What the Russian papers say


MOSCOW, April 11 (RIA Novosti) Tymoshenko may opt for anti-Russian policy/Estonia attacks North European Gas Pipeline/Russia to supply more multiple launchers to India /TMK, Interpipe in merger talks/Yukos petrol stations sold cheap

Vremya Novostei

Tymoshenko may opt for anti-Russian policy

Western policy toward Russia has a new supporter, writes a prominent Russian analyst.
Fyodor Lukyanov, editor-in-chief of the magazine Russia in Global Politics, writes that Yulia Tymoshenko, the leader of the Ukrainian opposition, has contributed an article about containing Russia to Foreign Affairs, a U.S. journal of global current events, foreign policy and international relations published by the Council on Foreign Relations.
The idea has been widely discussed in the West, but Tymoshenko has formulated her complaints against Moscow in a concise and logical manner, Lukyanov writes.
Most importantly, she has answered the question Western strategists and analysts have been asking themselves: How does one deal with a Russia that has shaken off the effects of the 1990s crisis sooner than anyone expected?
The Ukrainian politician writes that the Kremlin has lost its sense of proportion because of its huge oil and gas revenues.
According to Tymoshenko, it can be brought to its senses only by a coordinated Western policy on all issues, from democracy, Chechnya and Kosovo, to the transit protocol to the Energy Charter, Iran and Russia's behavior toward its neighbors.
Nobody has so far openly advocated a new containment policy toward Russia, Lukyanov writes.
The strategic partnership of Russia and the West, born in the ruins of the Soviet Union, is still in place.
However, the Russian analyst presumes that Tymoshenko will find many supporters, and her article will provoke a stream of responses on both sides of the Atlantic.
Tymoshenko's article leaves the impression that she wrote it with the assistance of compatriots of George Kennan, reputedly the chief ideologist of the Cold War.
The publication of the article at the height of the new Ukrainian crisis speaks volumes.
The era of Viktor Yushchenko, a weak leader with a tendency for compromise, is ending, Lukyanov writes. Tymoshenko, as the brightest and most uncompromising ideologist of the "orange revolution," is taking over the lead.
According to the Russian expert, Tymoshenko's article points to her readiness to opt for a tough anti-Russian policy and for spotlighting, rather than smoothing over, geopolitical differences.
In this situation, Moscow may yield to the temptation to interfere in Ukraine, which may open a new game.

Rossiiskaya Gazeta

Estonia attacks North European Gas Pipeline

The Estonian parliament will consider a bill that proposes extending the country's territorial water by three miles. Its initiator does not conceal that it seeks to disrupt the construction of the Russian-German gas pipeline across the Baltic Sea floor.
"We need to go back to the question of restoring Estonia's territorial waters to what they were before 1993," said Igor Gryazin, MP of the ruling Party of Reforms, in an interview with Rossiiskaya Gazeta.
"At that time, Estonia and Finland voluntarily reduced their territorial waters by three miles," he said.
He did not deny that the change would affect the North European Gas Pipeline being laid across the floor of the Baltic Sea, because in that case the route would go across Estonian territory.
The Estonian authorities criticized the launch of the NEGP project, because after its construction Estonia will no longer be a transit state for Russian gas.
In 2005, opposition parties urged parliament to consider extending the country's sea borders by 12 miles. At the time it was to no avail.
If adopted, the new bill can be implemented unilaterally based on the UN Convention on the Law of the Sea, which does not require the agreement of other states, Gryazin said.
As a member of the Convention, Estonia has the right to set its territorial waters up to 12 miles, said Professor Kamil Bekyashev, chair of the international law department of the Moscow State Law Academy.
However, he believes that the 1982 Convention and bilateral agreements with neighboring countries have to be taken into account.
If the coasts of the two states are opposite each other or adjacent, none of the states has the right to extend its territorial sea beyond the median line, he quoted the Convention as stipulating.
The Russian-Estonian agreement, signed in 2005, reads that any demarcation of the sea should be subject to talks and trilateral agreements between Estonia, Russia and Finland.


Russia to supply more multiple launchers to India

The first shipment of Smerch multiple rocket launcher systems will be sent to India any day now.
Last week, Rosoboronexport, a Russian arms export agency, and the Indian Defense Ministry signed a new option contract to deliver $300 million worth of the systems.
The total value of the supplies will be $750 million. Thus, the deal will become one of the largest export sales of Russian weapons for land forces.
The initial contract for the delivery of 38 rocket launchers made at Motovilikhinskiye Zavody was concluded with the Indian Defense Ministry December 31, 2005.
It is estimated at $450 million, including the cost of combat vehicles, auxiliary equipment, fire control systems, personnel training, and a commission for Rosoboronexport.
The first shipment was to have been sent in the spring of 2006, but the Indians had their doubts as to whether the vehicle's engine could maintain a maximum speed of 80 km/hr (50 mph).
The doubts were eventually laid to rest, and shipments under the current contract are to be completed in 2008.
The new $300 million agreement envisages the supply of two more batteries (24 units) by 2010.
In money terms, Smerch deliveries to India are equivalent to the sale of 310 T-90S tanks to India in 2001.
Smerch talks were reopened after the 2002 Indo-Pakistani armed conflict, said Vinay Shukla, the Moscow bureau chief of The Press Trust of India.
According to him, the Indian military views these systems as high-precision tactical non-nuclear rocket weapons, and considers them a good deterrent for Pakistan.
Apart from India, only two other countries have taken Smerch deliveries - Algeria in 1999 (18 units) and Kuwait in 1996 (27 units).
"This is a high-powered and relatively low-priced system, and Algeria, Syria, Libya, Venezuela and Malaysia are likely to order it," said Konstantin Makiyenko, deputy director of the Center for Analysis of Strategies and Technologies.


TMK, Interpipe in merger talks

TMK, Russia's largest pipe producer, and Ukraine's Interpipe are in talks on a possible merger, a move that would create a company with a capitalization of about $10 billion, according to sources familiar with the talks. However, experts are skeptical about the prospects of the deal.
Vyacheslav Zhabin, an analyst with Broker Credit Service, said TMK was too strong a company to be really interested in the Ukrainian rival.
"TMK has great prospects and almost guaranteed orders," he said. "The only argument in favor of this version can be competition on the domestic market."
Indeed, the Ukrainian pipe producer competes with TMK on the Russian market. However, that problem could be easily resolved with the help of political leverage, Zhabin said.
Interpipe, however, may have an interest in such a deal, first of all because of the complicated political situation in the country.
Another change of government could result in a new wave of re-privatizations, and it is quite possible that Interpipe's owner, Viktor Pinchuk, who is the former Ukrainian president's son-in-law, wants to make sure he will not lose the asset.
It is quite easy to get TMK interested in the merger - all that is needed is a good price.
Besides, Interpipe plans an initial public offering (IPO) in 2008. Perhaps, it will be easier to do it as a TMK subsidiary, because the Russian company is already listed on the London Stock Exchange.
Stanislav Fomenko of Veles Capital said the synergetic effect from the deal would be minimal.
He estimated TMK's capitalization at $7.8 billion and Interpipe's at $1.4 billion. The merged company would cost about $9-$10 billion.
"That is horizontal integration," he said. "Both companies manufacture similar products, so there can be no talk of synergy."
However, he said the merger might have been initiated by TMK.
"Given total globalization, it would not be surprising if TMK wanted to expand in Ukraine."


Yukos petrol stations sold cheap

So far, buyers have paid liberally for the assets of the Yukos oil company, which was declared bankrupt last summer. Now, however, Yukos petrol stations and petroleum storage depots have been sold off for at least a third of what they cost, experts said.
Last week, the Yukos creditors' committee decided to auction off nearly the entire network of Yukos petrol stations.
The twelfth lot included Yukos's stakes in 37 companies with its petrol stations and petroleum storage depots on their books, including the most attractive "bits," i.e. 80 petrol stations in Moscow and the Moscow Region.
The lot is to be sold May 10, and its starting price will be 7.74 billion rubles (nearly $298 million).
Buyers are prepared to pay $4-5 million for each petrol station in Moscow, said Grigory Sergiyenko, managing director of the Russian Fuel Union. Therefore, 80 Yukos petrol stations could fetch at least $320 million. A petrol station in the regions will cost from $400,000 to $1 million.
The lot was, indeed, priced very modestly, said an oil company's manager. In his opinion, Yukos petrol stations cost less - the ones in Moscow cost from $2 million to $4 million, and the ones in the regions could go for about $500,000 on average.
Therefore, the petrol stations put up for sale (even without petroleum storage depots) should cost between $388.5 and $548.5 million.
The creditors' committee was guided by the valuation data presented by the valuators consortium, headed by the Roseco rating company, said Nikolai Lashkevich, press secretary of the Yukos bankruptcy receiver.
Yevgeny Neiman, Roseco's director general, said that for the auction they valued Yukos's stakes in dozens of closed companies and limited-liability partnerships with their numerous problems and debts, not petrol stations and petroleum storage depots.
Therefore, it would be wrong to compare the valuation data with the latest transactions on concrete petrol stations.
If the state-run oil company Rosneft buys the Yukos network of petrol stations, it will be listed with the 10 largest Moscow petrol suppliers, said the vice president of the Russian Fuel Union, Alexei Nebolsin.
Rosneft has very few petrol stations in Moscow, working mostly on a franchise basis.
Upon purchasing the Yukos network, Rosneft will outstrip Lukoil in this area, he said.

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