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    MOSCOW, October 2 (RIA Novosti)
    Russia, U.S. should set up a commission of ex-presidents / Implementation of Medvedev-Sarkozy plan threatened / Russia trying to overhaul its army / Gazprom is not putting all its eggs in Kovykta basket / Shell bound for East Siberia / Moscow ranks with world's top five most dangerous cities

    Kommersant

    Implementation of Medvedev-Sarkozy plan threatened

    Russian roadblocks hindered the movement of the European Union mission deployed to the border of Abkhazia and South Ossetia yesterday.  Besides, Moscow and Brussels still cannot agree on the deployment of the observers in the two newly independent republics, and the implementation of another key provision of the Medvedev-Sarkozy plan, a Geneva meeting on the situation in the Caucasus, has been threatened.
    "Sending observers to the actual conflict zones remains the ultimate goal of the European Union," a source on the team of Javier Solana, EU High Representative for the Common Foreign and Security Policy, told Kommersant.
    Georgian leader Mikheil Saakashvili said French President Nicolas Sarkozy had promised him in writing to send observers to the conflict zones.
    Moscow has a different interpretation of the agreements formulated by Russian President Dmitry Medvedev and his French colleague Sarkozy.
    Igor Lyakin-Frolov, deputy head of the Russian Foreign Ministry's department of information and the press, said: "EU observers will be deployed throughout Georgia, but not in Abkhazia and South Ossetia, which are independent states."
    Sergei Shamba, the Abkhazian foreign minister, said: "There will be no Western observers in our territory."
    South Ossetian officials feel the same way about their country.
    Their confidence has probably been strengthened by Somalia's announcement of its readiness to recognize the two new states. At the same time, Somalia, where a civil war has been going on for 17 years, expects Russia to step up military technical cooperation with it.
    Moscow and Brussels also cannot agree on other key aspects of the Medvedev-Sarkozy plan signed on September 8, above all discussions on regional security scheduled for October 15 in Geneva.
    A high-ranking official in the Russian Foreign Ministry responsible for relations with Georgia said: "Practical discussions of the issue will begin with Europeans on October 2."
    But a senior Georgian official said the meeting would not be held before October 19, and then only at the level of experts.

    Nezavisimaya Gazeta

    Russia, U.S. should set up a commission of ex-presidents

    Presidential candidates in the Untied States have not mentioned Russian President Medvedev during their first debates, which may mean that they do not recognize the decision of Vladimir Putin and Dmitry Medvedev to govern Russia as a tandem, the top official of the Carnegie Moscow Center told the popular daily Nezaivsimaya Gazeta.
    Rose Gottemoeller, director of the Carnegie Moscow Center, the representative office of the Carnegie Endowment for International Peace in Russia, said this brings into question the "division of labor" agreed last May when President Medvedev took the oath.
    According to the deal, Medvedev is responsible for foreign and security policy, while Prime Minister Putin is in charge of economic matters.
    This is bad news for Russia's international partners, who do not know with whom to deal in Moscow, Gottemoeller said.
    This uncertainty will weigh heavily on the new U.S. president, who will assume office at a time when Russian-U.S. relations are at their lowest ebb since the end of the Cold War.
    To clarify the situation, Putin could assume a special commitment that would correspond to his role as ex-president, the Carnegie expert said.
    Efforts to normalize Russian-U.S. relations would not succeed without daily attention at the top level. The task is to use a risky but potentially winning strategy that would keep the focus on relations with Russia. A top-level presidential commission could be a good solution.
    Such a commission would have two key missions - find a way to normalize Russian-U.S. relations, and act as a high-level council for emergency talks, Rose Gottemoeller said.
    Such talks could focus on extending the term of the strategic arms reduction agreement, which will expire in December 2009, or the treaty on conventional armed forces in Europe, which has been dealt a heavy blow by the events in Georgia.
    The commission could include former presidents, including Jimmy Carter, George Bush Sr. and Bill Clinton. But it would not be perfectly balanced, because there are only two living Russian presidents, Mikhail Gorbachev and Vladimir Putin. Besides, Putin is the current prime minister.
    However, the invitation of Putin to the commission as a former president could include official recognition of his current status as prime minister.
    Although a risky undertaking, the commission would have the monumental goal of preventing a tragedy that might push Russia and the U.S. into a serious confrontation, depriving them of the ability to cooperate on key international issues.
    If Putin accepted this commitment, this would help clarify his role in Russia's leadership.

    RBC Daily

    Gazeta.ru

     Russia trying to overhaul its army

    The Kremlin is moving to overhaul its Armed Forces after the August 2008 conflict with Georgia over its breakaway province, South Ossetia. Russian generals who did not expect such abrupt changes are learning about plans to scale down the General Staff and to set up a U.S.-style Rapid Deployment Force (RDF) from the media.
    On Wednesday, wire services quoted an anonymous Defense Ministry source as saying that the proposed RDF would comprise the Airborne Force, the Marines, commando units plus ground-attack jets and army-aviation helicopter units.
    On October 3, the Defense Ministry Board is to discuss the RDF's organization, administrative and troop-control divisions.
    "The media should comment on this report because we have heard nothing about the RDF," Yury Ivanov from the Defense Ministry's press service said.
    Several generals who denied reports of possible innovations were probably not briefed by reformist Defense Minister Anatoly Serdyukov, who has placed 20 civilian advisers in charge of implementing presidential military reforms.
    This May, Serdyukov openly clashed with former General Staff Chief Yury Baluyevsky, who was forced to resign on June 2. This sparked a crisis of trust between the defense minister and the General Staff.
    A Defense Ministry source said on condition of anonymity that the RDF would facilitate more effective troop control, because commanders of different Russian units did not always cooperate quickly during the South Ossetian conflict.
    The source said the term RDF had been coined by journalists, but that the creation of joint rapid-deployment units was now on the agenda.
    "Although they have been discussing the RDF concept for a long time, nobody is moving to create such forces. It appears that such declarative statements will not be backed by funding. This would make it impossible to promptly redeploy troops," Vladimir Yevseyev, senior research associate at the Russian Academy of Sciences' Institute of World Economy and International Relations, said.
    On September 18-19, NATO defense ministers met in London in an informal setting and agreed to examine a U.S.-backed plan for setting up tactical defensive rapid-deployment forces in NATO countries located near Russian borders.

    Vedomosti

    Gazprom is not putting all its eggs in Kovykta basket

    The giant Kovykta gas field, for which Russian energy giant Gazprom is going to clinch a deal, will not be the Russian gas monopoly's main asset for at least the next 20 years. This is the conclusion formed by Vedomosti after it had a look at Gazprom's general plan for the development of the gas industry through 2030.
    Before 2030, the annual output of Gazprom's gas condensate deposit in the Irkutsk Region (with C1 and C2 category reserves of 2.16 trillion cu m) is not set above 2.7 billion cu m (maximum design capacity), while the launching of Kovykta is dated for 2017-22.
    Rusia Petroleum (62.0% owned by TNK-BP International) has the license for Kovykta, but for a third year now the authorities have threatened to take it away for failure to observe its terms and conditions: since 2006, output was to have grown to 9 billion cu m a year, although the actual production is just above 30 million cu m. The company has tried in vain to have the terms changed: this volume was inked into the agreement in expectation that Gazprom would have an export pipeline to China, which is no longer part of its plans.
    And this at a time when the output at the Chayanda deposit in Yakutia (whose reserves are half as large) is forecast at 31.8 billion cu m per year (Gazprom has recently taken out a license for it). It is from this field that the gas pipeline towards China is planned.
    The Kovykta license was not recalled because last summer TNK-BP agreed to sell a stake in Rusia Petroleum to Gazprom, and the monopoly pledged to send up a new plan for Kovykta development. But the deal has still not been closed. A representative of the Natural Resources Ministry could not say yesterday whether his ministry would reduce the volume of production down to 2.7 billion cu m if the deal's conditions were altered.
    Gazprom CEO Alexei Miller recently told reporters that an agreement with TNK-BP could be reached within the next few weeks. But even if the deal goes through, Gazprom's plans show that it does not give top priority to the Kovykta project, said Konstantin Cherepanov, a KIT Finance analyst.
    A Gazprom spokesman declined to comment.

    Kommersant

    Shell bound for East Siberia

    Royal Dutch Shell is in talks to acquire 50% of Taas-Yuriakh Neftegazodobycha, a privately-held Russian exploration and production company with oil development operations in East Siberia and licenses to develop two adjacent blocks of the Sredne-Botuobinskoye oil and gas field in the region.
    It may cost Shell $1.7 billion to enter the project, but the deal will be subject to government approval because it involves a strategic field.
    Several oil-industry sources told Kommersant business daily that the British-Dutch oil major and Taas had signed a cooperation agreement last summer. However, they haven't signed any binding documents, one of them said, the other adding that the deal structure included setting up a parity venture with Taas owners contributing 100% of the company's shares and Shell $1.7 billion.
    Taas is part owned by Urals Energy, a small independent exploration and production company with operations in Russia. (One of its co-owners and CEO is Leonid Dyachenko, ex-husband of former President Boris Yeltsin's daughter.) Urals Energy holds 35.33%, and 10.5% is held by Ashmore Investment Management, a British investment fund.
    Urals Energy estimates its share in the field's reserves at around 34.6 million metric tons (proven plus probable reserves according to international classification). The field contains an estimated total of 98 million tons of oil.
    Shell so far has two production assets in Russia, a 27.5% share in Sakhalin-II, an offshore oil project in the Sea of Okhotsk, and 50% of Salym Petroleum Development, the operator of the Salym group of oil fields in the Khanty-Mansi Autonomous Area.
    The Financial Times said in early August that Shell could swap its stake in the Salym project for a stake in its partner, Sibir Energy. The daily updated the information this week saying that the deal would be closed before yearend and that Sibir Energy had postponed its plans to upgrade to full London Stock Exchange listing till next June, so as to have some management resources free to handle the Shell deal.
    If the Taas deal goes through, it will be still subject to government approval, one of the oil industry sources said. A source close to the Natural Resources Ministry confirmed that the area was on the list of strategic deposits currently being finalized. Any deal to buy 50% or more in such projects needs to be agreed with a government commission.
    This deal, if approved, will show that the law on strategic deposits is not prohibitive for foreign investors, said Valery Nesterov from the Troika Dialog brokerage.
    Shell needs the asset because there aren't many new large oilfields anymore, said Solid brokerage analyst Denis Borisov, especially after Shell had to sell half of its stake in Sakhalin-II to government-owned Gazprom last year.

    Novye Izvestia

    Moscow ranks with world's top five most dangerous cities

    Moscow has become one of the world's five most crime-ridden cities. According to Foreign Policy, the local crime rate is 9.6 murders per 100,000 people a year, with the total population of 10.4 million.
    Russia's Interior Ministry was skeptical about the accuracy of the U.S. magazine's estimate, but local analysts are convinced that their American colleagues even underestimated the danger, and Moscow sees many more murders than that.
    Venezuela's Caracas tops the list of Foreign Policy's five most dangerous cities to live in, with 130 murders per 100,000 residents, without considering crimes committed in prisons and during taking into custody. Moscow was also "outdone" by New Orleans, the United States, with 67 murders per 100,000, Cape Town, South Africa (62) and Port Moresby, the capital city of Papua New Guinea (54).
    Russia's legal authorities dismiss Moscow's inclusion in the most dangerous spots list as reflecting the international community's wariness of Russia as a whole.
    "Just think of it, Moscow and the capital of Venezuela together on that list! Sounds like a political media campaign to me," raged Oleg Yelnikov, head of the Russian Interior Ministry's press center.
    Plain statistics in fact confirm that American analysts have been inaccurate, underestimating the danger of living in Moscow. The Moscow government website reports 1,101 killings in Moscow in 2007. One can easily calculate that it makes the murder rate 10.58 per 100,000 people, with the total population of 10.4 million.
    "Statistics are easy to manipulate," Yelnikov said. "Even if the total number of crimes is objective, who knows how many people lived in Moscow at the moment - maybe 15 million!"
    Criminal experts admit that Moscow and Russia as a whole have long been leaders in crime. "Russia ranks third after Columbia and South Africa by incidence of murders. We live in a country with a huge gap between a small group of super-rich people and a mass of poor population," said Prof. Yakov Gilinsky, a well-known criminal law expert.
    The expert estimated the average murder level in Russia at 20 per 100,000. "Last year the rate dropped to 15, according to the Interior Ministry's statistics. But it could have been manipulated because the legal authorities have an unacknowledged instruction to qualify as many murders as they can as manslaughter."


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