Management Problems.

The Tymoshenko Bloc and the Pora public movement did not wait for the president's decision to officially announce a campaign of civil disobedience. A tent camp appeared in the central Independence Square yesterday, but in the evening the Kiev administration decided to dismantle it.

Experts said Yushchenko would not listen to Tymoshenko.

"There are no constitutional grounds for dissolving parliament," said Volodymyr Fesenko, head of the Penta applied research center.

Ilko Kucheriv, head of the Democratic Initiative research center, said a precedent with early elections would enable the Tymoshenko supporters to demand an early presidential vote.

He said Tymoshenko's protest actions would not split the parties of Yushchenko and Yanukovych, because "Ukrainians are disillusioned with the results of the 2004 'orange' revolution."

Nezavisimaya Gazeta

Moscow, Washington in hurry to agree on Russia's WTO accession

Russian Economic Development and Trade Minister German Gref and U.S. Trade Representative Susan Schwab could finish their two-day round of talks on Russia's accession to the World Trade Organization in Moscow today. The United States is the only country Russia has not completed talks with. Recently, top officials in Moscow and Washington have been hinting that a compromise has been found and now they have only to deal with formalities.

However, the newspaper's source in the Russian Economic Development and Trade Ministry said yesterday that the parties still had "many unresolved issues and problems." Talks are continuing all but around the clock to be completed before the meeting of Russian President Vladimir Putin and U.S. President George W. Bush at the G8 summit, where they could sign the protocol. So the negotiators decided to "save" time by not talking to the press. The agreements will probably not be announced until Friday.

At the beginning, the United States made some tough requirements that Moscow refused to meet. Among other things, America wanted Russia to liberalize its financial sector, to reduce or, better, abolish import duties on new airplanes, to protect intellectual property rights, etc. The parties stuck to their positions and even tried to deliver ultimatums.

Eventually, both Moscow and Washington had to make concessions, unofficial sources said. There has been a leak that the parties agreed that the United States would give up its demand on tougher protection of intellectual property and free access to the Russian market for foreign lending institutions. Russia, in its turn, will not ask for a seven-year moratorium on foreign capital access to its insurance market.

Moreover, Russia is said to be willing to cut support to domestic agricultural producers. Gennady Gorbunov, chairman of the agriculture committee of the parliament's upper chamber, spoke very negatively about such a possibility in an interview with Nezavisimaya Gazeta. He said he did not believe that this decision could be made without consultations with the Agriculture Ministry. "Even $9.2 billion subsidies set earlier was not enough, but if this sum is reduced, domestic agriculture will be in trouble," he said. "We cannot let this happen."

Another concession on Russia's part could be U.S. companies' access to the development of the huge Shtokman gas condensate field in the Barents Sea, according to reports in U.S. and British media. Gazprom, the Russian gas giant that holds license for the field, has continually postponed an announcement on which foreign investors will be involved in developing the field, which has estimated reserves of 3.2 trillion cubic meters of gas. The delay could be linked to the WTO talks. Andrew Somers, head of an American Chamber of Commerce Russian delegation, said there was a chance that one or two U.S. companies would be involved in the project.

Maxim Shein, head of analysis with BrokerCreditService, a Moscow-based brokerage, told the newspaper that foreigners, including Americans, could receive access to Shtokman because of geopolitical realities, when the struggle for resources is becoming tougher, energy producers are receiving access to consumer markets, and consumers are allowed to develop fields. "This is a necessary exchange in such circumstances," he said.

However, neither politicians nor experts are positive that the current talks will be successful.

Vremya Novostei

Suspected killers of Magadan governor found in Spain

The Spanish authorities announced yesterday the arrest of two Russians, Alexander Zakharov and Martin Babakasyan, in Marbella. The Russian Prosecutor General's Office, which claims the two men killed Magadan Governor Valentin Tsvetkov, will send an extradition request to Spain in the next few days.

Valentin Tsvetkov was shot on October 18, 2002 in downtown Moscow, at the office of the Magadan Region on Novy Arbat. The prosecutors who investigated the case came to the conclusion that Tsvetkov, Viktoria Tikhacheva, the owner of several fishing companies, and Yury Moskaltsov, deputy head of the State Committee for the Fisheries, were involved in fish machinations.

However, they could find no proof for this version, and Tikhacheva and Moskaltsov were charged with fishing quota frauds and sentenced to probation.

In 2003, they tracked down Armenian swindler Artur Anisimov, who was viewed as a key figure in the shadow fishing business in the Kolyma region in the northeast of the Siberian republic of Sakha (Yakutia). Anisimov controlled several private security firms that protected fishing companies, including Viktoria Tikhacheva's.

Anisimov was summoned for interrogation and arrested in April 2003. A Moscow district court sentenced him to three years in prison for fraud, but he still features in the case of the governor's murder.

In all, seven suspects were put on the wanted list: Yevgeny Kovalev, Konstantin Korshunov, Masis Akhunts, Sergei Gordiyenko, Yury Rashkin, Alexander Zakharov and Martin Babakasyan.

According to the prosecutors, in March 2002 these men, led by Anisimov, settled in the Troitskoye village of the Mytishchi district outside Moscow. For six months they tracked the governor's movements, planning the assassination.

The prosecutors have suggested that on October 18, 2002 Zakharov, who was watching Tsvetkov's flat in Petrovka in Moscow, reported to Anisimov that the governor and chief of the Magadan office in Moscow Pyotr Shapka left for the office.

Anisimov relayed the information to Akhunts, stationed across from the office in Novy Arbat, who alerted the killer who stood at the office entrance.

Sergei Filippenko, who shot the governor, was detained in summer 2003. Masis Akhunts was arrested in November 2004. But the other suspects evaded the prosecutors, who knew that the team split in two immediately after the murder. One group went to Armenia and on to the United Arab Emirates, while the other group traveled to Western Europe via Ukraine.

According to the staff of the Russian Embassy in Madrid, Babakasyan and Zakharov were detained in the evening of July 7 by a local organized crime squad, who held an international warrant for their arrest on suspicion of murder.

"The suspects lived in luxury villas in close proximity to each other in Bahia de Marbella," the embassy sources said. "They showed the police falsified documents and claimed to be innocent citizens. But their genuine documents were found in the villas. The local authorities informed Russia of their detention on Tuesday evening [July 11]."


Rosneft ends IPO applications

On Wednesday, state-owned Russian oil giant Rosneft stopped accepting applications for its initial public offering. The final price of a Rosneft share will be made public on Thursday or Friday.

Experts told the paper on Wednesday that the minimum share price had been raised to $7.15. The paper's sources said this decision was made by the leading IPO coordinators - ABN Amro, Dresdner Kleinwort, JP Morgan and Morgan Stanley - and Rosneft. The company's capitalization will total at least $67.8 billion and the company will earn at least $12.55 billion from the 1.756 trillion shares it sold.

But the minimum share price scared away certain groups of investors. Sergei Danilyuk, managing director at Ak Bars Finance brokerage, said most clients were ready to pay about $6 per share.

He said about a third of corporate clients, mostly speculators, had either changed their mind or remained undecided. "About 50% of our clients, i.e. major clients who are ready to invest for the long term, remain undecided," said a broker from another company.

The latest market-demand survey showed that Rosneft has an even higher capitalization of $73 billion, which places it on the same level as LUKoil, the largest oil company in Russia. By charging $7.7 per share, Rosneft may therefore earn $13.5 billion. Consequently, Rosneft's parent company, Rosneftegaz, could repay its $8.5 billion debts and earn another $2 billion. And Rosneft would collect over $3 billion from additional issues.

The company said Wednesday that it would spend the money on overhauling its refineries and on oil production investment. Kommersant sources said Rosneft was negotiating the purchase of blocking stakes in energy companies in Bashkortostan, a Russian republic in the Volga region, from AFK Sistema financial corporation, which declined to confirm these reports. But sources close to the government of Bashkortostan said the talks were being held.

Analysts said the maximum price of each Rosneft share would reach $7.85. Vladimir Vedeneyev from the Bank of Moscow quoted sources close to Rosneft as saying that share applications of strategic investors account for $6 billion. The company raised about $5 billion through portfolio investment; and private individuals contributed another $1 billion. "I believe portfolio investors and strategic investors will account for $3-4 billion and over $6 billion each," said Vedeneyev.

Foreign majors, China National Petroleum Corporation, British Petroleum and Malaysia's oil and gas giant Petronas, wanted to invest about $5 billion in the Rosneft IPO. The Oil and Gas Corporation of India planned to invest up to $3 billion and a spokesman for India's Ministry of Petroleum and Natural Gas said on Wednesday that an application was likely.

Some analysts said strategic investors apparently tended to overestimate the gains from taking part in the IPO. Vladimir Milov, president of the independent Moscow-based Institute of Energy Policy, said they wanted to take part in running the company and controlling oil production, but that would not happen.

"They are courting Russian authorities and are forgetting the example of German energy giant E.ON Ruhrgas, which has a stake in Gazprom, but does not control the Yuzhno-Russkoye gas field [in northern Russia]," said Milov.

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