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    Russian Press - Behind the Headlines, September 20

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    Russia Admits Guilt of SSJ Crew for Indonesia Crash / Rosneft Closes in on BP Stake in Russian-British Venture


    Russia Admits Guilt of SSJ Crew for Indonesia Crash

    On Wednesday, representatives of the Russian Trade and Industry Ministry in Indonesia signed a protocol accepting the findings of local experts, who concluded that the crash of the Russian SSJ-100 on May 9 was caused by human error: the pilots did not react to the terrain and traffic collision avoidance system’s warning.

    Indonesia’s National Transportation Safety Committee (NTSC) has completed the investigation of the crash and is coordinating its results with the interested parties, primarily with Russia, which owned the plane. The Russian delegation went to Indonesia on September 12 and signed the acceptance protocol on September 19.

    It was a mere formality, since the Russian ministry already signed an identical protocol four months ago, 12 days after the crash. That document says that all of the aircraft’s systems and units were in full working order, including the Terrain Warning Awareness System  which issued a terrain hazard warning.

    On May 9, a Sukhoi SuperJet-100 piloted by Alexander Yablontsev was making a demonstration flight in Indonesia, which was planning to purchase the aircraft. Trying to show off the plane at its best, the pilot took it to a dangerously low altitude and circled instead of turning back as planned. The experienced pilot flew the plane very well but made a fatal mistake at the end of the maneuver: he turned south into the mountains instead of north toward the airport. He further ignored the TWAS warning, believing that he was flying over a plain. As a result, the SSJ crashed into a mountainside at Mount Salak, killing all 45 people on board, including the crew.

    This reconstruction, which clearly points to mistakes made by the SSJ-100 crew, was approved by the experts of both countries in summer. The point on which they could not agree was not the reason for the crash, but the so-called contributing factors. The Russian delegation has forwarded its dissenting opinion to the NTSC and asked its Indonesian colleagues to evaluate the performance of the flight controller. The Russian experts believe that permission for the SSJ-100 to descend to the dangerous altitude of 6,000 feet was incorrectly given, and that the flight controller was too busy monitoring other flights to realize in time that the SSJ was flying toward the mountains.

    The Russian experts, who did not officially take part in the investigation, admit that in accordance with the international procedure the NTSC can include their reasons in their report or leave them out, without explaining their reasoning. This is in fact the main intrigue of the investigation, which is not officially over yet. The NTSC report is to be coordinated with the French producers of engines and the U.S. manufacturers of navigation systems for the SSJ-100. Experts say this could take several weeks, and so the conclusions will not be made public before October.


    Rosneft Closes in on BP Stake in Russian-British Venture

    President Vladimir Putin met with several oil sector executives on Tuesday to discuss BP’s potential expansion in Russia and Rosneft’s progress in negotiating the acquisition of BP's 50% stake in its joint venture with its Russian partners TNK-BP.

    Putin met BP chief executive Robert Dudley and chairman Carl-Henric Svanberg, and head of Rosneft Igor Sechin at his Black Sea retreat in Sochi to discuss "expanding" BP's presence in Russia, his spokesman Dmitry Peskov said. However, neither he, nor the Rosneft or BP press offices could explain why the Rosneft chief was also present.

    A source close to one of the companies said Rosneft and BP representatives had informed the president on the progress of their planned deal, but no breakthrough is expected following the meeting.

    Under the TNK-BP shareholder pact, only local shareholders represented via the Alfa-Access-Renova (AAR) consortium can agree to buy out BP before a mid-October deadline, or 90 days since AAR notified BP it wanted to change the shareholding structure on July 18. After that, other buyers can strike a deal if BP and AAR fail to reach an agreement. BP has to be careful to choose the best offer for both itself and TNK-BP, otherwise AAR may contest it in court.

    The talks have slowed, according to sources close to AAR. “The consortium offered to buy 25 percent of the shares, but BP said it was determined to sell the entire stake,” the source said. AAR is more interested in negotiating a deal than ever, but BP is too focused on a deal with Rosneft. The state company is certainly a better option, because the deal can include certain strategic agreements. Moreover, its hired management would not have any misgivings about making an above-market offer because it is government money they are spending rather than their own, the source added. Mikhail Fridman, one of the Russian shareholders of TNK-BP earlier valued a 25 percent stake in the company at $7-$10 billion.

    A Rosneft representative declined to comment on the talks while a BP spokesman said they were at the initial stage. BP does not plan to present a draft contract to potential buyers until next month, a source close to AAR said.

    Rosneft is already talking with banks about raising a loan of up to $15 billion to pay for a stake in TNK-BP, Bloomberg reported on Wednesday, quoting banking sources. Rosneft had a balance of some $4.5 billion as of the end of the second quarter, which, along with the borrowed financing, should be enough for the deal, said Denis Borisov, a Nomos Bank analyst who puts TNK-BP’s market value at around $47 billion.

    An asset swap could bring the price of the deal down, but Rosneft has already signed deals with other partners over the development of its most promising fields, including Norway’s Statoil, Italy’s Eni and U.S. company ExxonMobil. The latter obtained three exploration blocks in the Kara Sea that BP had wanted for itself last year.

    RIA Novosti is not responsible for the content of outside sources.



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