MOSCOW, March 27 (RIA Novosti) Russia, U.S. still at odds over European missile shield / Criticism of Russian democracy is excuse for NATO expansion / Gazprom to diversify revenues and lose pipeline dependence / Russia's Mechel buys British ferrochrome producer Oriel / Bashkirian leader adds energy assets to his political capital / Boris Berezovsky hopes to get his billions back by court action
Vremya Novostei
Russia, U.S. still at odds over European missile shield
On March 25, Russian and U.S. experts met in Washington for another round of consultations on the deployment of a missile shield in Central Europe.
Analysts said both sides could still attain a new level of cooperation in ensuring global security.
Over the past few days, Moscow has assessed new U.S. missile defense proposals made during recent talks involving Russian Foreign Minister Sergei Lavrov, Defense Minister Anatoly Serdyukov, U.S. Secretary of Defense Robert Gates, and Secretary of State Condoleezza Rice.
Washington said Russian officers would be allowed to inspect the early-warning radar in the Czech Republic and ground-based interceptor (GBI) facilities in Poland with the consent of national governments.
The United States proposed aligning the radar so that it would not scan Russian territory and said it would not deploy GBI missiles, unless there was conclusive evidence of threats from third countries.
Washington insists that Poland and the Czech Republic approve all missile defense agreements. However, both countries are nervous and apprehensive over any possible concessions to Moscow at their expense.
The Czech Foreign Ministry's press service recently said the country and the United States could sign an agreement on deploying an early-warning radar at the Brdy base on May 5.
Yesterday Polish Defense Minister Bogdan Klich said the proposed U.S. base would lack ex-territorial rights and would be controlled by Warsaw. He said the permanent presence of Russian inspectors there was unacceptable.
Warsaw can only agree to temporary inspections, implying that Polish experts can also be allowed to visit Russian missile defense facilities. However, this prospect would raise eyebrows in Moscow.
Alexander Konovalov, president of the Russian Institute for Strategic Assessments, said the United States could agree not to deploy GBI missiles in Poland and to jointly manage the joint radar network. In response, Russia could agree to jointly develop, deploy and use strategic and tactical missile defense systems involving its southern radars.
Konovalov said a joint Russian-U.S. missile defense system could remove mutual concerns and would convince both sides that neither is plotting against each other.
He said the joint system would be able to destroy ballistic missiles being launched in the Middle East.
Nezavisimaya Gazeta, Gazeta
Criticism of Russian democracy is excuse for NATO expansion
Britain's Foreign Office presented its annual human rights report two weeks after the U.S. State Department did the same. The authors of the two reports say Russia does not respect human rights and is taking very few measures to improve the situation.
Russian political analysts say the publication of the lists of "undemocratic" countries is an element of the propaganda directed against Russia ahead of possible NATO expansion.
Yevgeny Minchenko, director of the International Institute of Political Analysis, said the list is an instrument of propaganda and an element of the neoconservative policy advocated by some Western ideologists.
"We should abandon liberal romanticism and admit that we are fighting a tough battle for influence," he told the popular daily Nezavisimaya Gazeta.
The publication of the reports could be part of preparations for the NATO summit, to be convened in Bucharest in April to discuss the bloc's expansion. It would facilitate the approval of an expansion decision if Russia were seen as an undemocratic country, a new "evil empire" threatening its new democratic neighbors.
Mikhail Vinogradov, head of the Center for Current Politics, said human rights are regularly used as a chip in political bargaining.
"Human rights issues are often used as an instrument of pressure, which is a two-edged sword," he said. "Russia has recently spoken about human rights violations in the United States."
Experts agree that if Russia decides to improve relations with Britain, it will start saying these stereotypes are not true and that Russia is ready for change. However, this is unlikely to happen, because the Russian political elite feels quite comfortable and well protected from criticism.
Alexei Malashenko of the Carnegie Moscow Center said: "This is a way of reiterating attitudes to Russia, because practice shows that for every action there is an equal and opposite reaction. Besides, the British are more concerned over oil prices than the situation in Russian society. And the political elite doesn't care for this opinion."
Alexei Makarkin, deputy director general of the Moscow-based Center of Political Technologies, said: "These rankings influence only the countries that want to become integrated into Europe, or those that need serious financial assistance from the West. Russia doesn't need either."
Kommersant
Gazprom to diversify revenues and lose pipeline dependence
On March 26, Gazprom's board of directors approved a strategy for the production and supplies of liquefied natural gas (LNG).
The strategy provides for over $45 million in investment for this project by 2030. If these plans are implemented, LNG sales will give the gas monopoly revenues comparable with its current revenues from gas exports via pipelines.
Gazprom does not currently have a single LNG plant.
A source close to the board of directors explained to Kommersant that the conservative scenario of setting up LNG production capacity will require not less than $45 billion, while the aggressive scenario will need over $60 billion to implement.
"The strategy provides for a certain difference in investments depending on the dynamics of construction and a rise in construction costs," the source explained.
Gazprom's LNG strategy could be based on reserves of the Shtokman gas condensate deposit in the Barents Sea. "Within the project, we could build four to six gas liquefying installations with a production capacity of 7.5 million metric tons each," the Gazprom official said.
At least two LNG plants (but no more than four, with a capacity of 4.5 million metric tons each) will be built within the Sakhalin-2 oil and gas project.
If all Shtokman gas (94 billion cubic meters a year) is converted to LNG, Gazprom may earn as much as $37.6 billion. With a 15% sales profitability rate the monopoly will receive $5.6 billion in net profit.
Valery Nesterov of Troika Dialog investmentcompany says that in 2008 Gazprom's net profit from gas exports will amount to $24.8 billion.
"This line of Gazprom's activities will make it possible to complete the formation of the global gas market through the development of LNG supplies," the analyst said.
He explained that since 2000 the global market of LNG sales has grown fourfold accounting for 20% of the world's total gas trade now.
"Gazprom's investments of $45 billion are nothing extraordinary. ExxonMobil invests $10 billion in one project in Papua New Guinea," Nesterov said.
Maxim Shein of BrokerCreditService thinks that any volume of investments will be justified.
"This will allow Gazprom to diversify risks and get rid of its pipeline dependence," the analyst said. It would be much better, of course, if Gazprom had its own receiver terminals so that it could regulate sales in the United States and avoid political sanctions, he added.
Gazeta.ru
Russia's Mechel buys British ferrochrome producer Oriel
Russian mining and metals giant Mechel is buying Oriel Resources, a British-based producer of ferrochrome and nickel, for $1.5 billion in anticipation of growing demand for stainless steel.
There are fears that China could cut its steel exports in the near future and prompt a further price growth.
Ferrochrome is a key component in the production of stainless steel, which is used in medicine, food and chemical industries. The purchase of a company producing ferrochrome was a logical step - last summer Mechel bought the Bratsk ferroalloys mill from the Investment, Construction, Technologies (ICT) Group. The mill produces ferrosilicon, also required for the production of stainless steel.
Ferrochrome is currently selling at $3,500 per metric ton. Since last year its prices have more than trebled.
Mechel used to buy ferrochrome on the market, but now the company has acquired its own production, said Maxim Khudalov, an analyst at the Metropol brokerage.
The Russian giant, he said, could sell extra output to Finnish-based companies Outokumpu and Rautorukki. What Mechel is lacking is only ferromanganese, said the analyst, but this product is sufficiently low-priced and widely available commercially, and its missing quantities can be easily bought on the market.
"Raw materials are expensive, and it is logical to invest in nickel and ferrochrome," said Sobinbank analyst Nikolai Sosnovsky.
For the time being the stainless steel market in Russia is not as well developed as, for example, China's, said Yevgeny Ryabkov, an analyst with the AntantaPioglobal Investment Group.
However, "the materials will become more expensive because steel consumption in the world is rising, chiefly in Asia; and as life improves the consumption of stainless steel will grow especially," Khudalov believes.
Demand for high added value products is to grow, particularly as there are market fears that China could reduce steel exports, prompting further price growth, Sosnovsky said.
Kommersant
Bashkirian leader adds energy assets to his political capital
Russian tax agencies, which had demanded that the shares of the six leading fuel and energy companies of Bashkortostan be transferred to the State Property Committee, now say they should be put on the balance of the republic in the southwest Urals.
According to experts, the decision means that Murtaza Rakhimov, president of Bashkortostan, will keep his post as a loyal alloy of the Kremlin.
Before spring 2006, the disputed shares belonged to the Bashkirsky Kapital company controlled by the president's son, Ural Rakhimov. The tax service charged it under Article 169 of the Civil Code, which stipulates the confiscation of property for conducting transactions that contradict "the norms of law, order and morality."
The transactions in question entailed the dilution of the controlling stakes of the republic's leading fuel and energy companies, which resulted in tax evasion estimated at 42 billion rubles ($1.78 billion).
Some analysts believe it is part of the struggle for power in the republic. To have a loyal government there, Moscow needed to confiscate the property of Ural Rakhimov, who was growing increasingly powerful.
Rostislav Turovsky, head of the Agency of Regional Studies, told the business daily Kommersant: "Assets controlled by the republican authorities have long become the bargaining chip in relations between Ufa and Moscow."
He said energy giant Gazprom, which has taken over Salavatnefteorgsintez, a major petrochemical producer, is strengthening its presence in the republic.
"It looked as if it would soon control the whole of Bashkortostan's fuel and energy sector," Turovsky said. "But yesterday's decision by the tax authority points to a change of priorities on the federal level."
"So, Murtaza Rakhimov will keep his post contrary to rumors of his imminent resignation," the analyst said. "It was probably part of bargaining over the terms of his remaining in power, which suits the federal center."
Vedomosti
Boris Berezovsky hopes to get his billions back by court action
The Vedomosti newspaper has obtained the text of Boris Berezovsky's lawsuit against Roman Abramovich. The disgraced ex-oligarch thinks that his former partner forced him to sell shares of the ORT TV channel and also of Sibneft and RusAl too cheaply.
Berezovsky's lawsuit against the Chukotka governor was submitted to the London High Court on June 1, 2007, the court registry said. A preliminary hearing of the case will start in April. On January 8, 2008, the London court registered another document received from Berezovsky with detailed description of his claims.
The document describes the circumstances of the sale of stakes in ORT, Sibneft and RusAl held by Berezovsky and his partner Badri Patarkatsishvili. Most of the participants in those events mentioned in the lawsuit refused to comment on it.
The lawsuit does not mention the size of the claim. Berezovsky says it has not been estimated yet, but it will be calculated as the difference between the amounts of the transactions and the real value of Sibneft and RusAl. He did not explain the method of calculating this difference.
"The aim of the lawsuit is to show how the Russian authorities, using business groups, illegally deprive entrepreneurs of their properties," Berezovsky told Vedomosti. "I have witnesses who will come to court. Badri Patarkatsishvili's recent death will not affect the proceedings, for his testimony was authorized by lawyers."
"It is difficult to assess prospects for this lawsuit," says Dmitry Stepanov, a lawyer with Yukov, Khrenov and Partners. "In any case, the court proceedings will take time for Berezovsky who must first prove that he owned those assets."
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