Robert Amsterdam

Prime Minister Vladimir Putin has announced that his deputy, Igor Sechin, will manage a multibillion-dollar project to give Russia a modern fleet of ships for its "flourishing" energy sector. High oil prices are putting a strain on US oil refiners, forcing them to cut production rates. BP's Russian venture, TNK-BP, says court action by a small Moscow brokerage has stopped it from using key specialist staff. Zarubezhneft has confirmed plans to join forces with Vietnam's state-owned oil producer, PetroVietnam, in developing Arctic fields in Russia. Ukraine’s energy costs are now “significantly higher than for Russian peers, but most have retained a competitive edge over European counterparts”. The European Commission has ordered an in-depth investigation into plans by Norway's StatoilHydro to buy 274 automated petrol stations in Norway, Sweden and Denmark from ConocoPhillips.

A new survey of business graduates suggests that the reputations of key emerging markets, including Russia, Eastern Europe and Asia, “discourage the best talent from working there.” State arms exporter Rosoboronexport is preparing a $4 billion arms contract with Saudi Arabia. International department store chain Stockmann closed its flagship Moscow location until further notice, following a rental dispute. Doninvest Group, the Russian partner of Hyundai Motor Co., will build a $650 million auto-parts factory in South Korea. The Moscow Times suggests some strategies for combatting inflation - could the answer lie in the Federal Reserve? Mobile phone operator MegaFon could invest around €3 billion ($4.64 billion) to build a GSM network in Iran. The Kurdish and Russian chambers of commerce have signed a protocol of agreement in Erbil, which could lead to more active investment between the two. The government “faces an uphill battle as it seeks to promote Russian business abroad in the face of widespread fear of overdependence on the country's politicized economy.”

TODAY: Judge admits pressure from the Kremlin; US military attachés made “uninvited visit” to aviation factory; Abkhazia leader wants Russian military base for “protection”; Moscow Mayor barred from entering Ukraine; Joseph Stalin, a national hero?

Yelena Valyavina, first deputy chair of the Supreme Arbitration Court, has testified in court that a Kremlin official threatened to cut off her career if she did not follow his instructions. Her lawyer called the testimony “an exceptionally courageous and heroic act”. The story has been picked up by The Other Russia. The State Duma is expected to consider two bills that would extend the powers of judges over people with suspended jail terms. Anna Politkovskaya’s killer may have been charged, but his whereabouts are unknown and one journalist comments, “The prosecutors may be getting ahead of themselves if they think they have solved the murder.”

Continue reading "RA's Daily Russia News Blast - May 14, 2008" »

Marshall Goldman of Harvard University tells Bloomberg that the actual amount of power being transferred in Russia could be gleaned from the age difference between Medvedev and Putin, where each of them live, and reminds listeners that in theory Medvedev does have the power to fire Putin at will and appoint someone in his place (though Goldman doesn't think this could happen for about four years). The good professor also talks about the "spooky," "James Bond-like movie set" of his visits to the Gazprom headquarters, more than 12 cases of Russia using energy as a political weapon, and comments on the runaway inflation in Russia caused by Dutch disease.

Listen to the podcast here.

Back behind bars…

«Oborona» movement coordinator Oleg Kozlovsky arrested

Grigory Pasko, journalist

Если Вы хотите прочитать оригинал данной статьи на русском языке, нажмите сюда.

The meanness of this arrest, like, by the way, the previous one as well, is in the fact that Oleg was arrested on the eve of the conducting of a large democratic event – the National Assembly, which will take place in Moscow on 17 May. The last time, they arrested Oleg on the eve of the conducting of a Dissenters’ March and sent him off forcibly to serve in the army, although according to medical indications this was prohibited. By the way, for that crime, committed in relation to citizen Kozlovsky, nobody received punishment.

Oleg Kozlovsky (photo by Grigory Pasko)

Continue reading "Grigory Pasko: Kozlovsky Back Behind Bars" »

I got an interesting email from reader R.K. this morning...

Hey James,

Just wanted to let you know that last night on the Late Show with David Letterman, they did a short funny bit replaying clips of all these different news anchors (and of course Hillary Clinton) caught mispronouncing Medvedev's name.

Then, right when the bit ended, Letterman looked into the camera and ad-libbed - "You know it doesn't even matter because he's just one of Putin's cronies...," while shaking his head in cynical disapproval.

The surprising comment was greeted with silence from the crowd, while his hype man in the band Paul Shaffer quipped, "Is that you speaking here? Because you usually don't go political..."

And from there the show continued on without further comment.

Cheers,
R.K.

First we had Obama Girl over in the United States - an incredibly popular YouTube phenomenon which bolstered the sex appeal of the Democratic candidate with no shortage of humor. Now it appears a Russian spoof version of the video has been made, pushing the sex appeal of the new president, Dmitry Medvedev, with the overdubbed crooning of a curvy brunnette model: "You came into politics together with Putin," she sings breathlessly (and obviously dubbed) in Russian, while staring longingly at the new leader. "I didn't want anyone else as much as I want you. … I need to be sexy and cool with you. I've got a crush on a bear." (Moscow Times). Check out the video after the cut.

Continue reading "The Debut of Medvedev Girl" »

By Derek Brower, journalist

Who really loses from the sanctions on Iran?

THE DECISION of Shell and Repsol to pull out of phase 13 of the development plans at South Pars, Iran’s section of the biggest gasfield in the world, will no doubt be seen as a victory by the hawks in Washington. The companies haven’t officially said why they have withdrawn from the projects, but the subtext is clear: sanctions on Iran are biting, and the majors are backing off.

There is no question that the news is a blow to Iran’s liquefied natural (LNG) gas plans. Gas from phase 13 was to have gone to Persian LNG, one of several export plans on the drawing board in Iran. Shell says it hasn’t yet decided whether to proceed with that $10bn development. But, along with Repsol, it hasn’t ruled out participating in future phases of South Pars and, according to reports, the two companies could still act as technical advisors to Nioc, the Iranian state oil company.

Continue reading "Derek Brower: Cutting one's nose off..." »

Ukrainian prime minister Yulia Tymoshenko has cancelled a license for a strategically important hydrocarbon exploration project, openly accusing Vanco Energy, which is leading the venture, of “holding backroom talks with Gazprom.” Vladimir Putin’s appointment of Sergei Shmatko as the new energy minister “could lend more emphasis to atomic power.” Unified Energy System will hold two shareholder meetings this month to discuss reorganization before the company is liquidated. The Kazakh government could impose sanctions on the Western consortium developing the giant Kashagan oil field in the Caspian Sea if its operators delay the start of production again. LUKOIL chief Vagit Alekperov and vice president Leonid Fedun have spent $1.6 billion increasing their stakes in the company. Some blame Russia’s lack of democracy on the "natural-resource curse," which is “the theory that high oil and gas profits weaken economic and political development in the long term.” The Economist focuses on the uncertain future of emissions trading. A Hungarian business court has rejected a lawsuit brought by Austria's OMV against Hungarian oil company MOL.

Magnit, Russia's second-largest supermarket chain, said first-quarter profit climbed 71%. The board of Russia's top silver miner, Polymetal, has recommended not paying a dividend for 2007. Analysts at Barings Bank say Chinese demand for oil and commodities is driving Russia's growth, reducing its exposure to Western economies and offering good equity deals. Alisher Usmanov’s AF Telecom Holding has agreed to buy 58.9% in Telecominvest in order to increase its stake in MegaFon to 39%.

TODAY: Putin chooses new Cabinet, keeping former presidential officials in charge; tentative reports suggest Politkovskaya’s killer has been charged; EU, US and Canada weigh in on Georgia tensions; Zenit football club.

In a busy first week as Prime Minister, Vladimir Putin has moved several of his most powerful former presidential officials to the Russian government, “bolstering the view that he will remain the centre of national power as prime minister,” and leaving Dmitry Medvedev “cast adrift within his own administration,” as one UK journalist put it. Several members of the siloviki were reportedly demoted. Major changes include the promotion of Igor Shuvalov and Igor Sechin as deputy prime ministers and the appointment of nuclear energy businessman Sergei Shmatko as energy minister. Medvedev has replaced the Federal Security Service's longtime director with a veteran security agent who “could strengthen Medvedev's hand over the law enforcement agencies.”

Continue reading "RA's Daily Russia News Blast - May 13, 2008" »

Goldman Sachs has published a new report today revising their growth estimates for Russia's RTS stock market, increasing its 12-month target for the index by 12% to 2,750, implying a 20% potential upside. Huge. Simply put, the report declares that "Russia is currently one of the best global investment opportunities" and that stocks in the oil and gas and consumer sectors are strongly recommended.

It's one hell of an endorsement, and could make Dmitry Medvedev's first year as president quite comfortable. But not everybody buys into the GS hype (just read the comment thread below the article), and it does not appear they give sufficient weight to the risk posed by deficient rule of law, an extremely problematic oil sector (production has fallen four months in a row), and Gazprom's severe under-investment in developing new fields, driving them to strike deals as far away as Libya, Nigeria, and Bolivia.

We get it, we get it, it's the ruble play - but these extraordinary inflationary pressures are already causing protests over rising prices and could damage the outlook for consumer stocks recommended by Goldman.

How's this for a study in contradiction? Responding to a reporter's question about the easing of visa requirements for citizens of the UK to visit Moscow for the Champion's League final match between Manchester United and Chelsea on May 21, government official Alexei Sorokin told Bloomberg: "This is football, it's got nothing to do with politics. ... Maybe the Champions League final can help to unfreeze diplomatic relations between our two countries.''

OK, that's a breathtaking spin ... so sorry about that nettlesome Litvinenko murder, harassment of the British Council and your ambassador, and for stealing from BP - the Kremlin appears to be telling the British public - but here, we'll cut some red tape and host 50,000 of you for 72 hours for a football match. Are we even now? Taking a page right out of the book of Putin's most similar homologue, Venezuelan President Hugo Chavez, Russia appears to be directly lobbying British citizens to improve its tarnished image. Perhaps next we'll see some discounted petrol or heating oil for the U.K.'s poor.

Russia's latest sports diplomacy (not the first) is just one of many other signals quietly coming from Moscow that the period of confrontation with London is over for now, and that Russia wants relations to improve.

Continue reading "Russia's Football Diplomacy" »

I don't know how I missed this great column by Ron Rosenbaum on Slate from Friday, but here it is. Rosenbaum asks a very reasonable question: does Russia's renewed interest in flexing its military might increase the possibility of an inadvertent, accidental nuclear catastrophe? The article provides a rather comprehensive review of the current early warning systems in place to prevent accidents ... and it is absolutely terrifying how these procedures are lacking.

In my last column on this subject, I suggested it was time for both the United States and Russia to publicly define and defend their warning and launch procedures. I've now come upon a persuasive set of concrete, achievable steps both countries can take to lower the risk of an accidental launch. These steps would extend the all-too-brief window we now have to evaluate attack warnings, the better to distinguish "false positives" from the real thing. And thus extend the time the presidents of both nuclear superpowers have to decide how to respond. Our current warning decision procedures—both U.S. and Russian—make our nuclear arsenals all too vulnerable to accidental or unauthorized launch. To inadvertence, as the nuclear euphemism has it.

It's time to avert "inadvertence."

Ed Lucas has a new piece in the Daily Mail today, which he says is "subtle, nuanced (but heartfelt)." At least he hasn't lost his sense of irony:

Make no mistake: Mr Medvedev's job is to put a presentable face on the sinister regime that runs Russia.

He may criticise, rightly, Russia's colossal corruption, shambolic public services, crumbling infrastructure, soaring inflation, grotesque abuses of power, sprawling bureaucracy, and overweening state intervention in the economy. But that does not mean he can or will do much about them.

A system that has proved so hugely lucrative to the hard men in the Kremlin is not going to disappear over night, if at all. Mr Medvedev's "hurrah chorus" say that the ruthless tycoon-bureaucrats of the Putin regime will be pensioned off.

They will either accept their "severance packages" of a few billion dollars or they can join Mikhail Khodorkovsky, the oil baron who was once Russia's richest man, in his prison cell near the Chinese border.