MOSCOW, February 15 (RIA Novosti) Gas OPEC plans worry Europe, U.S./Foreign strategic player arrives on Russian insurance market/New Russian bill may nationalize power generation - experts/State Duma may block joint exercises with NATO in Russia/Chechen president a king without a kingdom
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Gas OPEC plans worry Europe, U.S.
The notion of setting up a gas analogue to OPEC, which is actively being promoted by Russian President Vladimir Putin, bewilders experts.
Gas producing countries can come to an agreement without a cartel. But the prospect of one being formed promotes European and U.S. insecurity.
In 2005, Russia, Iran and Qatar controlled 55.8% of the world's proven gas reserves and 26.3% of the world's gas output. Russia accounts for 28.4% of global pipeline gas exports, while Qatar for 14.4% of liquefied natural gas (LNG) exports.
Qatari Emir Hamad bin Khalifa al-Thani, who earlier rejected the very idea of a gas cartel, has now agreed to talks. However, he reminded everyone that the gas market is very different from the oil market.
Gas contracts are long-term, and the market is very segmented, he said.
Only LNG (which now accounts for about one-fourth of global supply) can be transported across the ocean, but it is more expensive, while pipelines firmly bind the supplier and the consumer together, said Valery Nesterov of Troika Dialog.
The market structure will not allow setting up a cartel, said a Gazprom representative.
Still, gas producers can unite, although specialized agencies do not know yet why they should.
"The gas price is pegged to the oil price, so the reasons for an alliance are unclear," said a ministry official.
Although gas suppliers cannot influence prices, they can be useful to one another, Nesterov said. At least they can avoid extra spending on the construction of rival gas pipelines.
Countries that supply gas to Europe can reach an agreement without establishing a cartel, said Adam Siminsky of Deutsche Bank.
A political agreement between Iran and Russia would be hard to achieve, but the very prospect of a gas OPEC helps to keep Europe and the U.S. worried, said Fedor Lukyanov, editor-in-chief of the Russia in Global Affairs magazine.
Russia can use the psychological leverage at talks on a new agreement with the EU, he said.
Biznes, Kommersant, Vedomosti
Foreign strategic player arrives on Russian insurance market
The international insurance group Zurich Financial Services has bought a majority stake (66%) in Russian insurer Nasta for more than $100 million.
Zurich Financial Services thereby becomes the first foreign company to buy a Russian firm not in order to get a foothold on the Russian market, but to acquire a rapidly growing business.
Market players said the transaction will encourage foreign strategic investors, who have been scrutinizing the Russian insurance market, to start buying.
Zurich, which has an option to increase its stake in Nasta to 100% by 2010, was initially attracted by the Russian company's large network.
Russia, which has a population of more than 140 million, will become the largest retail insurance market in Europe soon, according to experts with the Zurich-based company.
The sides have not disclosed the financial details of the deal, but an informed source said the price was higher than the initial evaluation of the Russian company, and exceeded $100 million.
This made it the largest transaction ever on the Russian insurance market.
So far, foreigners have bought controlling stakes in Russian insurance companies in order to gain access to their licenses, said Nikolai Klekovkin, former head of Renaissance Insurance.
The acquisition of Nasta by one of Europe's largest players means that the Russian insurance market has a bright future, said Yuri Reshetnyak, president of the National Insurance Group. He said other such deals would be made in 2007.
The transaction was a crucial event, signaling to other strategic investors to start acting, Reshetnyak said.
Anton Legchilin, deputy head of the Energogarant insurance company, set up by electricity monopoly RAO UES and regional generating companies in 1992, shares Reshetnyak's views.
"Many companies are preparing to sell stakes ahead of Russia's accession to the World Trade Organization," he said. "That is logical. But foreigners are mainly interested in retail insurance companies, because working with corporate clients in Russia entails specific methods, while working with retail clients is the same around the world."
New Russian bill may nationalize power generation - experts
The Russian parliament plans to draft and adopt a bill later this month that will serve as a guideline for the next few years on Russia's energy balance.
It seeks to reduce the share of gas and increase the share of other types of energy the country uses, but experts said that implementation of the initiative will require the nationalization of power generation.
The distortion of the energy balance, in which gas accounts for over 50%, and its volatility worry Valery Yazev, chairman of the parliamentary energy committee, who does not conceal his close ties with Gazprom, the state-controlled gas giant.
His committee said the balance is shaped randomly because of cheap natural gas, and that it is necessary to raise the share of coal and nuclear power generation.
The share of coal in generation is about 12%, while the target is 20%, the committee said. The share of nuclear generation, in compliance with the federal program of nuclear generation development, is to grow from the current 16% to 23-25% by 2030.
However, experts told the paper they consider the proposals of the deputy lobbyist anti-market.
"There are private companies even in the gas sector. It is unclear how they will be held responsible under this law," said Vladimir Pantyushin of Renaissance Capital. "If the bill is adopted, the government will have to buy all generation assets."
Vladimir Nesterov of Troika Dialog said: "Yazev's initiative testifies to a growing trend toward state control in economic management."
Both experts said the adopted guidelines would not resolve the sector's problems.
Yazev, who last spring pressed for the adoption of another skeptically received bill on the gas export monopoly, is determined.
"The government does not consider the bill necessary for the country, because everyone has become accustomed to plenty of oil and does not want to conduct a clear state policy," he said. "We are having a hard time pushing this bill through, but I hope we will succeed."
State Duma may block joint exercises with NATO in Russia
A counterterrorism exercise involving NATO units and the 76th Airborne Assault Division outside Pskov has been carried over into 2008.
NATO spokesman Robert Pszel explained the new delay by the Duma's failure to ratify a special treaty on the principles under which foreign army regulars, NATO among them, can operate on Russian territory.
Nor is the Duma going to address the issue in the near future.
The first time the Pskov exercise was postponed until the first half of 2007 was on September 6, 2006. Last fall, the Russian-American Torgau-2006 military exercise was also put off for a year.
Earlier, both Torgau and other training exercises had been held in various parts of Russia.
Experts believe the cancellation of a series of bilateral exercises in Russia is the result of a cooling in Russian-American relations.
Colonel General Valery Manilov, adviser to the Federation Council speaker and president of the Institute of Geopolitical Information, said that "after talking of equal cooperation and friendly relations with the North Atlantic alliance, Russia has begun to respond to NATO expansion."
Manilov said that "NATO, which is by no means a defensive bloc, is seeking to enlarge itself at the expense of Ukraine and Georgia, and thus approach the Russian borders still closer. On the other hand, the U.S. is actively preparing the ground in Poland and the Czech Republic to deploy anti-missile facilities there. One may also recall NATO bases in other former Warsaw Pact countries and a radar which the Pentagon is about to erect near our Far Eastern borders."
In the general's view, "ratification may not only be postponed for an indefinite period of time, but also blocked."
"It will not be before we see that the NATO-Russia Council works for a really equal and mutually beneficial partnership that we take up the issue of joint exercises in Russia again," Manilov said.
Vremya Novostei, Gazeta.ru
Chechen president a king without a kingdom
A conflict between Chechen President Alu Alkhanov and his prime minister, Ramzan Kadyrov, is rapidly developing into a full-blown political crisis.
The two leaders have stopped pretending that there are no divisions on their team.
According to observers, Alkhanov, who spends more time on business trips than in the republic, does not have much hope of winning a showdown with Kadyrov. In fact, he is like a king without a kingdom, with Kadyrov controlling the situation.
The other day, the Chechen office in Moscow, led by Kadyrov's close associate, Ziyad Sabsabi, announced the resignation of German Vok, secretary of the Chechen Security Council and an ally of Alkhanov.
Vok retaliated by criticizing Kadyrov in the media, and even suggested he consider resigning.
A major campaign spearheaded against Alkhanov underway in Chechnya is designed to force the president to do just that.
The Chechen press, controlled by Kadyrov through the Ministry of the Nationalities, the Press and Information, is sharply criticizing Alkhanov, who has little, if any, access to the local press.
He returned from a trip to Moscow last week in a better mood.
"The president has taken a harsh stand, possibly because he was assured of Moscow's support," said Grigory Shvedov, a human rights activist and editor-in-chief of the Kavkazsky Uzel (Caucasian Knot) newspaper. "It is not clear, though, if Alkhanov's patrons are stronger than the supporters of Kadyrov."
Alkhanov has decided to deliver a retaliatory strike at his prime minister. The Chechen Prosecutor's Office, which is probably the only security-related department not subordinated to Kadyrov, has opened a case against officials of the Ministry of the Nationalities, the Press and Information for the alleged embezzlement of more than 2.3 million rubles (some $87,420) from the republican budget.
However, experts said that such a "minor" case could be soft-pedaled. According to Shvedov, the prosecutors are unlikely "to be able to do anything against a top official," referring to Kadyrov.