MOSCOW, June 18 (RIA Novosti)
Regional leaders put out feeler to test Medvedev's reaction / New presidential aide to fight corruption / Mikhail Gorbachev receives recognition for historical legacy / Gazprom may take Shell's place in Nigeria / TNK-BP shareholder row hinders Gazprom's Kovykta deal / Russian company to produce alternative fuel in Vietnam
Regional leaders put out feeler to test Medvedev's reaction
Regional Development Minister Dmitry Kozak, a close ally of Vladimir Putin, has rejected a proposal made by Tatarstan President Mintimer Shaimiyev to revive the idea of electing governors, made on June 14.
Kozak was the first federal official to air his view on the regions' proposal. Analysts see this as an important sign but not the final answer of the Kremlin.
In 2004, then President Vladimir Putin introduced the system of appointing governors, to be approved by local legislatures upon his recommendation.
"We made the decision only recently and are not going to change it. The system is working normally, so why rush from one extreme to another?" Kozak said in reply to the first radical anti-Kremlin proposal made by Shaimiyev, one of the most highly respected regional leaders and president of Tatarstan since 1991.
Murtaza Rakhimov, president of Bashkortostan, expressed cautious support for Shaimiyev's proposal yesterday.
No other top-level Kremlin official has so far replied to the Tatar president's proposal.
Rostislav Turovsky, head of regional studies at the Political Technologies Center think tank, said Shaimiyev's idea was a trial balloon launched to test the reaction of President Dmitry Medvedev.
"Regional leaders cannot decide which of the two centers of power [Medvedev or Putin] is the main one, and which policy, the previous or a more liberal one, to pursue," Turovsky told the online newspaper Gazeta.ru.
Alexander Kynev, director for regional programs at the Foundation for Information Policy Development, a partner of USAID in Russia, said: "Kozak is a highly respected official who is sometimes very tough, but his words give further proof that there is no unity of opinion on the issue among the [federal] leaders."
New presidential aide to fight corruption
President Dmitry Medvedev promised to crack down on corruption soon after his inauguration on May 7. At first, attempts will be made to expose corrupt police and security service officers.
Sources in the Kremlin and the Interior Ministry said a new presidential aide would be placed in charge of the anti-corruption drive. President Medvedev could sign the relevant decree in late June.
Technically speaking, the new presidential aide will focus on corruption plaguing the massive Russian administrative machine. However, analysts said he would primarily facilitate a personnel reshuffle in the Federal Security Service (FSB), Interior Ministry and the Federal Drugs Control Service (FSKN).
The most corrupt officers will be blacklisted and promptly sacked by the president.
Kremlin sources said Medvedev was likely to appoint 52-year-old Major General of the Judiciary Igor Tsokolov, head of the organized economic crime department at the Interior Ministry's investigative committee.
Tsokolov, who keeps a low profile, investigated the Golden ADA case involving diamond thefts from the State Precious Stones and Metals Depository [Gosfond] in the 1990s and recent corruption charges against the Russian Pension Fund.
If appointed, Tsokolov, would counterbalance those top law-enforcement officers who did not like the idea of Medvedev succeeding Putin, report to the prime minister or his several deputies and who are only formally subordinated to the president.
The new aide will help Medvedev to gradually establish his own power hierarchy. The new Russian leader has gained a reputation as a cautious politician who prefers to prescribe "homeopathy" instead of "surgery."
The decision to appoint a new presidential aide and Tsokolov's candidacy show that the president wants to establish control over security agencies in the near future.
Analysts said several show-trials involving corrupt law-enforcement officers would help Medvedev to score political points and would strengthen the Kremlin's status as the main state-power center.
Mikhail Gorbachev receives recognition for historical legacy
The U.S. National Constitution Center, an important non-profit group whose mission is to support the country's constitution, will award former Soviet leader and Nobel Prize winner Mikhail Gorbachev the 2008 Liberty Medal, says Andrei Kolesnikov, deputy editor-in-chief of The New Times weekly magazine.
The Liberty Medal has been awarded annually since 1989, but never to a Russian.
Why Gorbachev? The answer seems obvious, Kolesnikov says. His admirers, including those who nominated him for the award, would say he ended the Cold War, and gave hope to millions of people living behind the iron curtain.
Moreover, NCC representatives have said openly that Gorby will be awarded as part of a larger celebration program dedicated to the 20th anniversary of the Berlin Wall destruction in 2009.
Gorbachev's opponents are repeating Vladimir Putin's historic statement about the "greatest geopolitical catastrophe of the 20th century."
In fact, Gorbachev is still criticized by many. Some see him as the man who destroyed the great empire. Others accuse him of having been a weak leader, afraid of responsibility, who never ventured out of the socialist paradigm of the time and missed the right moment for broader reform, thus forcing society to pay a higher price for it later.
This is all very true. But historic leaders are remembered for playing a role in history, or rather because History uses them, whether they know what they are doing or not. Knowledge usually comes in the process of doing, and sometimes afterwards, which was the case of Mikhail Gorbachev and Boris Yeltsin, the analyst explained.
Gorbachev was certainly trying to build some sort of regulated democracy within the old socialist model, which proved impossible. How could he have known that? He is being awarded today for not knowing, Kolesnikov says.
Gazprom may take Shell's place in Nigeria
Russian energy giant Gazprom may replace Royal Dutch Shell in Nigeria, whose government has decided to terminate its contract with the Anglo-Dutch company for the development of an oil and gas deposit in the Ogoniland region of the Niger Delta.
Shell abandoned the fields, which hold proven reserves of over 10 trillion cubic meters (353 trillion cubic feet) of gas, 15 years ago after its relations with the local Ogoni people deteriorated to an extent that prevented its operation there.
In early June 2008, Nigerian President Yar'Adua told the Nigerian community in South Africa that "by the end of the year another oil operator will take over Shell Petroleum interests in Ogoniland."
In February, Gazprom confirmed negotiating a $7-billion contract for offshore gas exploration with the Nigerian government.
In early June, Gazprom CEO Alexei Miller met with Abubakar Yar'Adua, group managing director of the Nigerian National Petroleum Corporation, and Tanimu Yakubu, chief economic adviser to the Nigerian president, to discuss cooperation.
Gazprom has refused to comment on the possibility of replacing Shell in Nigeria.
Andrei Podoinitsyn, head of UFG Asset Management, said Gazprom needs to gain a foothold in the region now, while its profits are extremely high.
Vitaly Kryukov of the Kapital investment group said Gazprom was trying to diversify gas supply routes to the United States and Europe and strengthen its position on the LNG market. Operation in Nigeria will also allow it to increase its share in gas supplies to southern Europe, which will definitely alarm the European Union, which wants to diversify gas supplies.
Vitaly Gromadin of the Arbat Capital investment company said Nigerian officials had reportedly offered Gazprom to join the trans-Sahara gas pipeline project.
The pipeline running across Algeria to Europe will become a major gas supply route from Africa. If it is built and Gazprom assumes control over gas supplies along this route, this will be the EU's worst nightmare come true, Gromadin said.
"The Nigerian government apparently wants Gazprom to contribute to its energy sector, and it is highly likely that the Russian gas monopoly will take the place of Shell," he said.
TNK-BP shareholder row hinders Gazprom's Kovykta deal
Gazprom will soon take control of the huge Kovykta field in Eastern Siberia, said the gas monopoly's CEO Alexei Miller. However, neither Gazprom nor TNK-BP can tell when the deal will be finally closed.
The two companies could have closed the deal at the recent St. Petersburg economic forum but failed to do it because both leaders had packed agendas, Miller told reporters on Tuesday.
"We still have to agree minor technical details," he said.
Alastair Ferguson, TNK-BP's deputy executive director for gas business development, confirmed that the deal could be closed soon. But the executives cited neither the possible date nor the amount of the deal.
TNK-BP and Gazprom signed a preliminary agreement on the sale of a 62.9% stake in Rusia Petroleum, the Kovykta operator, and 50% in the East Siberian Gas Company, which is laying a pipeline from Sayansk to Irkutsk, on June 22, 2007. The finalizing of the deal has been moved to a later date several times since then.
The deal still needs the approval of TNK-BP's board of directors, which includes five BP representatives and five from the AAP consortium. The next board meeting will take place in mid-July, said the TNK-BP manager, who has not ruled out an extraordinary meeting by correspondence.
The latest amount discussed was $1.2 billion, said a source close to the Russian-British oil venture, and the TNK-BP manager confirmed the information. The company's press office quoted Ferguson as saying that Gazprom and TNK-BP agreed on the terms and financial conditions of the deal. In January, Gazprom experts evaluated the asset at between $800 million and $1.2 billion, including the actual costs and the estimated growth of the investment's value, two Gazprom sources said.
However, the Gazprom manager said the final amount has not been determined yet.
The sale of Kovykta will benefit TNK-BP more than Gazprom, said Konstantin Cherepanov, an oil analyst at the CIT Finance investment bank. The British company will be happy to have one more partner in Russia amid the conflict between the TNK-BP shareholders. As for AAP, the analyst does not think the consortium will benefit from this alliance at all. Therefore, the sale of the Rusia Petroleum stake is unlikely to come through soon, he concluded.
The Gazprom manager did not sound optimistic about the Kovykta deal closing soon because of the conflict.
Russian company to produce alternative fuel in Vietnam
The Biotechnologies Corporation, set up less than three months ago within the Russian Technologies Corporation, is starting its first foreign project to produce alternative fuel.
Analysts are skeptical over its future in view of high raw materials prices and the lack of regional customers.
Biotechnologies has partnered with PetroVietnam and the Metropol investment financial corporation to build a bioethanol plant in Vietnam, said a spokesman of Vietnam's state oil and gas company PetroVietnam. A month ago, they signed a memorandum on setting up a joint venture for this project.
"The partners are currently discussing the distribution of shares and other factors, which will depend on who provides the raw materials for the plant and markets its output," the Vietnamese representative said.
According to a source close to Russian Technologies, Russian companies see Vietnam as a source of cheap raw materials, in particular manioc and wastes of rice and sugarcane processing. Besides, local climate is good for gathering in three harvests a year.
In late April, Sergei Chemezov, head of Russian Technologies, said the Biotechnologies Corporation had launched a pilot project to produce first- and second-generation biofuels at the Tulun hydrolysis plant in Eastern Siberia's Irkutsk Region.
So far, Russian companies only cooperated with PetroVietnam in oil and gas projects.
Dmitry Rylko, director of the Institute of Agrarian Market Studies, said: "The production of bioethanol and the very idea of biofuels are exotic notions in the region, unlike in the United States or Brazil, where this sector has been progressing the fastest."
He said Biotechnologies' project in Vietnam was very complicated technologically.
"They intend to use three types of raw materials, which will complicate the process because each type of raw materials calls for individual tuning of the equipment," he said.
Andrei Sizov, head of the Russian agricultural analyst group SovEcon, said: "It is difficult to calculate the costs because of the raw materials. The production cost of biofuels is very high, above all because of the increased prices of raw materials."
Last April, rice prices soared to $1,000 per metric ton and sugarcane is not among the basic agricultural products in Vietnam, Rylko said, which is why the future of Biotechnologies' project is "vague."
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