MOSCOW, May 11 (RIA Novosti) Washington offers Moscow package deal on European ABM/ Central Asian gas prices to be determined in Russia, not in the European Union/ Deripaska set to take over Chrysler Group/ State companies take over Yukos's strategic oil and gas assets/ Russians think they will have no choice over parliament - opinion poll
Kommersant
Washington offers Moscow package deal on European ABM
U.S. Congress has unexpectedly given support to Moscow, which is opposing Washington' plans to deploy ballistic missile defense systems in Europe.
The U.S. House Armed Services Committee decided to cut ABM allocations by $764 million, in particular by refusing funding for the deployment of interceptor missiles in Poland.
The conflict between U.S. Congress and the administration suits Moscow, which believes that Washington is using the ABM plan to move its missiles closer to Russia's border. Many Russian politicians are satisfied with the decision by Congress.
Andrei Kokoshin, former Secretary of the Russian Security Council and currently a deputy in the lower house of parliament, said: "People who are ready to listen to the voice of reason have appeared in U.S. Congress."
Mikhail Margelov, head of the upper house's Committee on International Affairs, said shortly before the budget vote in U.S. Congress: "A considerable number of American politicians have always been wary of ABM, which they view as a Panama swindle used to camouflage the squandering of budget funds. The American elite is divided [over the issue]."
Moscow will make use of this immediately. According to the Russian Foreign Ministry, "ABM should become a key issue on the agenda of the Moscow visit by Secretary of State Condoleezza Rice on May 14-15."
"I wonder what Ms. Rice will say about the crippling cuts in allocations to the program?" a Foreign Ministry source told the popular business daily Kommersant.
There are reasons for Moscow's optimism. Last Friday Daniel Fried, Assistant Secretary for European and Eurasian Affairs, proposed that the two countries' foreign and defense ministers meet in September to discuss ABM, the Treaty on Conventional Forces in Europe, START-1, and modernization of Trident warheads.
According to Russian diplomats, this is an attempt to bargain for Russian concessions on ABM under a package deal. However, Fried made his statement before the congressional refusal to finance ABM deployment in Poland.
Now Washington will have to pay a higher price for Moscow's potential concessions.
Gazeta
Central Asian gas prices to be determined in Russia, not in the European Union
The Kremlin had to bargain with Kazakhstan's President Nursultan Nazarbayev in order to persuade him not to participate in plans to deliver Central Asian oil and gas to the European Union bypassing Russia.
Nazarbayev has agreed to the Russian price for challenging the EU and decided to accompany Russian President Vladimir Putin to Ashgabat and try to jointly persuade Turkmenistan's leader Gurbanguly Berdymukhammedov [to follow suit].
According to unofficial information, Turkmenbashi's successor is ready for a compromise if Turkmen gas is also reasonably priced and if Turkmenistan is allowed to somehow control export flows via Russian territory.
If the trilateral "lineup" takes place, there will be no hope for the EU. The only alternative to the present Russian gas pipelines and also to the North European Gas Pipeline (NEGP), which has yet to be built, will be the Blue Stream-2 pipeline also owned by Gazprom. Therefore, gas prices will be determined in Russia, not in the European Union.
Well-known Russian economists express their view on the matter.
Vasily Duma, member of the commission of the Federation Council (the Russian parliament's upper house) on natural monopolies, said: "Turkmens may prefer Russian pipes, while Kazakhs might not, because in Turkmenistan all national assets belong to the state and in Kazakhstan mineral deposits are owned by American and British companies. Surely, we have good relations with Kazakhstan, but the country is making progress and developing its deposits without Russia."
Anatoly Dmitriyevsky, director of the Institute of Oil and Gas of the Russian Academy of Sciences, said: "Russia and all Central Asian republics have a common energy future because this region accounts for 8% of the world's proven gas reserves and for considerable oil reserves. The expansion of the Caspian Pipeline Consortium (CPC) is an obvious need, especially in connection with the building of the Burgas-Alexandroupolis oil pipeline. As regards gas, the region's resources will make it possible to use more efficiently the operating Central Asia-Center gas pipeline. Besides, new opportunities will appear for gas supplies to China."
Viktor Baranov, president of the Independent Gas Producers Union: "The old friend is better than two new ones. And when this friend has considerable possibilities (a pipeline infrastructure for instance), why look for a bird in the air having a feather in the hand? Yet another invitation of Turkmenistan and Kazakhstan to a closed European club will prove a deception of all. I hope our Central Asian partners will be wise enough not to take cue from Western institutions dealing with energy policy."
Business & Financial Markets
Deripaska set to take over Chrysler Group
Oleg Deripaska, Russia's second richest man and owner of Russkiye Mashiny (Russian Machines), the automotive division of his industrial holding Basic Element, is ready to buy a stake in Canadian auto component maker Magna for $1.54 billion.
Analysts explained Deripaska's interest by the fact that Magna is the front-runner in the bidding to grab a significant stake in U.S. carmaker Chrysler Group, a loss-making division of automotive giant DaimlerChrysler AG.
The Magna board approved the deal, which must also be given the green light by a shareholders' meeting. Under the deal, a new holding company, due to be established in Canada, will own a controlling stake in Magna, whose other shares will be listed on the Toronto and New York stock exchanges.
Russkiye Mashiny and Canada's Stronach Trust, the majority Magna shareholder, will have equal stakes in the new company.
After the deal is closed, the Russian company will receive a 20% stake in Magna and will appoint six out of the 14 board members.
Under the deal, Russkiye Mashiny will buy a 50% stake in a consultancy affiliated with Stronach & Co. and will receive 50% of consultative-service royalties from Magna.
Sevastyan Kozitsyn, an analyst with Broker Credit Service, said Russkiye Mashiny would be able to expand its global operations through Magna. For instance, the Canadian company could establish foreign dealer and service centers for automaker GAZ Group, also controlled by Deripaska, and help master production of Maxus vans at the U.K.-based LDV plant, which is owned by Russkiye Mashiny.
However, Deripaska's desire to co-manage Magna could conceal even more ambitious plans.
Maxim Ivanov, an analyst with Tsentrinvest Group brokerage, said the possible purchase of Chrysler Group by Magna could have influenced the decision of Silovye Mashiny to take part in the deal.
Ivanov said the Russian company, which bought a license to produce Chrysler Sebring and Dodge Stratus cars last year, plans to expand cooperation with the U.S. automaker.
Vedomosti
State companies take over Yukos's strategic oil and gas assets
The majority of Yukos's assets have been sold. It does not matter who gets the remaining bits, since the results of a re-division of property have formalized a new lineup of players in the oil and gas sector and new rules of the game for big business.
State-controlled oil company Rosneft won four of the 10 Yukos auctions, surging far ahead of others in oil production and refining. It was ranked 8th before acquiring Yuganskneftegaz, the main oil producing assets of Yukos, in 2004.
There were few surprises at the auctions. For example, the second lot consisting of Yukos's gas assets and a 20% stake in Gazprom Neft (formerly Sibneft) went to Italy's energy companies Eni and Enel, which had granted gas monopoly Gazprom a buy out option ahead of the auction.
The only major lot (worth more than 5 billion rubles, or $193.95 million) that went to a private company was Yukos's retail network of 537 filling stations. A dark horse company Unitex, which is reportedly connected with Gazprom's financial arm, Gazprombank, bought it for 12.4 billion rubles ($480.99 million).
If Unitex really is a part of Gazprom's structure, this means that all strategic oil and gas assets of the former darling of the Russian oil market have been taken over by state-run companies, Rosneft and Gazprom.
The results of Yukos auctions have confirmed the global trend: the number of state-controlled oil and gas companies is growing, not only in Russia, although methods may vary. However, the auction procedure in Russia has cast a bright light on specific elements of state capitalism in this country.
State-controlled companies and their close partners are entering the market at a discount and without any bargaining, whereas private companies have to play according to the rules, paying in full for the bits and pieces they get after the state-run giants have had their fill.
Vremya Novostei
Russians think they will have no choice over parliament - opinion poll
Public opinion polls indicate that Russians think that the elections to the State Duma in December will be rigged and will not reflect the will of the people. But a decline in parliament's legitimacy, according to analysts, for the time being is not threatening tension in relations between the government and the people.
A poll conducted by the Levada Center in April indicated that most respondents anticipate irregularities in the Duma elections. More than one third, 39%, said regional election commissions would rig the elections. Respondents said voters would be bought by the authorities, 33%, or by the opposition, 30%; 26% of respondents believe the candidates disliked by the authorities will be excluded from the lists. The same number said the parties currently in power would have the advantage in the election campaign and unwanted parties would be barred from the elections. Vote rigging by the Central Election Commission was predicted by 23%, and only 8% of respondents said that the Duma elections would be fair.
Some 65% of respondents would like the "none of the above" option to be returned to the ballot papers. According to the Levada Center, in 2004 the number of supporters of the option was 5% less.
"Today, declining credibility in authorities will have no effect, but such an approach has long-term dangers - the authorities are losing credibility and are becoming detached from society. One should bear in mind that Ukrainians took to the streets because they did not believe the elections would be fair," said Dmitry Oreshkin, a leading expert with the Institute of Geography of the Russian Academy of Sciences.
A poll conducted in late April by VTSIOM shows that the 7% threshold needed to enter parliament for the time being could be cleared only by United Russia, 44% of respondents, and the Communist Party, 9%. Just Russia had 6% of supporters and the Liberal Democratic Party - 5%. 17% said they did not intend to vote and 14% were undecided.
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