MOSCOW, November 23 (RIA Novosti) United Russia slams 1990s policies with pre-election fervor / Ashgabat promises Moscow two gas pipelines / Russian bureaucrats fail to persuade British company to part with blocking stake / Russia, Saudi Arabia set to sign $4 billion arms contract / Russia qualifies for Euro-2008, wins 1 bln pounds sterling
United Russia slams 1990s policies with pre-election fervor
Harsh criticism of the government policies pursued in the 1990s was the centerpiece of a speech made Wednesday by Vladimir Putin, head of the pro-Kremlin United Russia's party election list.
It also appears to be the foundation of the party's election platform. However, opposition leaders said the Kremlin was panicking over a lack of certainty with the election day so close.
The occasion was the first time that President Putin had spoken at a stadium, and he made a bright and memorable speech. Before that he had never spoken to such a large audience, never made such a long speech as a candidate running for parliament. Furthermore he had never blasted his foes within the country so ruthlessly and bluntly.
It made a sharp contrast with the vague rhetoric used by the party he has ventured to lead to elections. The half-hearted reiteration of the same chants, such as "Putin's plan," "Russia's victory," "a united country," no longer touches a chord in anyone's heart or mind. Almost everyone has heard about "Putin's plan" at least once, but no one seems to know what it is about, the party members least of all.
Ivan Melnikov, deputy head of the Communist Party, said the pro-Kremlin party, with its ambition to sweep 70% of the vote, simply had no other choice but to build its campaign upon an aggressive condemnation of the 1990s.
"They are becoming hysterical," said Boris Nemtsov, a member of the political council of the Union of Right Forces (SPS), adding that in the 1990s, "Putin himself had been close to the oligarchs, friends with [Boris] Berezovsky and [Vladimir] Gusinsky."
According to Nemtsov, Putin once said to him in the late 1990s: "What are you fighting them [the oligarchs] for? They are the power!"
Boris Yeltsin never spoke to crowds, but he, too, had skillful image-makers. No one has yet outmatched his "Vote with your heart" formula.
Putin's image-makers have merged their predecessors' experience with the best U.S. practices, where large-audience appearances are common. While criticizing "the enemies," who once stripped the Soviet people of everything, including soap and matches, were now begging at foreign embassies in a bid for support that they lack in their home country, and were probably masterminding a future "oligarch coup," Putin truly targeted people's hearts, not minds.
If one's mind began mulling over his statements, it might have produced some unnecessary questions. For example, one might become interested in which party the current prime minister, Viktor Zubkov, so praised by the president, had carved out a career - was it not the one which brought the country to a shortage of soap?
The appeal to vote with one's heart is still working. Since no one could find a different motivating slogan to make people's hearts beat faster with joy (well, the federal budget is already stretched to the limit), a speaker still could make them accelerate with hate. Then their minds will vote against all - for one candidate alone.
Ashgabat promises Moscow two gas pipelines
On November 22, Turkmenistan's President Gurbanguly Berdymukhamedov tried to dispel doubts about his country's readiness to build the Caspian pipeline towards Russia and increase the capacity of the operating Central Asia-Center gas pipeline by 20 billion cubic meters a year.
Experts say that despite a delay in signing an agreement on the Caspian pipeline construction, both projects will be implemented.
Though the statements made are favorable for Russia, doubts still remain about Turkmenistan's ability to meet all earlier obligations in the gas sector. Modernization of the Central Asia-Center gas pipeline will increase its annual capacity to 70 billion cubic meters a year, and the construction of the Caspian pipeline will add another 10-20 billion to that figure. The plans to annually supply 30 billion cubic meters of gas to China and 7-14 billion cubic meters to Iran cannot be ignored either, nor can plans to build the trans-Caspian gas pipeline across the Caspian seabed to Azerbaijan and link it to the Nabucco pipeline (which is being projected now) in order to supply 30 billion cubic meters of gas a year to Europe.
"Turkmenistan will not be able to tangibly increase supplies, but this does not at all mean that it will have difficulties in gas export," said Sergei Pravosudov, director of the National Energy Institute.
"The increase in the capacity of the Central Asia-Center gas pipeline must be achieved, primarily, through an increase in supplies from Uzbekistan, where the main modernization work is to be carried out. There is no use in automatically summing up figures on the projects. Gas to China will not be supplied from the operating fields, but from those which have yet to be found and developed on the right bank of the Amu-Darya River. As regards the Caspian pipeline, exploration work is under way on Turkmenistan's Caspian shelf deposits, which are to serve as a raw material base for the pipeline.
According to Timur Khairullin, an analyst on the oil and gas sector with the Antanta Capital company, Turkmenistan has a considerable potential to boost production.
"Negotiations on the Caspian gas pipeline are nearing completion and no surprises are expected. The increase in the Central Asia-Center gas pipeline will not affect the future of the other, Caspian, pipeline. It is more likely that when the agreement is finally signed, Turkmenistan will have even fewer chances to join the European Nabucco project," the expert said.
Business & Financial Markets
Russian bureaucrats fail to persuade British company to part with blocking stake
Imperial Energy PLC has ceased talks with Gazprombank on the sale of a 25% minus one share stake in the company. Gazprom, which is the bank's core shareholder, expected a discount because of serious problems the company was having with the Federal Service for Supervising Natural Resources (Rosprirodnadzor).
However, it seems the price offered did not suit the British. Analysts believe this lack of accommodation could cost the British company dearly.
In April of this year, Rosprirodnadzor chief Oleg Mitvol said he suspected Imperial Energy, which had licenses to develop oil in Russia and Kazakhstan, of doctoring resources reports.
Mitvol threatened to strip the company of its mineral use licenses. Gazprombank offered to purchase at a discount Imperial Energy's newly issued stock totaling 25% minus one share of the increased authorized capital.
On Thursday, Imperial Energy officially turned down the bank's offer. The parties did not disclose the reasons. Analysts believe the British judged the offer as being too low.
"Imperial Energy's decision is justified from a business point of view, but could disappoint market players. Acquiring such a partner as Gazprom could put an end to political risks," said Artyom Konchin, an Aton Broker analyst.
As estimated by Timur Khairullin, an analyst with Antanta Capital brokerage, the 25% minus one share stake of Imperial Energy has a market price of $300 million.
"As a rule, large stakes are bought at a 15% premium to the market value, which means the fair price of the stake is about $350 million," the analyst said.
Imperial Energy said that in the course of negotiations the companies had identified some areas for joint effort in the development of oil fields and oil production.
"At the moment Imperial Energy's prospects look bleak in Russia," said Mark Markartur, director of the strategic decisions department of the independent consulting group 2K Audit - Business Consulting.
"It is not ruled out that their headstrong position will boomerang against the British. Say, in the form of new problems with Rosprirodnadzor," the analyst said.
This partnership could be handy for Gazprom as it expands in Europe.
"The fields which Imperial Energy is licensed to develop are too small for Gazprom. Perhaps it planned to swap its shares for gas distribution or energy assets during expansion in Europe. Since European companies have practically no access to Russia's oil and gas assets, they might get interested in such an offer," Khairullin said.
Russia, Saudi Arabia set to sign $4 billion arms contract
Experts said Saudi Arabia, a major arms importer, was ready to buy Russian weapons for the first time in a deal worth $4 billion.
Sources in the defense industry said Moscow and Riyadh could sign a contract for the sale of 150 T-90S main battle tanks worth $500 million in 2008-2009 by the end of the year, and that the two-year bilateral talks were nearing completion.
Moreover, Saudi Arabia could purchase a large batch of BMP-3 infantry fighting vehicles that had previously been exported to the United Arab Emirates and Kuwait, as well as over 100 Mil Mi-35 Hind attack helicopters and Mi-17 Hip transport helicopters and 20 Buk-M2E wheeled medium-range surface-to-air missile (SAM) systems.
The source said the helicopters could be worth about $2 billion.
Saudi Arabia annually spends $12-17 billion on foreign military equipment, with European and U.S. weaponry accounting for 50% and 40% of its arms imports.
Riyadh, which is one of America's most important strategic allies, could have opted to buy F-15 Eagle fighters-interceptors, Patriot PAC-2 SAMs and E-3 AWACS early-warning aircraft.
Some experts said Riyadh was changing its foreign policy priorities and looking for new arms suppliers.
Ruslan Pukhov, director of the Moscow-based Center for Analysis of Strategies and Technologies, said Riyadh had already stockpiled so many weapons that not all of them were necessary.
He also said Saudi Arabia wanted to align its foreign policy issues with Russia through arms deals.
Saudi-U.S. relations have deteriorated since the September 11, 2001 terrorist attacks involving Al Qaeda hijackers, mostly Saudi Arabian nationals, when airliners crashed into the World Trade Center Twin Towers and the Pentagon.
This year, the U.S. Congress was pressured by Israel and the Jewish lobby to turn down a Saudi request for a large batch of modern weapons.
After that, Riyadh started showing more interest in Russian weaponry.
Russia qualifies for Euro-2008, wins 1 bln pounds sterling
Russia could earn one billion pounds sterling through its qualification for Euro-2008 if it takes the correct approach now.
One billion pounds is the estimated amount that England is expected to lose as a result of its failure to qualify for the tournament.
According to preliminary estimates by the British Centre for Economic and Business Research, local TV companies will be hit the hardest because of lower commercial advertising rates, along with bookmakers and supermarkets.
For Russia, the national team's win means higher profits. "We must make pragmatic use of this football miracle, exploiting it to our maximum benefit," said Yaroslav Lisovolik, chief analyst at Deutsche Bank.
Experts are still hesitating to cite the precise amount of Russia's potential gain, but it must be comparable to Britain's loss, Lisovolik said.
"It will certainly be higher than $100 million," said Alexei Yankovsky, a manager with BDO Unicon Consulting, offering a more cautious estimate.
So far, the Russian National football team is officially sponsored by TransTeleCom, Meucci Group and Epson. The latter already said it would extend its support to 2008, "Epson has made the decision to support the Russian national football team in March 2007 and signed a contract until 2010."
The football success will also benefit Russian businesses, including TV channels, beer producers and tour operators. Tourist business is very sensitive to sports achievements, said Irina Tyurina, press secretary of the Russian Tourist Industry Union. "Football tours to Israel enjoyed no demand before Russia's win over Britain, although travel agents offered them," Tyurina said. There would have been demand for Euro-2008 tours in any case, she said, but now it will increase by several times. Air carriers will benefit, too.
"TV broadcasts and advertising contracts will fetch the highest economic dividends," Lisovolik said. "Bookmakers will earn more, too," said Roman Tkachuk from the Zerich Financial Group.
"In addition to financial profits, we are just happy that our team won. And when people are happy, they bring their country financial profits," said Pavel Medvedev, a parliament member.
On the other hand, analysts say Russia is in for a production slump in June 2008, because people will halt their work to watch and discuss football matches.
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