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    MOSCOW, October 19 (RIA Novosti) U.S. to stop its European ABM project if Russia discourages Iran's nuclear program/ President Putin unlikely to give up power after leaving office/ Russians like Zubkov's Soviet-style management/ United Aircraft Corporation to buy 5% EADS stake from Vneshtorgbank/ Experts predict integration of LUKoil projects on Caspian shelf and in southern Russia

    Vremya Novostei

    U.S. to stop its European ABM project if Russia discourages Iran's nuclear program

    Daniel Fried, Assistant Secretary for European and Eurasian Affairs at the U.S. State Department, said Washington may act on Moscow's concerns over its plans to deploy anti-ballistic missile (ABM) systems in Eastern Europe if Russia convinces Iran to abandon its nuclear program.
    President Vladimir Putin said at his annual question-and-answer session broadcast from the Kremlin on Thursday that recent talks between Russia and the U.S. on its ABM plans for Europe showed that Washington is genuinely considering Russian proposals and looking for ways to resolve the issue.
    He added, though, that if Washington's decisions disregard Russian interests, Moscow would take measures to ensure the country's security.
    Nikolai Zlobin, director of the Russia and Eurasia Project at the Washington-based World Security Institute, said Washington's reconciliation gesture could be linked to Moscow's hard stance.
    "The Americans were surprised by Russia's reaction to their ABM plans [for Europe] and by statements saying that they were spearheaded against Russia," he said. The United States, "knowing that it should not offend Putin or drive him into a corner is now looking for intermediate options."
    Washington's decision could be encouraged by a proposal Putin allegedly made to Iranian spiritual leader Ayatollah Ali Khamenei during his recent visit to Tehran. Iran's top nuclear negotiator Ali Larijani said: "The questions he [Putin] raised included his view of [Iran's] nuclear program. We are now analyzing his ideas."
    Putin probably made an offer Iran will be unable to refuse, and the Americans can guess what it was.
    We should now wait for the reaction of the Iranian leaders.
    Lyudmila Kalugina, an Iran expert with the Institute of Oriental Studies at the Russian Academy of Sciences, said: "The main driving force behind Iran's current diplomacy is a desire to avoid a war with the United States."
    Nina Mamedova, deputy head of the institute's Iran section, added that the main goal of Iran is "to have its right to nuclear research confirmed and formally sealed."
    "According to the latest publications in the Iranian press and speeches by Iranian officials, the country's leadership has decided not to press the issue," she concluded.

    Vremya Novostei, Rossiiskaya Gazeta

    President Putin unlikely to give up power after leaving office

    The obvious impression from the president's October 18 annual televised Q&A session, broadcast by all major TV channels, his sixth since taking office in 2000, was that he has no intention of leaving politics and relaxing his grip on Russia's political life after his presidential term ends in the spring of 2008.
    Although he admitted during the broadcast that a new president would be sitting in the Kremlin next year, and opposed the idea of restricting presidential authority in favor of the Cabinet, when later asked by journalists about the United Russia proposal to become next prime minister, he did not once use the term "the new government" instead, he used phrases "we will do" and "we must do."
    His rhetoric Thursday about the unique features of the Russian government system leaves one in doubt that he would ever go far from running the country after his second presidential term ends next year.
    On the one hand, he said he didn't think it possible to personify the strategic plan of the country's development that he had voiced in the latest address to the Federal Assembly, the so called Putin Plan. On the other, he admitted that in times of trouble much was being done "manually." He told journalists that his government was not doing anything too far from the ordinary. When the country needs to be bailed out of a systemic crisis, some plans need to be implemented manually, but once that is done, "automated control mode" must be switched on again, he explained.
    When asked how long the "manual steering" must be applied, Putin said "15 to 20 years," and outlined Russia's development line for the next two decades. The only question is who will be at the helm.
    Valery Khomyakov, who heads the National Strategy Council, said the questions fired at the president during yesterday's televised session have shown that there is a strong demand for left-wing policies in Russia - active and socially oriented.
    "It is an important clue for the government," the expert said. "The president has emphasized Russia's growing military potential for the local public to hear as much as for Russia's foreign partners. It encourages national patriotism as much as leftist moods. Putin's annual sessions with the nation confirm that every year."

    Vedomosti, Moskovsky Komsomolets, Kommersant

    Russians like Zubkov's Soviet-style management

    Viktor Zubkov has proved so successful with the public during his first month in the prime minister's job that sociologists have decided to add him to the list of Vladimir Putin's potential successors.
    They are wary of putting his chances too high, though, because the rating of Russian politicians heavily depends on Putin's personal likes and dislikes.
    And Zubkov has almost caught up with the other presidential hopefuls.
    According to the Levada Center pollster, Zubkov's ranking is 50%, with Dmitry Medvedev at 57%, and Sergei Ivanov at 60%.
    As many as 13% of respondents said they would vote for Zubkov at the presidential election, compared with 4% in September, and 26% said they want Medvedev for president (down 4%), and 25% have opted for Ivanov (down 9%).
    According to pollsters, in the past eight years Russia's newly appointed prime ministers initially enjoyed high popularity. Oleg Savelyev, press secretary of the Levada Center, said each new appointee gives the public new hope.
    Leonty Byzov, an expert with the VTsIOM national public opinion pollster, said Zubkov's rating would continue to grow. Russians view him as taciturn but a successful Soviet-style leader and a caring father. He is especially popular with older Russians, who usually vote in elections, Byzov said.
    Political analyst Dmitry Badovsky said even the price crisis had not affected Zubkov's public standing, because he is demonstrating a management style that appeals to them.
    Yevgeny Gavrilenkov, an economist with the investment company Troika Dialog, said Putin had passed over part of his high rating to Zubkov. He sees no other reasons for the prime minister's popularity.
    Stanislav Belkovsky, head of the National Strategy Institute, said: "Ivanov, Medvedev and Zubkov have no rating as politicians. Their rating wholly depends on the benevolence of Vladimir Putin. When the public viewed Ivanov as the successor, they expressed their trust in him and approval for his actions. Ivanov 'fell' on September 12, when he failed to get the prime minister's post. Now the president's benevolent eyes are set on Zubkov, who is being increasingly seen as Putin's successor. If it becomes clear that he is not, his rating will plummet to zero within minutes."


    United Aircraft Corporation to buy 5% EADS stake from Vneshtorgbank

    Next year, the government-owned United Aircraft Corporation (UAC), consolidating aviation-production assets, plans to sell 10%-15% of its shares to Vnesheconombank (VEB), in exchange for a 5% stake in the European Aeronautic Defence and Space Company (EADS) it will buy from Vneshtorgbank (VTB).
    Experts said UAC was currently unable to attract market investors and had therefore decided to cooperate with VTB.
    The Corporation's executive vice president Valery Bezverkhny said the private placement would be worth $1-$1.5 billion, and that UAC planned to hold an IPO for 10%-15% of its shares at national stock exchanges in late 2009 or early 2010. Moreover, VTB will no longer be its shareholder after the IPO.
    Bezverkhny estimated corporate capitalization at $7-$7.5 billion prior to the IPO and said UAC would be worth $10 billion by 2015.
    UAC was registered in late 2006 with a statutory capital of 96.7 billion rubles (about $4 billion).
    UAC sources said the corporate development program required 120 billion rubles ($4.83 billion) in investment from 2008 till 2012. The Corporation is set to receive annual federal investment worth 6 billion rubles ($240 million) up to 2010. Federal target programs stipulate additional allocations; and the rest will be borrowed on the stock market.
    UAC also needs money in order to buy the 5% EADS stake worth $1.3 billion from VTB. Bezverkhny said the Corporation could decide on share purchases by the end of the year.
    On Thursday, EADS capitalization stood at $26.2 billion.
    Experts said the UAC-VEB agreement was politically motivated.
    Boris Rybak, head of aviation consultancy Infomost, said UAC would have trouble attracting standard financial investors unless it issued standard shares and streamlined the corporate structure.
    Rybak said the government had established VEB, involved in the UAC private placement, for supporting similar projects.
    Nikita Ryauzov, the head of the investment banking department at MDM-Bank, said UAC found it easier to reach an agreement with VEB because IPOs required substantial preparations and greater transparency.


    Experts predict integration of LUKoil projects on Caspian shelf and in southern Russia

    Vagit Alekperov, president of Russia's largest private oil company LUKoil, and Leonid Fedun, his deputy, paid $1.8 billion for a controlling stake in the territorial generating company TGK-8 in southern Russia. This means that LUKoil could integrate its Caspian shelf and power plant projects in southern Russia some of which are near where the 2014 winter Olympics will be held.
    LUKoil's managers showed interest in TGK-8 two years ago, said Yekaterina Tripoten from Sovlink, an independent investment firm.
    Russia's financial group IFD Capital, whose beneficiaries are Alekperov and Fedun, received permission from the Federal Antimonopoly Service to purchase 100% of the generating company back in September.
    Promregionholding, which is also believed to be affiliated with LUKoil's managers, already holds a 15% stake in TGK-8. In the final count, the oil company's management could get a super majority package in TGK-8.
    Meanwhile, experts are discussing a possible vertical integration of the oil company's business in the south of Russia. According to Sergei Arinin, an analyst with the Aton investment group, LUKoil is probably expecting a synergetic effect from the unification.
    Perhaps for this reason the buyers paid such a big bonus (20% of the current market price). Formerly, the Economic Development and Trade Ministry managed to insist on a rise in the selling price of the TGK-8 papers against the price set by the board of directors of RAO UES, Russia's electricity monopoly. The ministry was sure that LUKoil would buy the generating company at any price and it was right.
    The generating company looks even more attractive because its power plants are located in the area where the Sochi winter Olympics will be held. "Now TGK-8 can be evaluated at $700-$730 per kW of its design capacity," says Semyon Berg from the Finam asset management company. However, it is not right to evaluate territorial generating companies on the basis of one indicator as they also sell thermal power.
    Whatever the case, TGK-8's shares could rise in price even more after its merger with the Kuban generating company, which was earlier blocked by the Yukos oil company, a former shareholder of the Kuban generating company. At present, the stake in it formerly owned by Yukos is held by Russian state-run oil major Rosneft. After the merger, Rosneft will have about a 5% stake in the united company, so it may well sell it later to Alekperov at a profit.

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