MOSCOW, January 21 (RIA Novosti)
Intermediary blamed for Russian-Ukrainian gas war/Independent gas companies downsizing production/ RusAl asks banks to reschedule its debts/ Russians seek psychiatric help amid crisis
Kommersant/Vedomosti/RBC Daily/Gazeta.ru
Intermediary blamed for Russian-Ukrainian gas war
After a two-week break, Russian gas has staged a comeback to Europe. But the continent is unhappy with having been held hostage over the dispute between Russia and Ukraine, and promises to make its own conclusions. However, the villain of the peace has suddenly been declared to be one of the participants in the conflict - the RosUkrEnergo intermediary company.
Overnight from Monday to Tuesday, Gazprom CEO Alexei Miller said it was RosUkrEnergo that had disrupted negotiations between the Russian monopoly and Ukraine's Naftogaz. The company has been supplying gas to Ukraine since 2006. It is 50% owned by Gazprom, 45% by Ukrainian oligarch Dmitry Firtash, and 5% by his partner Ivan Fursin.
Miller's remark is odd, to say the least, said Mikhail Korchemkin, the director of the East European Gas Analysis: RosUkrEnergo has in effect two general directors, one of them Nikolai Dubik, head of Gazprom's legal department. Out of eight members of its coordinating board, four are managers from the Russian company.
Last night, the Yulia Tymoshenko bloc stood behind Miller. "All responsibility for the failure of gas talks in December rests with RosUkrEnergo and its patronizing partners in the president's secretariat and the Party of Regions," said its press release.
Those words sealed the fate of the Firtash business. According to Kommersant sources in the monopoly and RosUkrEnergo, he was only allowed to sell in Europe the gas his company had in underground storage sites in Ukraine (11 billion cubic meters).
With an average annual gas price in Europe of $280 per thousand cu m, as disclosed yesterday by Gazprom's deputy CEO Alexander Medvedev, RosUkrEnergo will be able to make another $3 billion. But the gas intermediary has yet to pay its (unspecified) debts to Gazprombank and Gazprom. The latter will also receive half of RosUkrEnergo's resulting earnings.
The current situation has shown that Prime Minister Vladimir Putin still runs affairs in Russia, while Yulia Tymoshenko wants to play the same role in Ukraine, believes Vadim Karasev, the director of the Ukrainian Institute of Global Strategies.
RBC Daily
Independent gas companies downsizing production
Russian-British oil group TNK-BP is downsizing gas production due to lower demand from energy giant Gazprom, acting CEO Tim Summers in charge of production and technology, told the paper.
Analysts said dwindling domestic and global gas demand would force all oil and gas companies to produce less gas.
When Ukraine blocked Russian gas transits to Europe earlier this January, Gazprom was forced to reduce gas production and buy less gas from independent operators because of uncertain domestic demand and due to a drop in gas exports, Capital Investment Company analyst Vitaly Kryukov told the paper.
Moreover, Gazprom has to buy fixed gas volumes in Asia, while Russia's underground gas reservoirs are filled to capacity and the potential for gas sales remains limited.
Subsequent developments will be largely affected by dwindling gas demand. The country's largest independent gas producer Novatek said nationwide gas demand had plunged by 12% in September-November 2008.
Gazprom spokesman Sergei Kupriyanov said domestic gas demand had dwindled considerably. "Independent producers may have trouble selling gas and will be forced to reduce production in conditions of declining demand," Kupriyanov told the paper.
Dmitry Lyutyagin, an analyst with the Moscow-based Veles Capital investment firm, also agreed with the assessment. Although the gas conflict and huge gas deposits have forced Gazprom to mothball some wells, the company will try and produce as much gas as possible and has no intention of reducing output, Lyutyagin said.
He said Gazprom was likely to reduce production from 551 billion to 540 billion cubic meters throughout 2009.
In 2007, Gazprom produced 548.6 billion cubic meters of gas, or 1.3% less than 2006 when 556 billion cubic meters were produced. At that time, Russia produced a total of 650.7 billion cubic meters of gas.
Vedomosti
RusAl asks banks to reschedule its debts
In mid-December, United Company RusAl, the world's largest aluminum and alumina producer, proposed that banks peg its loan payments to the price of aluminum: the lower the cost, the less the payment, two bankers working with the company, told Vedomosti.
The motivation behind the proposal is that market conditions have worsened since the loans were taken out, the price of aluminum has dropped (by 2.5 times since the summer, down to $1,400 per ton), and UC RusAl is finding it increasingly difficult to repay its debts.
Negotiations have already started and some indication on the initial results could emerge by the beginning of February, added a source close to the holding.
RusAl is also proposing loan payments be pegged to aluminum prices on the LSE, said a businessman who has knowledge of RusAl shareholders. If the prices slump (as now), payments should be reduced, and if they rise, payments should increase, he said. A source close to RusAl says this option is one of many, but he declined to name the others.
All in all, RusAl owes $17 billion, of which it must pay $2.8 billion as a last installment to its shareholder Mikhail Prokhorov for a 25% stake in Norilsk Nickel. Other loans and debts total a further $14 billion. The largest of them is from VEB ($4.5 billion). A further $2 billion is owed to Sberbank, say a source close to RusAl and a business acquaintance of Oleg Deripaska, the owner of RusAl. But most of the company's debts are to international banks, which in 2008 included BNP Paribas, Credit Suisse, Nordea, Raiffeisen, Natexis, Merril Lynch, and others.
BNP Paribas, Credit Suisse, Merril Lynch, Rothschild Bank and RusAl declined to comment on the report. Some of the banks only said the company had shown due diligence in honoring its debt obligations.
Things are difficult not only for RusAl, says Georgy Ivanin, head of analysis at Pioglobal Asset Management. Gazprom, Rosneft and Evraz Group are also heavily in debt, owing $40 billion, $19 billion and $10, respectively. They, too, will have to negotiate rescheduling with the banks. If Deripaska's company manages to make a deal, this could set a pattern for others, said Ivanin.
Kommersant
Russians seek psychiatric help amid crisis
Tatyana Dmitriyeva, director of the Serbsky state research center for social and forensic psychiatry, cited alarming statistics Tuesday. She said more people are turning to psychologists (up 10%) and psychotherapists (up 20%) for help.
Common complaints include depression, neuroses and panic attacks. Physicians predict that incidences of psychotic illnesses involving alcohol will grow.
According to Dmitriyeva, the global economic crisis has not yet sent suicide statistics significantly up. However, regional media sources have reported recent suicides over bankruptcy or failure to pay one's debt lately.
Sergei Polyakov, co-owner of Intermoda, a premium-segment retail chain in Nizhny Novgorod, committed suicide. Well-known Moscow businessman Vladimir Zubkov, the owner of Sobi concern, one of the largest sellers of air and railway tickets, killed himself. Both blamed the financial crisis in their final letters.
But spreading alcohol psychosis worries medical experts more. Dmitriyeva fears that some Russians might try to solve their financial problems with the help of alcohol.
However, she said so far people's responses demonstrated calm. "The crisis came after a period of relative economic and social stability, which improved people's psychological status," she added.
"The 1998 default was different. People woke up to find themselves in severe stress, and gradually found ways to cope with it," explained Alexander Asmolov, head of Moscow University's psychology department. "But now, when people have relaxed and become confident of stability, they started making long-term plans. And these plans have been frustrated by wage cuts or layoffs."
Asmolov believes that the psychological condition of Russians will very much depend on the government's actions. "If there is a clear strategy to develop the labor market, if people are motivated to retrain, they will stand up and fight. But if they feel abandoned, neuroses will spread inevitably," he said.
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