MOSCOW, October 31 (RIA Novosti)
Libya's Qaddafi brings new promises to Moscow/ British company discovers oilfield in northwestern Russia/Russian weapons still selling well/ World's largest mobile operator comes to Russia/ Russians could end up in jail over $400 debts/ Russians ready to save on going out
Kommersant
Libya's Qaddafi brings new promises to Moscow
Libyan leader Muammar Qaddafi is arriving in Moscow today for an official visit and a difficult conversation with Russian President Dmitry Medvedev.
Tripoli is violating agreements reached last April between Vladimir Putin, then president of Russia, and Colonel Qaddafi, although Russia has fulfilled its part of the bargain by writing off $4.5 billion of Libya's debt.
The good news is that Libya seems ready to allow a Russian naval base to be deployed, according to sources of the business daily Kommersant.
Contrary to promises made six months ago, Libya has not bought a single Russian tank or aircraft, and merely makes declarations of intent. Analysts say Libyans are eyeing S-300 and Tor-M1 air defense systems, T-90 tanks and Su-30 fighter planes.
According to a source close to the Russian-Libyan talks, the sides have made no major progress in other spheres either, including on a contract to build a 550-km (342-mile) railway link between Sirt and Benghazi awarded to rail monopoly Russian Railways.
Libya has made only a small advance payment under the $2.3 billion contract, which is insufficient to start serious work. Initially, the link was to be completed by September 2009, when Libya celebrates the 40th anniversary of its revolution.
Also, Russia expected Libya and Qatar to become its main partners in a gas cartel, but Tripoli has withdrawn from the project, threatening the cartel's implementation as Qatar refused to participate in an organization which only comprised two members. Iran, although not a gas exporter, has saved the day by replacing Libya.
According to the newspaper, Libya has admitted to problems in its relations with Russia. Qaddafi says they can be solved if Libyan companies are allowed to participate in natural gas projects in Russia, but Moscow is not so sure.
This time the colonel is expected to make a statement that will please the Kremlin. According to a source, involved in the visit preparations, the Libyan leader plans to discuss the deployment of a Russian naval base in the Benghazi port.
According to Qaddafi, Russia's military presence in Libya will protect it from potential attacks by the United States, which is not keen to embrace the colonel despite numerous conciliatory gestures.
The Pyotr Veliky nuclear-powered missile cruiser and the Admiral Chabanenko large anti-submarine ship have recently visited Libya on their way to Venezuela, and the Neustrashimy destroyer called at a Libyan port en route to Somalia.
Vedomosti
British company discovers oilfield in northwestern Russia
One of the largest recent oil finds has been discovered in Russia by London-listed company, Timan Oil & Gas. The British company even stands a chance of obtaining a development license although it qualifies for a list of proposed "strategic deposits" through the size of its reserves.
Over the past 20 years, the only large oilfield to be discovered was Filanovskoye in the northern Caspian Region, which was found by LUKoil. The company first entered it into its books in late 2005 with oil reserves of 82 million metric tons, which then increased to 218 million tons (1.6 billion bbl).
Timan Oil & Gas evaluated the Ñ1+Ñ2 (recoverable) reserves at Nizhnechutinskoye at 100.1 million tons (735.74 million bbl), and oil in place at 272.9 million according to Russian classifications. Independent oil consultants Miller & Lents put the field's SPE proven plus probable reserves at 191.3 million bbl. A Timan Oil & Gas spokesman declined to comment on the reserves.
The recalculated reserves were approved on July 18, 2008 by the state mineral resources commission, according to a source in Rosnedra, Russia's mineral resources regulator.
Timan Oil & Gas holds a Nizhnechutinskoye E&D licence which runs through 2024 through its subsidiary, Neftegazpromtekh.
Oilfields with Ñ1+Ñ2 reserves exceeding 70 million tons (514.5 million bbl) qualify as strategic resources under Russian law, which means the British company's license could be revoked by the government. However, in that case the government will have to refund the former license owner's investment.
The Natural Resources Ministry planned to complete, by the end of this year, a list of mineral deposits of federal importance considered off-bounds to foreign operators. Dmitry Peskov, the Russian prime minister's spokesman, said no procedures have yet been developed to allow this law to be implemented.
As for the law restricting foreign investment in strategic sectors, it does not fully apply to Nizhnechutinskoye. "The anti-trust authority cannot revoke the license because formally, it was acquired before the law took effect," explained Galina Trosova, deputy head of the FAS department for control of foreign investment. The company only has to notify the authorities of the changes, he added.
Valery Nesterov from Troika Dialog said the government will be in no rush to revoke the British company's license. "The case is complicated, because Nizhnechutinskoye is very large, 53,130 acres, and contains shallow oil (found at a depth of 90-490 ft). Production is bound to be extremely expensive there," he said.
Kommersant
RBC Daily
Russian weapons still selling well
"The Conventional Weapons Supplies to Developing Countries. 2000-2007" report to U.S. Congress published on Wednesday rates Russia second on the list of global arms sellers. The leading position is traditionally occupied by the U.S., and third place went to the UK.
Experts are skeptical about Russia's ability to keep its leading position, as the bulk of its exports are still Soviet-designed weapons.
Russia has been ranked in second place for global arms sales for the last five years. Mikhail Barabanov, chief editor of Moscow Defense Brief magazine, said, however, the estimates included in the report are pretty approximate. Judging from actual arms and military equipment sales figures, first place would go to the U.S., the U.K. would rank second, with Russia and France sharing third place.
Russia holds second place after the U.S., however, in arms supplies to developing countries, while Britain and France focus mainly on military-technical cooperation with other economically and militarily developed countries.
A Rosoboronexport representative said Russia's defense industry is currently operating at maximum capacity, which means that without boosting capability requiring additional funding, fulfilling the commitments of the ever growing backlog of orders will be a complex task.
According to Alexander Khramchikhin of the Institute for Political and Military Analysis, the bulk of Russia's military exports are obsolete Soviet-designed weapons, which will cause the country to gradually slide to the most primitive market sector.
China and India have been the main importers of Russian-made weapons, with Venezuela joining them recently. Aircraft form the main share of Russia's arms exports, with 100 Sukhoi Su-30MK fighter jets delivered to China, about 50 to India and 24 to Venezuela since 1999. Additionally, China and India purchased 100 and 50, respectively, component sets of the fighter for licensed assembly, while Algeria and Malaysia ordered 28 and 18 Su-30MKs, respectively. Aircraft deliveries are followed by naval weapons, air defense equipment and armored vehicles on the list.
Gazeta, Gazeta.ru
World's largest mobile operator comes to Russia
The world's biggest mobile firm, Vodafone, and Russia's largest operator, MTS, signed a strategic, non-equity services exchange deal on Thursday which will give customers greater roaming capabilities, and access to more services and market subscriber devices.
Analysts believe it to be a beginning of Vodafone's expansion in Russia.
The agreement involves Russia, Ukraine, Armenia, Uzbekistan and Turkmenistan.
MTS, the largest operator in Central and Eastern Europe majority owned by Russia's AFK Sistema holding, will be able to buy network and subscriber equipment at a discount, and to use Vodafone's expertise in building third generation networks and mobile broadband products. The companies will cooperate in roaming services.
MTS spokesperson Irina Osadchaya said the agreement has nothing to do with the financial crisis, emphasizing that the document does not provide for the establishment of an equity partnership later.
However, Russian analysts argue that the two companies will be ready for an asset swap next year. "I believe they will announce an asset swap next year," said Eldar Murtazin, an analyst with Mobile Research. "They are not talking about it yet, but I am convinced that it is their goal. Vodafone has been eyeing MTS since 2004."
According to Murtazin, Vodafone would remain the Russian operator's only foreign partner.
There are currently several international players on the Russian mobile communications market. Norwegian Telenor holds a stake in Russia's VimpelCom, Finnish TeliaSonera owns a stake in MegaFone, Russia's third largest operator, and Swedish discounter Tele2 operates in several Russian regions including St. Petersburg.
The potential Vodafone-MTS deal was estimated at $5.7-7 billion in January 2004. Vodafone later said that it was planning to enter into a commercial partnership with one of Russian and CIS companies.
In August 2007, German operator T-mobile was reported to be showing some interest in the Russian market. Analysts guessed it could be MegaFone then, but no official confirmation followed.
Vladislav Kochetkov, a senior analyst with the Finam brokerage, said the company was heading for a long cooperation. "Russia is a fast-growing market for mobile services. The development of 3G communications could give a boost to operator incomes from non-voice services. The first results of the partnership will show themselves in two or three years, and the effects of the crisis could well have worn off by then, both in Russia and globally."
Vedomosti
Russians could end up in jail over $400 debts
Is there a difference between a Russian owing 10,000 rubles to a bank and an oligarch who owes it $4.5 billion? There is: the oligarch personifies the public domain. Or rather a 25% stake in Norilsk Nickel which Oleg Deripaska's RusAl bought using a $4.5 billion loan from Western banks and is now set to get the same sum from the state to pay back the loan. An ordinary Russian, if he/she defaults on a loan of 10,000 rubles, could end up in jail - according to legislation put forward by a group of parliamentarians.
Deputies are proposing amendments to Articles 176 and 177 of the Criminal Code, making it a criminal offense for individuals to give false information when taking out a loan, as well as reducing the amount of debt when a borrower may be taken to court from 250,000 rubles ($9,259) to 10,000 rubles ($370).
Under the Constitution, the law establishing or mitigating responsibility has no retroactive force. That is to say, these new rules should apply only to borrowers taking loans after the amendments come into effect (if they are passed). It is a different matter that its effect may be felt now: those who are not already scared will be frightened from the banking system once and for all.
By the beginning of September, according to the Central Bank of Russia, all banks had 123.3 billion rubles in bad debts, or 3.2% of all individual loans issued. Of course, the banks fear that non-payments may continue to grow. But before the crisis struck, they were using every trick in the book to attract more customers and at high interest rates: they closed their eyes to the client's ability to pay and failed to be open about the actual rates. A "problem loan" is a market concept, not a criminal one. It is a risk for the bank, which it includes in the price of a loan.
The state must no doubt be a custodian of justice - for example, send those committing fraud to prison. Fraud could well include giving false information in applications - it needs only to be proved. But in order to avoid sending to prison, a person who has lost his job during the crisis and is unable to pay back his loan, the state must have a working individual bankruptcy law.
Vedomosti
Russians ready to save on going out
Russians are already feeling the effect of the crisis. They are ready to spend less on going out and household goods, according to an online survey run by Nielsen experts in October.
Nielsen polled over 26,000 online users in 52 countries in a series of surveys held every spring and fall.
Nearly 50% of Russian respondents are convinced that the country is now in a state of recession, while 31% expect the economic situation to improve within the next 12 months. Compared to westerners, Russians could be called optimists. Across the world as a whole, 63% of consumers are certain that their country is experiencing an economic recession, and only 18% hold any hope that the situation will change for the better within a year.
According to Michalis Christou, Nielsen's regional managing director in northeast Europe, the Russian consumer market is one of the few markets showing signs of maintaining stability. Nielsen's data show that there has been no substantial change in consumer spending in Russia of late, but Russians are already thinking about ways to cut their spending.
Whereas foreigners prefer to cut down on new clothes and gas and electricity bills (up to 49% of the respondents), only 14% of Russians are ready to save on gas and electricity. The overwhelming majority of Russian respondents (56%) are ready to spend less on going out (against the global average of 47%).
In addition, 48% of Russians plan to put off buying new electrical items, such as computers, mobile phones, etc. Another 40% are ready to spend less on clothes and new furniture and bulky household equipment. The global figures are 40% and 33%, respectively.
The views of Russian and foreign respondents differ radically on whether they will use their cars: faced with money problems, 34% of foreigners (against 17% of Russians) plan to drive less often. Only 20% of Russians are ready to buy cheaper foodstuffs (against 36% globally).
"Even during the crisis people will not stop spending on themselves; they will continue to go to the movies and restaurants," says Mikhail Zelman, co-owner of Arpicom (the Goodman and Kolbasoff chains). "However, there is a feeling that average amount spent is falling," he admits adding that detailed statistics will be available by the yearend. According to him, people are becoming more selective when deciding on their choice of where to go out.
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