MOSCOW, September 5 (RIA Novosti)
Cheney fails to unite South Caucasus states against alleged Russian threat/ Russia receives international support over actions in the Caucasus/ Russian tanks should have entered Tbilisi/ British and Russian TNK-BP shareholders share peace pipe/ New national carrier to replace AiRUnion/ Gazprom takes care of its top managers
Cheney fails to unite South Caucasus states against alleged Russian threat
U.S. Vice President Dick Cheney has finished his tour of the South Caucasus undertaken to strengthen Washington's positions in the fight for Caspian energy.
Talks in Baku failed, when President Ilkham Aliyev did not give Cheney a warm welcome. Moreover, he hinted that Azerbaijan would not support the idea of rerouting energy resources to bypass Russia. His decision was prompted by the developments in Georgia.
Sources in Aliyev's administration said the talks, which focused on the war in Georgia and the Nabucco gas pipeline project, were difficult. Aliyev hinted that he appreciated good relations with Washington but would not quarrel with Moscow.
In fact, Baku has decided to wait and see what happens next.
The sources say Cheney was heavily disappointed with the talks and even refused to attend a party in his honor.
Aliyev's unwillingness to support Washington or to quarrel with Moscow is logical. Azerbaijan views Georgia's loss of Abkhazia and South Ossetia, and the fact that Russian tanks had advanced as far as Tbilisi, as a signal to all regional countries contemplating NATO membership.
Besides, Azerbaijan is sustaining heavy losses from the suspension of its energy exports to the West due to the August 12 explosion at the Baku-Tbilisi-Ceyhan pipeline, blamed on the Kurdistan Workers Party, and halted operation of the Baku-Tbilisi-Erzurum gas pipeline and the Baku-Supsa oil pipeline.
Baku has no complaints with Moscow. On the contrary, it has thanked Russia for sparing the Baku-Tbilisi-Ceyhan facilities during the bombing of Georgia.
Azerbaijan may review its policy regarding the pipelines across Georgia, as it has now become safer to transport gas to Europe across Russia. Sources in the Russian energy sector said Azerbaijan had increased supplies through the Baku-Novorossiysk oil pipeline.
In June this year, Russian energy giant Gazprom proposed buying all of Azerbaijan's gas exports at European prices. During his July visit to Baku, President Dmitry Medvedev agreed with Aliyev to discuss the possibility.
The talks may now be held sooner than planned, and Russia-Azerbaijan rapprochement will gather momentum.
Russia receives international support over actions in the Caucasus
Nicaraguan President Daniel Ortega said the country recognizes the independence of South Ossetia and Abkhazia, and fully supports Russia's position.
Other "Bolivarian" countries could follow Nicaragua's Sandinista government and recognize the independence of Georgia's breakaway regions as well.
The Bolivarian Alternative for the Americas (Alternativa Bolivariana para las Americas, ALBA), an anti-U.S. international organization uniting Bolivia, Venezuela, Honduras, Cuba, Nicaragua and Dominica and headed by Hugo Chavez, is apparently preparing to recognize Abkhazia and South Ossetia's independence but needs to act with caution considering China, its biggest economic partner, and Iran, whose role in the region is rapidly growing.
So far, Beijing and Tehran have only expressed "understanding" for Russia's policy in the Caucasus region. Chavez and his companions are interested in the European Union's position as well - despite numerous discrepancies between European countries and Chavez' somewhat unruly actions toward Juan Carlos I of Spain and German Chancellor Angela Merkel, Europe's role in ALBA's economies is massive.
The fact that no anti-Russian documents were passed at the extraordinary EU summit, which was restricted to general rhetoric, pushed the "Bolivarians" into taking a trial step toward the breakaway Caucasian republics. For Daniel Ortega it was the easiest, since Nicaragua is distantly linked with China and Iran, unlike Venezuela and Cuba.
Ortega hopes that the U.S. will not take revenge against Nicaragua for its recognition of Abkhazia and South Ossetia by stopping financial aid to the country, which amounts to $500 million per year. He could be right: the Sandinista government's refusal to eliminate Russian-made surface-to-air missiles Strela, which was insisted upon by Washington, did not result in the cancellation of the financial aid by the United States.
The current trend of events is favorable for Moscow - however, the Russian authorities are not expressing any particular joy. "These are just plain political PR actions, and it is common for any authoritarian regime to compensate its inner political failures by certain foreign policies," said Marina Chumakova, head of the Center for Political Studies at the Institute for Latin American Studies, the Russian Academy of Sciences.
Konstantin Zatulin, deputy head of the Russian State Duma's committee for CIS affairs and ties with compatriots, does not hold any illusions either: "It is naturally that Nicaragua's recognition of South Ossetia and Abkhazia will not lead to the territories' full recognition by the world," he said.
"The recognition by another 10-15 countries does not equate to membership of the United Nations, which in fact is the full international recognition. To rush to make up a list of countries prepared to recognize Abkhazia and South Ossetia is not necessary - they are obvious, these are the states which hold anti-U.S. positions. I do not think we should push them into recognizing the two regions and create the semblance of an anti-U.S. coalition," Zatulin said.
Russian tanks should have entered Tbilisi
According to information leaked to the press during the lightening visit by U.S. Vice President Dick Cheney to Tbilisi, Washington was prepared to offer Georgia more than just humanitarian aid. Experts predict a second round in the Georgian war in two or three years.
A source in the Russian Foreign Ministry said the attempts to rearm the Georgian army violated the Medvedev-Sarkozy plan.
"Americans claim they are delivering humanitarian aid to Georgia, but this cannot be true," he said. "There is no direct proof that they are delivering military cargo, but these are warships. Considerable funds have been allocated, allegedly for the reconstruction of Georgia, but Georgia has not been ruined - there is proof of this - so there is nothing to reconstruct there."
Military experts say the U.S. warships could be delivering troop movement monitoring systems and reconnaissance and communications equipment, which are vital for military operations to Georgia. In addition, President Mikheil Saakashvili, who needs to keep a tight hold on power and suppress public protests, which could increase once the truth about Georgia's military losses is made public, wants cutting-edge equipment for his interior ministry and security services.
Ruslan Pukhov, director of the Center for Analysis of Strategies and Technologies, said: "If the reports about the Pentagon's intention to rebuild Georgia's military capability are true, this means that the United States was not a third party to the conflict, but was directly involved and actually fought in that conflict through Georgia."
"It was not Saakashvili who broke from U.S. control, but the U.S. who provoked him [into starting the war] to see what the Russian army would do," Pukhov said.
"As for NATO's statements on incorporating Georgia into the bloc's air defense system, they show that Russia's attempts to come to cooperation terms with the alliance did not succeed. NATO is an instrument of the U.S. military-political domination in Europe, and is hostile to Russia," Pukhov said.
According to him, these developments point to the possibility of a second round in the Georgian war in two or three years, which means Russia must carefully consider the lessons learned in the conflict.
"The conflict showed that the Russian army has lost its capability of overpowering the enemy's air defense systems and that our air force is extremely weak," Pukhov said. "We must have reliable space-based monitoring systems and systems for targeting precision weapons, and also modernize the air force immediately."
The main lesson of the conflict is that the West would not listen to Russia's arguments. This shows that "the Russian army should have advanced as far as Tbilisi and put an end to the Saakashvili regime," the expert said.
British and Russian TNK-BP shareholders share peace pipe
British and Russian TNK-BP shareholders and the Alfa-Access-Renova (AAR) consortium have signed a memorandum of understanding regulating the resolution of their six-month conflict.
The price of peace is the resignation of Robert Dudley, the appointment of a new company head, changing the board structure and a likely IPO by one of the TNK-BP subsidiaries. The company's top managers, Russian officials, and the stock market took the news gracefully - TNK-BP stock immediately shot up. However, analysts are certain that a new power-sharing arrangement is only the first stage in the corporate warfare to be followed by property division.
Dudley is to quit before the end of the year, to be replaced by a new and independent CEO. BP intends to offer its own candidate with a knowledge of Russian and considerable business background in Russia. The board of directors is expected to approve him unanimously.
That, however, is not the only loss to be suffered by the company. In the wake of the memorandum, TNK-BP executive director German Khan (Alfa co-owner) and Victor Vekselberg (Renova owner) may leave their posts, said BP executive director Tony Hayward.
Deputy Prime Minister Igor Sechin is also pleased: "Negotiators have come to an agreement at the shareholder level without involving third parties, including the state. They gave the right signal to the market." And the market was not slow to respond. On the heels of the news, TNK-BP stock rocketed up by 19%.
The subject of corporate conflict is not yet closed, believes Konstantin Simonov, general director of Russia's National Energy Security Foundation: "The issue concerned not the stepping down by Robert Dudley or Victor Vekselberg, but the company's future." In his view, the conflict will end in changing the company's ownership structure, an assault of state capital, and the creation of a majority owner."
Capital brokerage analyst Vitaly Kryukov said that a great deal would depend on the new names tipped for company head and board members, particularly their independent status. "Otherwise, the conflict will soldier on, and the arrangement adopted yesterday will collapse like a house of cards," he said.
Experts have been hard put to name a successor for Dudley that is competent enough to meet the qualifying requirements. Simonov is of the view that Anglo-Saxon companies do not breed these kind of people, who are found only in German companies.
New national carrier to replace AiRUnion
In June and August 2008, Krasnoyarsk Airlines (KrasAir), one of the leading Russian airlines based in Krasnoyarsk, East Siberia, and AiRUnion, a national airline alliance comprising flag carriers KrasAir, Domodedovo Airlines, Omskavia, Samara Airlines and Sibaviatrans, were grounded after the airlines ran up debts and fuel suppliers refused to supply any more fuel.
AiRUnion, which was established in 2005, carried 3.1 million passengers in 2007, to become the fifth-largest domestic carrier in Russia.
The crisis triggered the largest merger in the history of Russia's airline market. The state-owned Russian Technology Corporation growing into an industrial monopoly with assets across a variety of sectors, from defense, automotive to civil aviation will use AiRUnion assets and those of several other airlines to create a new carrier. The new airline is expected to carry 33% more passengers than Aeroflot, the biggest national airline.
The new state-controlled airline will receive fleets and routes managed by Atlant-Soyuz, AiRUnion, the state-owned transport company Rossiya, Kavminvodyavia, Orenburg Airlines, Saratov Airlines and Vladivostok Avia.
The federal government will transfer its stakes in the airlines, apart from Atlant-Soyuz, owned by the Moscow municipal government, to Russia Technology Corporation. The new carrier will be based at Vnukovo Airport under the control of Moscow authorities and Yemelyanovo Airport in Krasnoyarsk.
Russian Technology Corporation will own a controlling stake, while those held by the Moscow municipal government and the Krasnoyarsk Territory have not been specified yet.
The concerned parties promised to restructure AiRUnion debts stage by stage. The alliance now owes between 18.9 billion ($750 million) and 22 billion rubles ($873 million) to creditors.
Several sources said the state would provide 20 billion rubles ($794 million) worth of direct financial support, using the sum to repay AiRUnion debts.
The future for private AiRUnion shareholders headed by KrasAir CEO Boris Abramovich, no relation to oligarch Roman Abramovich, is unclear. Market players and transport ministry officials said the huge debts did not appear out of thin air, and that criminal charges could be brought against the management of the top airline.
A source at Russian Technology Corporation said there would be no place for Boris Abramovich and his brother Alexander in the new company.
Analysts said the Russian airline market had never seen such a massive merger before. "This project will require tremendous financial and human resources," Boris Rybak, director of Moscow-based Infomost aviation consultancy, told the paper.
He said it would take at least two years to set up the consolidated airline, and that state-owned transport company Rossiya and Pulkovo had taken two and a half years to fully merge.
Oleg Panteleyev, chief analyst at the Aviaport agency, said a merger involving "problem" airlines was fraught with risks, but solvent companies boasting huge administrative resources would own the new carrier and would be able to attract large loans.
Gazprom takes care of its top managers
Russian gas giant Gazprom has approved a list of participants in an option program, which includes 69 managers. According to analysts, in a couple of years each of them could earn 4-7 million rubles on average from the difference in the monopoly's share prices.
Back in 2006, the Gazprom board of directors approved the main parameters of a management option program. This March the concern bought 1.7 million shares (0.0072%) for them on the market for 536.25 million rubles.
The board endorsed the participant list for the program (69 in all) and instructed the company's CEO Alexei Miller to sign share purchase agreements with them. The agreements have not been signed yet, but are due to be inked by the end of the year.
Gazprom has not yet made the list of the lucky ones public. In 2006, it was proposed that company shares should be given to members of the Gazprom board, department directors, directors general of Gazprom's 40 major subsidiaries and others - 76 managers in all, including Miller.
The main condition is that the shares should be bought out from Gazprom at the stock market price on the day prior to signing the agreement with the concern.
Gazprom promised a three-year loan to managers for this transaction. When the loan is repaid, managers can either sell their shares to Gazprom (at above market price if their value has increased or at the initial price if the value has fallen) or keep them.
By the yearend, Gazprom shares could rise by about 30%, says Konstantin Cherepanov of KIT Finance.
Konstantin Batunin of Alfa Bank agrees with him but says this may happen only with a rise in the RTS and MICEX indexes.
Both analysts share the opinion that in two or three years the concern's value will increase by100-150%, if oil price stays at about $100 per barrel.
All this means that Gazprom managers will be able to buy 0.0072% of the company's shares for about 500 million rubles and to earn an average of $4 million to $7 million per person in two or three years.
The number of shares currently held by nearly 400,000 employees of the Gazprom group is not known: Gazprom discloses information only on the board members and those of its main subsidiaries along with director generals. By the middle of this year, Gazprom had 92 such shareholders (according to reports), and their total share package (0.0762%) was worth 4.14 billion rubles at the MICEX price on August 4, 2008 (45 million rubles per person on average). The subsidiaries' directors general had 0.046% of the shares (2.5 billion rubles) and members of the Gazprom board 0.0095% (518 million rubles). The largest share package was held by Yury Vazhenin, 0.01% (543 million rubles), with the smallest being held by Alexei Miller, 0.00000027% (14,700 rubles).
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