MOSCOW, October 30 (RIA Novosti) Division of Caspian gas postponed / Gazprom to float yen-denominated Eurobonds / Cyber squatters put Sochi-related domains up for sale / Inflation in Russia spins out of control / Migrant workers want access to free Russian healthcare
Kommersant
Division of Caspian gas postponed
All the three major gas pipeline projects in the Caspian region have been suspended. During a visit by Sergei Lavrov, Russia's foreign minister, to Kazakhstan on October 29, his Kazakh colleagues reminded him that discussions on the Caspian gas pipeline had been disrupted.
On the same day, Andre Mernier, Secretary General of the EU Energy Charter Secretariat, stated the failure of the Nabucco gas pipeline project. The future of the trans-Caspian project has long been in doubt.
Russia expected that the Caspian gas pipeline, the largest in the region, would channel Turkmen and Kazakh gas into the Gazprom gas transportation system and then on to the European Union. It is unlikely that recent negotiations were pleasant for Lavrov: Marat Tajin, the Kazakh foreign minister, proposed stepping up the negotiating process. According to some sources in the Kazakh government, Russia is not yet ready to offer commercial terms acceptable for its Central Asian partners.
The Caspian gas pipeline is an alternative to the trans-Caspian pipeline, which Turkmenistan had thought would supply gas via Turkey bypassing Kazakhstan, Uzbekistan and Russia. The project is now suspended for an indefinite period of time.
Gurbanguly Berdymukhammedov, Turkmenistan's new president has said more than once that the project was not cancelled, but it was not being implemented.
Theoretically, the trans-Caspian gas pipeline could become a "partner" project for the European Nabucco pipeline being considered by Turkish, Bulgarian, Romanian, Hungarian and Austrian companies headed by Austria's national energy major OMV.
With the trans-Caspian pipeline, Turkmen and Kazakh gas fields could also become a base for the pipeline, which is capable of producing 31 billion cubic meters of gas a year. Iranian and, to a minor degree, Azerbaijani gas fields could be an alternative.
However, in his interview with the Turkish newspaper Gumhuriyet on October 29, Andre Mernier called Nabucco a stillborn project and stated that it had failed to find a resource base in either of the countries concerned - Iran, Iraq, Turkmenistan, Kazakhstan or Azerbaijan.
Instead of competing actively for Caspian gas, interested parties are being involved in internal negotiating crises. Most probably, the 2010-2011 timeframe for Caspian gas to flow to EU markets via the Nabucco, Caspian and trans-Caspian gas pipelines is unrealistic.
Business & Financial Markets
Gazprom to float yen-denominated Eurobonds
Gazprom yesterday began the roadshow of its debut $440 million yen-denominated Eurobond issue. This is the first time a Russian company has nominated its bonds in the Japanese national currency.
Experts say that the Russian energy giant will use the revenues to repay current liabilities to the Japanese partners in the Sakhalin II oil and gas offshore project in Russia's Far East. They forecast a high demand and low profitability for the issue.
According to experts, Gazprom opted for denominating its Eurobond issue in yen because borrowing in Japan is considerably cheaper than in Europe or the Untied States. The refinance rate there is only 0.5%.
Tatyana Zadorozhnaya, an analyst with the financial company Otkrytie, said: "After borrowing yen, Gazprom may conduct a carry trade transaction, converting its funds into dollars or euros. The loan is not a big one, and so we can assume that there are Japanese investors who want to buy the gas giant's securities."
Nikolai Spassky, a due diligence analyst with independent consulting group 2K Audit-Business Consulting, said Gazprom's decision was made to please a certain group of buyers.
"The company is interested in the Asian Pacific markets. Asian markets are very dynamic, and can most likely ensure a stable growth of demand for the output of the Russian gas holding. In particular, Japan, which is the world's largest importer of liquefied natural gas (LNG), needs Sakhalin gas," Spassky said.
Yury Golban, an analyst with Sobinbank, said that Gazprom probably has obligations to its partners in the Sakhalin II project, and may spend the bulk of the funds it raises from the flotation in yen. "It will save on currency conversion this way and avoid interest risk," he said.
Analysts forecast success for Gazprom's project.
"The bonds will be most likely bought up, especially because state-owned companies are in great demand now," Spassky said.
But Golban believes that Gazprom will have to pay a premium. "This is the gas company's debut yen-denominated issue, and so we can assume that the bonds will be traded at a minor premium to similar securities," he said.
Gazeta.ru
Cyber squatters put Sochi-related domains up for sale
With Sochi nominated to host the 2014 Winter Olympics, a wealth of websites containing the name of the Black Sea resort or the word "Olympics" have been created. Enterprising individuals register such domain names in the hope of reselling them for millions of euros. However, no one seems willing to pay the price as yet.
Andrei Vorobyov from Ru-Center, a major domain name registration center on the Russian Internet said a total of 1,875 Sochi or Olympics-related domain names had been registered.
Cyber squatters, individuals or businesses who register domain names with hopes of reselling them at a premium price, have already put a number of Sochi domains up for sale, including olimpic-sochi.ru for $1.8 million, sochi.info for $773,000, sochi-life.com for around $1 million, olimpiada.sochi.su for $696,000, and sochiolymp.info for $417,000.
Lev Ladik, the present owner of the olimpic-sochi.ru website said he considered the exorbitant prices quite realistic and that he was convinced "the lots would eventually go off."
Experts, however, believe these prices are exaggerated. Vladislav Kochetkov from the Finam brokerage said they would be unlikely to actually conclude thousand- and million-dollar deals. To resell the domains, cyber squatters will have to cut prices to the $10,000-$50,000 mark, the analyst said. Still, even that could be too much.
Vorobyov cited the example of sochi.pro, a website which had been put up for auction at molotok.ru for 2,500 euros, but eventually sold for a mere $300.
There is also a question of whether or not the government would be able to claim these websites through domain arbitration, for example. Alexander Panko, managing partner from the IT Monitoring agency, said he was convinced that the government had no legitimate way of taking over Sochi-related domains.
Officials responsible for the preparations for the 2014 Sochi Olympics disagree with that. A source in the Sochi-2014 bidding committee told Gazeta.ru that words like Olympics, Olympic, Sochi-2014 and all their derivatives were intellectual property of the International Olympic Committee. "They will be legally protected by an Olympics law to be adopted by parliament this year," the source said without clarifying if violators would be actually sued in court or not.
Vedomosti
Inflation in Russia spins out of control
Inflation in Russia has risen higher than at any time over the past few years ahead of the upcoming parliamentary and presidential elections, a time when governments usually make especially lavish promises.
Instead of promising higher pensions, wages and allowances, Finance Minister Alexei Kudrin now says that in industrialized countries "trade unions often decide to contain the growth of wages when food prices start growing."
The minister is wary of clumsy measures that might "provoke the growth of prices after January 1." This sounds incredible against the background of opposition parties' election slogans.
Advocates of Russia's economic policy can point to the fact that many countries have similar problems. According to HSBC, one of the world's largest banking groups based in London, this year inflation in Argentina will be 8.5% (instead of the planned 5%), 6% in Hungary (3%), 7.2% in Turkey (4%), and 2.4% in the Euro zone (compared with last year's 2%).
One of the key reasons for this is a worldwide growth in food prices. This factor has a direct influence on Russia, which imports between 20% and 40% of commonly consumed foodstuffs.
Growing food prices are a global danger not unlike bird flu, and the main election task of the Russian government is to demonstrate its readiness to fight it.
Unfortunately, while trying to civilize the Russian market, it has taken steps that have reduced competition in the food sector and provoked food shortages.
The introduction of the widely criticized database system for alcohol products (EGAIS) in the summer of 2006 led to a collapse on the alcohol market and sent prices up.
Two weeks ago, the government approved a bill that in effect cancels the system, which "has crossed the line [and moved back] to administrative measures, inspections and permits," Kudrin said.
These and other similar measures disrupted the labor market in trade. Russia's immigration legislation was amended in January, making the employment of foreigners in trading outlets more expensive. In April they were prohibited from working in "outside stores," which means at outdoor markets where they could bring foodstuffs from neighboring warmer republics. And in summer a campaign began in Moscow to remove kiosks.
Novye Izvestia
Migrant workers want access to free Russian healthcare
Russian migration services are concerned that the country is receiving more and more foreigners carrying serious infectious diseases. Under new laws, all foreign citizens with TB and hepatitis must be treated; however, migrant workers have started bringing their entire families to Russia.
According to official statistics, 10% of migrant workers have TB and hepatitis. Marina Simonova, an expert at the Sverdlovsk Region migration center, said the Yekaterinburg outpatient clinic was now mostly treating the children of migrant workers who could not afford to pay expensive healthcare bills back home.
Migrant workers from other former Soviet republics first apply for migration cards allowing them to stay for up to 90 days in Russia and then receive work permits, migration center experts said.
Foreign citizens provide fake registration certificates because it takes a lot of time to check their authenticity and to deport violators.
Sergei Kolesnikov, a member of the Presidium of the Russian Academy of Sciences, said outpatient clinics did not have sufficient quantities of doctors and equipment for checking foreigners' health at separate facilities.
Nikita Mkrtchyan, chief migration expert at the Human Demography and Ecology Center, said sick migrant workers were a menace to society, and that they had to be treated.
But he said it was pointless to spend millions of dollars per year on treating foreign citizens, and that it was important to expand relations with their home countries and to conclude agreements stipulating mutual financial commitments.
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