What the Russian papers say


MOSCOW, June 19 (RIA Novosti)
American missiles could move closer to Russia/ Regional governors want more independence from Kremlin/Dmitry Medvedev lagging behind Vladimir Putin's public trust rating/ Germany questions Gazprom's status/ BP will have to make concessions in its conflict with Russian TNK-BP/ Trans-Balkan pipeline stalls

 Izvestia, Gazeta, Kommersant

American missiles could move closer to Russia

Lithuania and the United States say they are not formally discussing deploying Washington's missile defense system, contrary to comments made by Poland. However, 10 interceptor missiles could be deployed in Lithuania unless a breakthrough is achieved in the bilateral talks with Poland.
Poland is demanding too much to host the American missiles. It is insisting that the U.S. help it modernize the army, beef up its air defenses with a system such as Patriot missiles, and also provide financial aid.
Poland is probably marking time at the talks with the U.S. because Russia has promised to retarget its missiles at Poland if it agrees to the deployment of the missiles.
Tired of all this, Washington has hinted broadly that the issue must be settled, one way or another, by the end of July.
Russian analysts say the rumor of missile shield talks between Lithuania and the United States may lead to the actual deployment of U.S. missiles in the Baltic country.
Konstantin Kosachev, chairman of the international affairs committee of the State Duma, the lower house of Russia's parliament, said: "It is alarming that Lithuania is being considered as an alternative deployment site, according to American and Polish sources. It appears that they want to stealthily cross the line beyond which lie problems for Russia's security, whereas our legitimate concerns will be presented as aggressive aspirations regarding neighbors."
Mikhail Margelov, chairman of the upper house's international affairs committee, does not support this view.
"The Americans, and above all the outgoing administration, need to broaden support for President George Bush's plan to deploy a ballistic missile shield in Europe, as well as inspire competition for Washington's goodwill among East European countries."
Margelov said the conflict between Poland and Lithuania was inspired by Washington in a bid to see which of the East European loves the United States most.
"Russia is closely watching these developments because they are taking place near its borders," he said. "As for its reaction, you can expect it only after Washington reaches a concrete agreement with any of the above countries."

RBC Daily


Regional governors want more independence from Kremlin

As there are now two centers of authority following the last presidential election, regional leaders consider themselves free to criticize federal policies. Yesterday President Murtaza Rakhimov of Bashkiria, following in the footsteps of Tatarstan's President Mintimer Shaimiyev also made a strong case for returning to direct elections for regional heads.
Experts think this is unlikely. But the Kremlin will have to swap stick for carrot by allowing regional elites to put up a governor's candidate and bear collective responsibility before Moscow for the social and economic situation in their regions.
The new mechanism of electing or, in reality, appointing regional heads was proposed in 2004 following the tragic events in Beslan by Vladimir Putin, then president of Russia and now prime minister. The initiative was pushed through under the pretext of fighting terrorism.
"We have lost the federative state," Rakhimov told journalists, proposing a return to direct elections. In that way he backed the strong plea by his Tatarstan counterpart to reinstate the electivity of regional heads.
Vladimir Pligin, a United Russia member and chairman of the State Duma's committee on nation building, is not ruling out that the old system may be restored in four years' time. A government source said there is a top-level discussion currently going on because the system failed to live up to its purpose. A Kremlin source said the subject was of no current interest.
Regional Development Minister Dmitry Kozak does not consider it possible to go back to governor elections in the near future.
Experts believe the Kremlin is ready to give some leeway to the regions - otherwise the ambitious Strategy-2020 program will fall flat.
"It seems Moscow has decided that governors reporting only to Moscow have little authority in their regions to maintain high living standards," said Alexei Makarkin, vice president of the Center for Political Technologies.
Of course, Shaimiyev and Rakhimov realize that direct gubernatorial elections will not be brought back by the Kremlin too soon, but argue on the principle of asking for more to get what they can. It is not unlikely that regional elites may be given more say in nominating and endorsing their candidates for governor.
Shaimiyev and Rakhimov, the well-established heads of their republics, will last out any regime, and appointments are sought only by those who have no chance of running for governor, Alexander Kanyev, a political scientist, said.
By raising the issue, Shaimiyev wanted to test the new administration for strength, while some of the governors (Khloponin, Tuleyev and others) are trying to guess its position, concluded Mikhail Vinogradov, director general of the Center for Current Politics.


Dmitry Medvedev lagging behind Vladimir Putin's public trust rating

Although TV companies give 50% more time to Russia's new president than they do to the prime minister, Putin's public trust rating is still 50% higher than Medvedev's. The media have so far failed to convince the public that the country now has a new leader, sociologists say.
Medialogia, a research company, and SCAN Interfax database have researched the media at Vedemosti's request to find out how often Putin and Medvedev were mentioned between May 12, when Putin took his current post, and June 15.
Medvedev appears on TV as often as is appropriate to his status, no more and no less, said a source in one of the national TV companies. TV host Vladimir Pozdner said he has heard no mention from the Kremlin as to who should appear more often in the news. The situation regarding TV channels is similar to when there were two potential successors for Putin's job: if they showed one of them, they unfailingly mentioned the other as well, Pozdner said.
The Kremlin's efforts to promote Medvedev as much as possible was demonstrated by a recent incident at the St Petersburg economic forum. A speech made by First Deputy Prime Minister Igor Shuvalov made the front pages overshadowing, as many thought, even Medvedev's presentation. The Kremlin wasn't happy about it, said a source close to the president's executive office. A week ago, reporters were not allowed access to Shuvalov's speech at the United Russia party meeting, a source in the party management said.
However, with all the TV promotion, the president's public trust rating is not growing any higher, fluctuating around 45% according to the FOM pollster, or 40%, according to VTsIOM. The prime minister's ratings are also stable - 60% (VTsIOM) and 70% (FOM).
Putin's rating has grown to a constant level, said political analyst Dmitry Badovsky, and no longer depends on how often the prime minister appears on TV.
Certain fluctuations in the ratings were recorded in May due to expectations that Medvedev would become the most important person in the country.
However, the TV coverage of Putin's recent visit to France proved the opposite, said Leonty Byzov, an independent political analyst. It is not so important how often one is in the news, but how the newscasters interpret what they broadcast. It all looks like Medvedev has not yet got accustomed to his role as the boss, while Putin behaves the same way he did during his tenure, the expert added.


Germany questions Gazprom's status

Germany has questioned the status of energy giant Gazprom as a state-controlled company during multilateral talks on Russia's accession to the World Trade Organization (WTO) because its trade policy is subject to WTO regulation.
"German delegates raised the Gazprom issue at the beginning of the talks," a source in the WTO Secretariat told the paper. This concerns the status of Gazprom as a state-controlled company.
Under WTO regulations, the activities of such companies are subject to restrictions stipulated by a working group report, due to be signed by Moscow during WTO accession.
Moscow's chief WTO negotiator Maxim Medvedkov confirmed such reports. Medvedkov and Alexei Portansky, head of the Information Bureau on Russia's Accession to the WTO, said the United States was more interested in the issue.
"Saudi Arabia and the United States, rather than Europe, care more about Gazprom. Germany, which may be concerned about gas supplies, is in no position to discuss Gazprom's status," Portansky told the paper.
It is not beneficial for Russia to discuss the energy giant's status as a state-controlled company. The activities of such companies are regulated by the General Agreement on Tariffs and Trade 1994 (GATT 1994) covering state-owned and state-controlled legal entities, as well as those receiving exclusive or special export-import privileges.
WTO talks focus on their pricing policies, subsidies and export duties. The WTO, which requires such companies to state that they are engaged in purely commercial imports and exports, also monitors corporate trade policies.
Although Gazprom's export monopoly is legally formalized "On Gas Supplies," Russia does not recognize its status as a state-controlled company.
Sources close to the talks said a lengthy discussion was possible.
"The delegations which lack political will to reach a prompt agreement are therefore raising additional issues," a source told the paper.
Trust Bank's chief economist Yevgeny Nadorshin said Gazprom's status had political, rather than economic, implications, and that this could make things difficult.

Vedomosti, $martMoney

BP will have to make concessions in its conflict with Russian TNK-BP

A time bomb is ticking at TNK-BP. In 2003, when TNK-BP was set up in a merger between BP and the oil assets of Alfa and AccessRenova (AAR), Mikhail Fridman described the move as a bridgehead for BP's expansion into eastern and southern Europe. The Russian staff at TNK were also offended by the super-high salaries of a few dozen of their BP colleagues, who allegedly earn $100 million a year.
These differences did not seem important then, but now they have become almost insurmountable, and the price paid for the company looks ridiculous now, especially since oil prices have soared above $140 per barrel.
Indeed, $6.75 billion for a 50% stake in TNK-BP is too small for a company producing 78 million metric tons (573.3 million bbl) and earning $38 billion a year. Besides, the company has uncompleted deals abroad worth as much as $30 billion, according to the Kapital investment group.
Betting on either side in the fight between British and Russian shareholders is senseless, because Mikhail Fridman, Viktor Vekselberg and Len Blavatnik will not be stopped on their path to higher profits. They feel comfortable in a corporate war. Besides, they are getting support from Russian legislation and administrative resources, as well as the Russian establishment's restrained attitude to foreigners.
This is the moment of truth for BP. It cannot leave Russia with current oil prices as they stand and the fact that there are few, if any, undistributed oil reserves. Its shareholding in TNK-BP provides 25% of its output. Therefore, BP must do something to keep its Russian assets, otherwise its value will plummet and its management with face problems with shareholders.
The partners can either tear TNK-BP apart, or find a way for a "civilized divorce." AAR has refused to take money for its stake in TNK-BP, but it will not give up its assets there.
In the past, AAR management performed miracles to ensure a merger with BP, because the British partners were not inclined for a new "marriage" after the conflict in Sidanko. The British are now not prepared to give up a 9.6% stake in BP for a 50% stake in TNK-BP, but who knows what trails lie ahead?
Unlike Mikhail Khodorkovsky, the founder of the bankrupt Yukos oil company who was imprisoned in Siberia when Sibneft shareholders decided to terminate the deal with Yukos, TNK-BP shareholders still have a chance to settle their differences.
Prime Minister Vladimir Putin has proposed a way. He has said he was against setting up TNK-BP as a parity venture five years ago, believing that one of the two sides should have control of the company. Then BP did not follow the president's recommendations.


Trans-Balkan pipeline stalls

The company chosen to construct the Burgas-Alexandroupolis oil pipeline has been left without its head - Sergei Vinnichenko last week stepped down as president of Trans Balkan Pipeline BV. According to unofficial reports, his departure was down to difficulties with the project. But Transneft and officials reassured that the pipeline would be finished on time.
A source familiar with the situation says that Vinnichenko decided to resign over delays in the project implementation. "No one is responsible for it or helps with its realization," the source said. One of the headaches, he said, was the company's Dutch registration, where under local legislation boards of directors have to meet and the management must spend no fewer than 180 days a year. "If we had registered ourselves in Cyprus, we would have avoided such problems," he said.
Oil pumped by the Caspian Pipeline Consortium (CPC) from Kazakhstan's Tengiz to Novorossiisk is expected to become one of the sources to fill the new line. The CPC pipeline is planned to be expanded from 32 million tons to 67 million tons. The first stage of expansion, up to 50 million tons, must be completed by the spring of 2012, Vladimir Razdukhov, CPC director-general, said at the end of May. The Russian authorities plan to construct the Burgas-Alexandroupolis pipeline and expand CPC capacities in parallel.
No feasibility studies yet exist for the project, although Transneft vice-president Mikhail Barkov said they will be completed by the end of the year. "In the next two weeks we will know if the old studies prepared in 2000 are of use," the top manager explained, adding that the company would start construction at the beginning of 2009. A Ministry of Energy source also said that by the time CPC was expanded the Trans-Balkan pipeline project would be finished.
"The Kashagan field in Kazakhstan will not be opened until 2013-14 and for that reason there is no urgent need as yet to expand the CPC and build the Burgas-Alexandroupolis pipeline now," said RusEnergy analyst Mikhail Krutikhin. He added that the alternative Samsun-Ceyhan pipeline project, announced a year ago and planned to bypass the Turkish straits, has made no progress either. Burgas-Alexandroupolis interests Russia from a geopolitical standpoint, but is meant above all for Kazakh oil, said Konstantin Simonov, of the Center for Current Politics. In his view, the second branch of the Baltic Pipeline System is Russia's current priority.

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