Russia’s biggest oil firm Rosneft on Friday called “very interesting” a proposal from BP to take an equity stake in a deal that could see the British group quit its troubled TNK-BP joint venture.The comments by Rosneft CEO Igor Sechin — the right-hand-man of President Vladimir Putin on energy — intensified expectations that Rosneft will acquire the 50 percent stake BP wants to sell in its lucrative Russian business.
The announcement came just a day after reports said Rosneft was seeking a $10-15 billion loan to buy BP’s half of a lucrative but fractious company it runs with some of Russia’s best-connected and most powerful businessmen.
“We think this is a very interesting proposal,” Sechin told reporters at a company board meeting in the Black Sea port of Sochi.
The Russian oil champion and BP last year tore up a $16 billion share swap and joint Arctic oil exploration agreement after it was successfully challenged by the TNK-BP oligarch shareholders who wanted the deal for themselves.
The venture pays BP billions in annual dividends and was last year responsible for about a quarter of its oil output.
But it has also been the source of constant board battles and a drag on the company’s stock because of occasional interventions from the Russian state on the side of the billionaires.
The sale by BP of its entire TNK-BP stake for cash and shares in Rosneft could bolster its shaky standing in the world’s largest oil producing country and give it potential access to coveted Arctic oil.
Putin unexpectedly received BP’s chief executive and chairman for closed-door talks this week that Sechin said included a formal proposal from the British firm to swap shares under a TNK-BP buyout arrangement.
Sechin did not directly address the swap possibility while admitting that his firm was looking at “market mechanisms” that could ease through a deal in which BP could end up holding about 12.5 percent of Rosneft’s shares.
But he stressed that the two sides would not be pressed into immediate action by market expectations — ones fuelled in part by Putin’s own announcement that Rosneft would welcome foreign partners at this stage.
The Vedomosti business daily reported that the government had still not approved the share swap idea because cabinet liberals wanted to keep Sechin from expanding the state’s sway over the private oil sector.
A deal would represent a triumph for BP after a year in which it saw its biggest competitors — from Texas-based ExxonMobil to Italy’s ENI and Norway’s Statoil — strike big deals to develop some of the world’s most sought-after sections of the sea.
Rosneft had 12 offshore fields to licence in recent months and has decided to select foreign partners who have not only the experience and technology but also financing and their own global assets to offer in return.
It has already awarded seven contracts and has only two Arctic lots left in separate sections of the Barents Sea.
The possibility of losing out on those last offers and then leaving its TNK-BP venture would have been a brutal blow to BP chief Bob Dudley after a decade of tireless efforts to build better Kremlin relations.
The British group reaffirmed on Friday that “BP is considering further investment in Russia regardless of who we sell our stake to.”
“Therefore if we are successful in selling our stake in TNK-BP then we would be interested in investing some of the proceeds in buying shares in Rosneft,” it said in a statement.
Rosneft meanwhile announced agreeing with state energy export monopoly Gazprom — the only other company with rights to Russia’s Arctic energy fields — a plan to “jointly operate offshore field development infrastructure.”
The announcement came the same day number two producer Lukoil became the last major Russian private oil company to concede that it stood no chance of joining forces with Rosneft in the north.
“We have halted our negotiations,” Lukoil chief executive Vagit Alekperov told reporters in Sochi.

As Russia’s Prime Minister and President-elect Vladimir Putin prepares to reoccupy the Kremlin in May, the country’s Economic Development Ministry has been forecasting nothing but a bright future. The global economy would face two major crises before 2030, either of which could lead to a long period of slow economic growth, said the ministry. The resulting global slowdown would lessen demand for Russian goods, particularly hydrocarbons, and that, in turn, would compel the government to cut down on social spending. However, a future global financial crisis could also make Russia stronger by providing the right incentives to reform the economy, the ministry said.

The ministry suggested two possible scenarios for the country’s economic development until 2030: the “innovation” or “best case scenario” and the “conservative scenario,” where energy resources will play the main part in the economy. Under the best-case scenario, Russia’s gross domestic product (GDP) is expected to grow at an average of 4.4 percent annually until 2030 – far below the six to seven percent growth promised by Putin, Deputy Minister Andrei Klepach told journalists on Friday. In the so-called conservative scenario, which relies on Russia’s energy and raw material potential, Russia’s long-term economic growth will not exceed 3.5 to 3.6 percent per year. This compares with the ministry’s own GDP growth estimate for 2012, which was reversed to 3.4 percent from 3.7 percent projected earlier. Last year, Russia’s economy grew by 4.3 percent. “In either case, Russia expects to maintain a balanced budget, with the size of public debt not exceeding 20 to 25 percent of the GDP by 2030,” Klepach said.

A comparatively lower public debt will give the government a lot of room for budget maneuvering. “Spending on innovations will consume only 2.2 percent of the GDP or six percent of the total budget spending on average, and will increase to 2.8 percent of the GDP by 2030,” Klepach said. Spending on the economy will increase to 7.1 percent of the GDP in 2030 from five percent in 2011. Education spending as a percentage of the GDP will grow from four percent last year to 5.3 percent in 2030, while health expenditures will climb from 3.9 percent in 2011 to 5.1 percent in 2030. However, defense spending will drop to 3.7 percent of the GDP in 2030 from about 5.5 percent last year, and so will social spending – from 12.6 percent in 2011 to 11.4 percent in 2030.

The Russian economy will expand at a faster pace than the world economy under the best case scenario, with its share of global GDP reaching 37 percent in 2030, up from a mere three percent in 2010. Russia will increase its natural gas production from 670.5 billion cubic meters in 2011 to 900 billion cubic meters by 2030, while oil output is expected to remain at 510 million tons over the same period. The scenario also assumes that oil prices would remain at $105 per barrel from 2011 to 2015, rising gradually to $151 by 2030. Russia is also expected to leapfrog ahead of other European countries to close the gap in income per capita and the quality of life of its citizens. Per capita income is expected to increase from 48 percent of the euro zone level to about 95 percent in 2030, while the share of the middle class will rise from 22 percent in 2010 to around 48 percent in 2030.

But the principal risks ahead are lower oil and gas prices that could result from a decline in global demand. Oil and gas revenues would drop by half from 11 percent of the GDP in 2012 to 5.3 percent in 2030, according to the ministry’s long-term forecast. However, the level of overall consolidated budget receipts is expected to dip only slightly, the ministry said. “Income projections into the budget system will remain relatively stable in the long term – or more precisely – they will decline slightly: from 38 percent of the GDP in 2012 to 37 percent of the GDP in 2020, and down to 35 or 36 percent of the GDP in 2030,” Klepach said. Even such semi-stable growth potential might not compensate for the projected losses in oil and gas revenues, he said.

To achieve macroeconomic and structural policies set out in the optimistic scenario, the government hopes to expand the tax base and improve the system of current tax collection in addition to significantly changing the structure of government spending. The government also needs to roll back subsidies on public utilities such as gas and electricity and cut back on the number of state officials. The measures, which the government will consider on April 26, should enable the budget system to support the modernization of the economy, said the ministry. “Economic stability would be maintained by reducing the budget deficit level to 1.5 to two percent of the GDP by 2025,” Klepach said. “But even those measures will not completely save the budget or significantly reduce the non-oil deficit.”

On May 20 May, the ship Sedov will set out on a 14-month circumnavigation from St. Petersburg. The ship is entered into the Guinness Book of World Records as the world’s biggest sailing vessel. Built in Germany in 1921, the legendary Sedov is taking this latest voyage to celebrate Russia’s 1150^th anniversary. The first tribal union under the Rurik dynasty is believed to have emerged in 862 in the north of Russia. The ship will cross three oceans and visit 21 countries.

There will be 200 people on board, half of whom will be cadets from the Murmansk State Technical University, who will work on shifts during the voyage. The cadet groups, which are made up entirely of second year students will change twice: in Casablanca, Morocco, and in Vladivostok, in Russia’s Far East.

“To tell the truth, I’ve never been abroad. This will be a huge experience for me, as well as a great opportunity to see the world,” said Dmitry Stolpovsky, an 18-year-old cadet.

Stolpovsky, who will join the project in Casablanca and stay on board as far as Vladivostok, says his parents are very proud he was picked for the project. Yet the desire to see the world is not the only reason motivating Stolpovsky: His favorite rock band Mumiy Troll will also be on board.

“The main idea of this voyage is to show the flag. Russia is the world’s biggest naval power, and we must show to the world that we are open to everyone and pursue peaceful goals,” said Alexander Savelov, spokesman for Russia’s Federal Agency for Fishery. The Sedov, which is owned by the agency, will be its first circumnavigating the globe for the first time.

“I am a fan of Mumiy Troll. It’s great they will be with us. They are real stars and, I hope they will remain on board until the end,” Stolpovsky said.

The members of Mumiy Troll, which was formed in Vladivostok in 1983, promise to fulfill the cadet’s dream. “The idea of recording an album during a sea voyage goes back to my childhood. It began to take real shape more than a year ago, during our Navy Tour voyage, when we staged concerts on Russian warships,” said the band’s lead singer Ilya Lagutenko

Mumiy Troll is extremely popular in Russia and many of its songs are about the sea. They hope that through the voyage they will attract more fans around the world.

At the 30 ports where the Sedov will drop anchor, the sailors will welcome locals on board. “In cooperation with Russia’s Ministry of Foreign Affairs, embassies, consulates and other representatives of Russia, various cultural and entertainment events will be staged on the ship,” Savelov said.

Lagutenko said that the events could be used to show locals a new side of Russia: “The ship’s arrival in any country shows not just our flag but also our friendliness.”

It will be the fourth round-the-world tour for the Sedov’s captain, Nikolai Zorchenk, yet he says the journey never gets old. “Brazil, Chile, Peru – these are all new, exotic places for me, and I very much want to visit them,” Zorchenko said. The countries the Sedov will visit include Germany, Sweden, Norway, France, Morocco, the United States, South Korea, Japan, China, Singapore, Mauritius, South Africa, Senegal, Spain, Brazil, Uruguay, Argentina, Chile and Peru.

“It was not very difficult to organize the trip, only it isn’t so cheap. The project will be bankrolled by the state budget and private companies, including [Russia’s second-largets natural gas producer] Novatek,” said Savelov.

While Italy’s largest oil company Eni announced an impressive 13-percent increase in first quarter profits on Friday, the company’s new accord with Russia’s Rosneft to explore the untapped reserves of the Arctic Sea promises more growth in the future.

Eni announced an adjusted net profit of 2.48 billion euros (3.29 billion U.S. dollars) for the quarter driven by the resumption of production in Libya and higher oil prices.

The company’s Chief Executive Paolo Scaroni welcomed what he called “excellent results” and noted that the strategic agreement it endorsed with state-controlled Rosneft this week was a good sign for the future.

“I’m very pleased with the agreement we have signed with Rosneft as it underpins our exploration opportunities for many years to come, further boosting our prospects of long-term growth,” Scaroni said on Friday.

Scaroni and Rosneft President Eduard Khudainatov signed the accord in Moscow on Wednesday in front of Russian Prime Minister and president-elect Vladimir Putin.

It provides for the joint development of licenses in the Black Sea and the Barents Sea, exchange of technology and personnel and Rosneft’s acquisition of a participating interest in Eni’s international projects.

The deal follows a similar accord reached recently between Rosneft and U.S. energy giant ExxonMobil in which the Russian company will get a 30-percent stake in projects in the United States, the Gulf of Mexico and Canada in exchange for access to Arctic and Black Sea reserves.

Under the latest accord, Eni will take a 33.33-percent stake in the project while giving the state-controlled Rosneft access to Eni projects outside Russia.

“Rosneft is committed to doing business with world-class majors that have offshore production expertise, cutting-edge technologies and are ready to invest in long-term hi-tech projects in Russia,” Khudainatov said.

“I strongly believe that our partnership will help boost the two companies’ resource base and capitalization,” he said.

The companies will explore the Fedynsky and Central Barents fields in the Barents Sea and the Western Chernomorsky field in the Black Sea — offshore fields estimated to have total recoverable reserves of 36 billion barrels of oil.

Rosneft believes the Barents Sea fields are very promising because of their proximity to an offshore area in Norway where at least three large fields have been discovered in recent years.

Seismic data and the recent discovery of hydrocarbons in the Romanian section of the Black Sea means it is highly likely that oil and gas will be found at the Western Chernomorsky field, according to the company.

Eni is thrilled with the potential of the new exploration which will begin amid what it described as a “challenging” economic slowdown and volatile market conditions in 2012.

“We have gained access to two vast and extremely promising areas in Russia, a great hydrocarbon producer,” Scaroni said.

“This success is the result of our long standing relationship with Russia, of the recent developments in west Siberia upstream and of our discoveries in the Norwegian Barents Sea, the first in the area,” he said.

Professor Carlo Andrea Bollino, an energy economist at Luiss University in Rome, told Xinhua that the new accord was significant.

“This is important because the Arctic could be the new frontier. It is close to Canada and it is close to Russia,” Bollino said. “It is very important for the explorations of these fields.”

“The significance of this deal is demonstrated by the fact that Putin was present. It was blessed by the Russian president-(elect),” Bollino said.

In its 2012 market outlook released on Friday, Eni said it expected international oil prices to be supported by growing demand from China and other emerging economies with a full year average price of 113 U.S. dollars a barrel for benchmark Brent crude.

Eni is looking to make Russia’s “first partner” in the production of hydrocarbons and together they will consider areas of interest in North Africa, Alaska of the United States and northern Europe.

Putin’s announcement this month that Russia would abolish duties levied on the exports of hydrocarbons produced in Russia’s Arctic offshore areas and a reduction in the mineral extraction tax has promoted fresh interest from foreign firms.

Last week, Eni started pumping hydrocarbons for the first time at the Samburgskoye field in Siberia and recently renegotiated its partnership with Gazprom, another Russian gas company.

The Italian energy giant also sees potential for growth in China after signing a production agreement with the China National Offshore Oil Corporation earlier in April.

In its earnings report on Friday, Eni said exploration of Block 30/27, which is 400 km off the coast of Hong Kong in the deep water of the South China Sea, had “high exploration potential.”

Eni has been present in China since 1980 and holds equity of 16.33 percent in two offshore Blocks located in the South China Sea (16/08 and 16/19), which have daily production of around 10,000 barrels a day.

The European Commission, which has begun talks with the EU’s biggest natural gas supplier Russia on cementing energy ties until 2050, said both sides had to work on burying carbon emissions or gas would have only a short future as a fuel.

Energy Commissioner Guenther Oettinger told an EU-Russia conference in Brussels that, for the 27-member bloc to continue using gas beyond around 2030-2035, it needed carbon capture and storage (CCS) technology to limit greenhouse gas emissions.

CCS captures climate-warming emissions from power plants and stores the carbon underground, for example in depleted natural gas fields under the sea. But the technology is commercially unproven and costly to build.

“Unfortunately, progress within the EU is very slow. I am also not aware of major activities in the Russian Federation on this issue. We have a joint interest to start working on this issue and develop joint activities,” Oettinger said.

Together with Russian Energy Minister Sergei Shmatko, the Commission has agreed to work on an “EU-Russia 2050 road map”, Oettinger said, to guide ties between the European Union and its biggest gas supplier.

The Commission, the EU executive, is also seeking a legally-binding EU-Russia agreement, which it has been negotiating with Moscow since 2008.

Relations between the two sides have often been tense as the Commission seeks to reduce its dependence on Russia and to liberalise its internal market.

THIRD ENERGY PACKAGE

Russian pipeline gas export monopoly Gazprom has taken issue with EU law requiring a separation in ownership between suppliers and infrastructure, such as the Nord Stream pipeline, majority-owned by Gazprom, which runs from Russia to Germany.

Gazprom is also leading the South Stream pipeline project into southern Europe.

Oettinger said the EU was “prepared to look at specific cases, with the aim to find pragmatic solutions within the given legal situation”.

Ilya Galkin, a senior official in the Russian energy ministry, welcomed the prospect of “a new long-term policy”, but said the EU law known as the third energy package was a problem for investment security.

“We have received expressions of interest regarding investment into the South Stream project from many EU countries.”

“They support this project directly, but the situation is quite unclear, as far as the protection of investors is concerned,” he added.

The South Stream is a rival to Commission-backed plans to bring in gas from Central Asia and the Caspian through a route known as the Southern Corridor as an alternative to Russian supplies.

Oettinger said this did not contradict its relationship with Russia, the EU’s prime gas supplier.

“We will continue our efforts to ensure a direct and sizeable access to the hydrocarbon source of the Caspian and Central Asian region. We ask Russia to respect our choices and the choices of the countries in the region.” (Editing by Anthony Barker)

Russia has formed an anti-piracy naval task force in the Mediterranean, the Northern Fleet press service said on Saturday.

The force, to be led by the Udaloy class destroyer Vice Admiral Kulakov, will combat piracy in the most dangerous part of the world’s oceans, press chief Vadim Serga said.

The task force will arrive in the Gulf of Aden in early May to join an anti-piracy mission off the Somali coast.

The new task force will replace the Russian Pacific Fleet’s task force led by the Admiral Tributs destroyer. The Admiral Tributs, the Pechenega tanker and a rescue tugboat arrived in the Gulf of Aden on January 12 and escorted five convoys of commercial ships since then.

Task forces from the Russian Navy, usually led by Udaloy class destroyers, operate in the area on a rotating basis.

Russian warships have successfully escorted more than 130 commercial vessels from various countries through pirate-infested waters off the Somali coast since 2008, when Russia joined the international anti-piracy mission in the region.

Middle East investors are pumping $175 million into Russian power generator Enel OGK-5 in what is thought to be the largest injection by a Gulf investor into the country so far, members of the investment consortium said.

Italy’s Enel, which acquired a 56.4 percent stake in OGK-5 as part of reforms to break up Russia’s Soviet-era power monopoly, was not a party to the transaction.

Russia has been trying to attract investment from around the world for various projects and the Middle East’s oil wealth is a key area to tap. Investment so far from the region has been minimal, according to figures from London-based research firm Preqin.

“It’s the trillion dollar question,” Kirill Dmitriev, head of Russia’s $10 billion state-backed investment fund, told Reuters, when asked why Middle East investors were shy about investing in Russia.

Dmitriev runs the Russian Direct Investment Fund (RDIF), created last year to co-invest alongside foreigners to give them greater comfort in Russia’s uncertain business environment, often criticized for corruption. The RDIF is among the consortium of investors in OGK-5.

“There are real issues with investing in Russia but also major perception gaps,” Dmitriev added.

He said the RDIF fund was created because “there was the sense that there were large investment pools all over the world and yet there was no concerted effort to communicate to them the Russian value proposition.”

The Middle East investment is being made by AGC Equity Partners, Dmitriev and the private equity firm said.

Dmitriev said it was the largest Middle Eastern investment in Russia to date. Preqin said it has no record of any larger deals.

AGC sources and manages investments for clients including sovereign funds according to its website, and it has a dedicated team in the Middle East. The company represents a consortium of Middle East institional investors in the deal, AGC said.

“There are a lot of opportunities in Russia, we believe,” said Walid Abu-Suud, co-CEO of AGC Equity Partners. “It is a high-growth market, with under tapped investment potential (and) a well-educated professional labor market.”

“We believe a lot of the issues (of investing in Russia) would be alleviated by investing with the RDIF,” Abu-Suud said.

The deal to buy a 26.4 percent stake in Enel OGK-5 was announced in March, but the consortium announced at the time did not include the Middle Eastern investors.

The buyer group also comprises Xenon Capital Partners’s Rusenergo Fund and the Macquarie Renaissance Infrastructure Fund. They are buying the shares from Russian power group InterRao in a deal with a total value of $625 million.

“We think OGK-5 is going to show significant growth in EBITDA, in our view it was a good time to buy the asset,” said Hamid Gayibov from Xenon Capital Partners. “It promises a significant dividend yield.”

The government of Russia is wrapping up the technical details of a transit deal with the U.S. and NATO that is going to ease the Western coalition’s efforts to withdraw equipment from Afghanistan by 2014, according to the Ulyanovskaya Pravda newspaper. [1] The news came at a time when the Obama administration is promoting a reduction in the number of American troops in war zones outside the country. The opening of the NATO transit hub in the city of Ulyanovsk became possible after several meetings between Russia’s foreign affairs officials and NATO representatives in Riga, Latvia. The Russian newspaper also highlighted the projected amount of cargo containers (60,000-70,000) that are going to be shipped through Ulyanovsk from 2012 to 2014. The first twelve shipments of cargo from Afghanistan are planned to be destined to the United Kingdom, says Ulyanovskaya Pravda.

The Kremlin’s move drifts across the board of Russia’s regional strategy of containing NATO cooperation with the ex-Soviet republics in the CIS. It has not been a secret that Moscow was extensively involved in controversy with the U.S. and NATO base at Manas in the Kyrgyz Republic. According to ex-President Bakiyev of Kyrgyzstan, who was ousted from power as a result of the violent uprising (coup d’etat) in April 2010, “Russian anger at his decision to extend the lease on a US air base was a factor in his overthrow.” [2] A similar opinion has circulated in the hallways of the Obama administration as well, as Simon Shuster writes in the article for Time magazine. [3] Confidential sources in the government of the Kyrgyz Republic say that the Kremlin is behind crucial announcements related to the U.S. and NATO transit hub at Manas near Bishkek, including recent statements from the newly-elected President Atambayev. [4]

As the cat is out of the bag, it is unclear how soon President-elect of Russia Vladimir Putin will deal with the future arrangements over the prolonged stay of the U.S. and NATO personnel in Bishkek, since President Atambayev has been expressing displeasure with the Manas airbase lease extension. But local experts familiar with the “hidden drives” of Kyrgyz politics in Bishkek say that Moscow most likely will push for a re-adjustment of rhetoric regarding the base in Kyrgyzstan as Russia’s leadership is currently doing. The Obama administration is aware of the tricks that come with negotiations on the lease of the airbase in the Kyrgyz Republic. The key to successful savoir-faire regarding the Manas transit hub’s prospects after the 2014 deadline could be achieved through diplomatic channels between Washington and Moscow. Besides having geopolitical dominance in Kyrgyzstan, the Kremlin allows the Kyrgyz political establishment to have commercial opportunities in the Russian domestic market.

The Kremlin’s “carrot and stick” policy toward the corrupt regimes of Central Asia played well with the rulers of Kyrgyzstan. There is no exception with the current authorities in Bishkek either. Moscow evidently takes care of the Kyrgyz officials loyal to the leadership of Russia, as it did with the Kyrgyz ex-Minister of Defense Esen Topoyev who was awarded the position of adviser to the director of Russia’s state arms corporation Rosoboronexport after a significant boost to the Kremlin’s military interests in Kyrgyzstan. Mr. Topoyev was one of the major supporters of the Russian airbase (Kant) on the outskirts of Bishkek. Kant airfield is within a twenty-mile proximity to the U.S. and NATO transit hub Manas.

However, a withdrawal of the Western coalition troops from Afghanistan creates an unavoidable security dilemma for the leadership of Russia in the near future. Prior to the U.S. and NATO intervention in Afghanistan, the Kremlin along with Tehran was involved in arming the United Front of Afghanistan, then led by Ahmad Shah Massoud. [6] The twist with the case of the world-renowned arms dealer from Russia, Victor Bout, highlights another angle of the squabble regarding the Kremlin’s realpolitik approach. The Los Angeles Times newspaper’s investigative report into Mr. Bout’s arms-dealing activity revealed quite appalling information about his clandestine work in Afghanistan with Taliban commanders in the late 1990s. According to the LA Times article from 2002, Mr. Bout was “sheltered by a Russian government” while American and British officials had been investigating his questionable business. [7] Despite the obstacles, Victor Bout was arrested after a sting operation by the U.S. Drug Enforcement Administration in 2008 and extradited from Thailand to the United States in 2010. In April 2012, Mr. Bout was sentenced to 25 years in prison by a federal judge in New York. [8]

Meanwhile, the mainstream media in Bishkek accused Moscow of applying double standards in Kyrgyzstan by playing Manas airbase against the interests of the sovereign Kyrgyz Republic. Russia’s foreign affairs ministry responded to the Kyrgyz media allegations by pointing at the international treaties between Russia and NATO member states enabling the transportation of non-lethal goods via Russian territory. Foreign affairs officials also reminded Bishkek that a decision by Kyrgyz President Atambayev on closing the U.S. and NATO air operations in Bishkek after 2014 was welcomed by the government of Russia. [9]

President Dmitry Medvedev has said that Moscow is opposed to suspects on Russia’s wanted list being granted citizenship and residence permits in foreign countries.

When it comes to law-abiding citizens, he said, there is no problem. However, in case with people “who are wanted and pursued by the authorities, we believe such actions [as granting citizenship to those people] are unfriendly,” Medvedev said speaking at a joint media conference with his Finnish counterpart Tarja Halonen.

“We are confident that people who are suspected of or charged with criminal offences of the territory of any country should not be given [citizenship or a residence permit], especially in the situation when it refers to relations between two friendly… countries,” the Russian leader stated. “Actually, according to general rules such persons should be extradited,” Medvedev said. These people are unlikely to beautify Finnish society, or bring peace and quiet with them, he added.

After the Russian parliamentary and presidential elections in December 2011 and March 2012, the opposition’s protests in various parts of the country, mostly in Moscow, were temporarily sensationalized by some Western media outlets.

One of Russia’s richest men, oil oligarch Viktor Vekselberg has begun a High Court battle in London against Christie’s auction house. The businessman claims a painting his fund bought in 2005 is a fake and is demanding a $2.7 million refund.

Viktor Vekselberg filed the case with the Supreme Court of Great Britain against the world’s leading auction house, in 2010. The court fight is over the painting, Odalisque which Vekselberg’s company bought as a work by Russian painter Boris Kustodiev. However according to Vekselberg, an independent expert revealed the artwork couldn’t be by Kustodiev’s hand.

Careful analysis of the Cyrillic signature said to be that of Kustodiev and dated 1919 was made by leading Russian experts. The experts revealed that it couldn’t be made before the 1940s, as the artist died in 1927. Information that the artwork is a fake was made public in 2009. Odalisque then appeared on the pages of the “Fake Paintings Catalogue,” published by the Federal Cultural Heritage Protection Service.

Christie’s auction house still insists, that its attribution was correct and plans to hold another examination to prove their claim that the artwork is a Kustodiev.

An Iranian military source has said that Russian Army General Nikolai Makarov’s remarks about NATO’s missile defense system are in “obvious contradiction” to policies adopted by Russia’s high-ranking political officials.

At a media briefing after the talks, Guido Westerwelle stressed in particular that the new German federal government is ready to continue the strategic partnership with Russia because it meets the interests of both parties.

Both ministers also made a statement that the Nord Stream gas pipeline project, so important for the whole European community, is advancing at an appropriate speed and both countries will continue to develop it.

Sergey Lavrov also said that “We have discussed the disarmament issues and Moscow welcomes the German decision to ratify the adoptive Treaty on Conventional Forces in Europe (CFE Treaty). He added that Russia is always open for discussion of that topic.

“Russia expects closer co-operation with NATO countries on Afghanistan,” Lavrov said, “to effectively develop a common strategy.”

According to Sergey Lavrov, that would mean the development of a collaboration between NATO forces in Afghanistan and the Collective Security Treaty Organization (CSTO) forces, which regularly conduct operations against drug traffickers on Afghan borders.

RT political commentator Peter Lavelle pointed out that “these are the first events after getting a president of the EU, so this bilateral relationship goes on and this is the first test case in a way.” And although not enough time has passed to tell whether or not there was some real progress, “the German Foreign Minister is a very important person in Europe,” added Lavelle.

The US has confirmed that Russian troops will carry out joint anti-terror drills on American soil in May. Reports of the unprecedented initiative had triggered hysteria in American public debate, with claims of the US fraternizing with “the enemy.”

­Commander Wendy L. Snyder, US Defense Press Officer for policy told The New American in an e-mail the Russian soldiers will be invited by the US government.

This is part of a “formal bilateral exchange program between the US and Russia that seeks to develop transparency and promote defense reform,” she wrote.

Around twenty airborne Russian troops with arrive in Fort Carson, Colorado to take part in the training program targeting “terrorists”. It will be the first time Russian soldiers have conducted military training on American territory.However, the landmark news of the Russian troops’ arrival was not greeted with enthusiasm by everyone. Fear-mongering reports in US media called the exercise “a front” for the Russians to turn US weapons against the Americans and “take and hold Denver airport.”

Citing an erroneous report that it said came from the Federal Service for Military-Technical Cooperation, US website theblaze.com claimed just that.

“Russian airborne troops (using US weapons that they had previously trained with at Fort Carson) will fly to and then parachute from their planes having the objectives of seizing the CIA’s main computer facility in Denver, the NSA’s main computer facility in Bluffdale, Utah, and taking control of main runways and terminals of the Denver International Airport,” the publication wrote.

The report goes on to say the exercise is for the “evacuation of the key personnel and equipment previously ‘freed’ from the CIA’s Denver base.”

There is currently no information either in English or in Russian that describes such a drill on the Federal Service for Military-Technical Cooperation website.It is unclear where these reports originated, as RT verified with Russian Airborne Forces spokesperson Col. Aleksandr Kucherenko that he had said nothing pertaining to the capture of Denver airport.

RT reported on the story on Wednesday, citing Kucherenko who announced that “Airborne troops from Russia and the United States will hold joint anti-terror drills in the US state of Colorado between May 24 and 31.”

Besides the military drills, the Russian soldiers are expected to get a taste of local life at a baseball game in Colorado Springs.

Foreign troops operating and training in the United States have been a continuous bone of contention in American public debate.

Paul Watson, writing for prisonplanet.com says that their presence touches upon latent fears of “global UN peacekeeping troops being used to quell unrest inside America.”

Drills involving outside troops also raise worries that the US would have to “rely on foreign mercenaries to restore order, confiscate weapons or even incarcerate citizens during a national emergency, because of the likelihood that Americans would refuse to carry out such orders against other Americans,” Watson writes.

According to the Russian space strategy published on the Roscosmos website, Moscow has set several way-points for its space exploration activities — 2015, 2020, 2030 and the period after 2030.

Roscosmos will resume lunar exploration by 2015 using an unmanned space ship. Russia is also planning to send a manned mission to the moon by 2030, the space agency said.
In January, Roscosmos head Vladimir Popovkin voiced plans to set up manned moon research bases with European and US partners, saying there were plans to either set up a moon base or to launch an orbital station.
To that end, Russia is currently developing a “prospective manned transportation system” to be sent to the moon, he said.
Russia is also planning to send two unmanned moon missions by 2020, Luna-Glob (Lunar Sphere) and Luna-Resurs in 2015.
The launch timeframe, however, may be reviewed because the two spacecraft are being built with the same technologies as Russia’s failed mission to Mars moon Phobos, which proved vulnerable to cosmic radiation.
The Phobos-Grunt mission, launched in November last year, was designed to bring back rock and soil samples from Martian moon Phobos. However, it got stuck in an Earth orbit after its engines failed to put it on course for the Red Planet. The spacecraft fell to the earth in January.
The moon base project has similarities to Cold War-era plans to create a permanent outpost on the moon, which has been envisioned by some Soviet and US scientists since the late 1950s.

A Soyuz capsule carrying two Russian cosmonauts and a U.S. astronaut from the International Space Station (ISS) landed safely in Kazakhstan on Friday.
The Soyuz TMA-22 parachuted down onto the steppe in the former Soviet republic of Kazakhstan, landing on schedule and on target north of the town of Arkalyk after a three-hour descent from the orbital outpost.

Space officials, technicians and relatives of the crew watching footage on a big screen at Russian Mission Control outside Moscow burst into applause when footage taken from a helicopter showed the capsule touchdown.

“We are landing!” big block lettering on the screen said.

The cramped capsule brought veteran NASA astronaut Daniel Burbank and Russians Anton Shkaplerov and Anatoly Ivanishin back to Earth after nearly six months aboard the ISS.

Speaking on NASA TV, a NASA spokesman at the site said it had been “one of the most pinpoint and precise landings” of a Soyuz returning from the station.

Shkaplerov, the first to be pulled from the capsule resting on its side on the steppe, smiled and gave a thumbs up after support personnel sat him in a chair and wrapped a blue blanket over his legs, in spite of temperature of more than 70 F (21 C).

Ivanishin followed with a broad grin and then Burbank, who chuckled as he answered questions from medical personnel.

Their trip to the station in November was the first since the U.S. space agency NASA ended its 30-year shuttle programme, leaving the 16 nations investing in the $100-billion station to rely solely on Russia to ferry crews for the time being.

The mission had been delayed by safety fears after an unmanned Russian Progress craft taking supplies to the station broke up in the atmosphere in August.

That was one of five botched Russian launches the past year that marred celebrations of the 50th anniversary of Soviet pilot Yuri Gagarin’s first human space flight and hurt Moscow’s pride.

The launch failures included a long-awaited unmanned mission to return samples from the Martian moon Phobos.
Russian cosmonaut Oleg Kononenko, NASA’s Don Pettit and European Space Agency astronaut Andre Kuipers remain aboard the ISS, where they would arrive in December.

Russian stocks declined for the first week in three on concern President-elect Vladimir Putin’s new government won’t undertake changes necessary to reform the economy amid signs the global recovery is slowing.

The 30-stock Micex Index (INDEXCF) added 0.3 percent to 1,473.50 by the 6:45 p.m. close in Moscow, paring its steepest weekly drop in a month to 2.1 percent.

OAO Mechel (MTLR), Russia’s biggest producer of coal for steelmakers, lost 0.1 percent, while OAO EON Russia, the Moscow unit of Germany’s biggest utility, traded down 0.2 percent. OAO Aeroflot, the country’s largest airline, gained 4.1 percent, the most since Dec. 30. The dollar-denominated RTS Index was little changed at 1,593.97. Markets are open today to replace the April 30 public holiday.

Russia’s new government lineup is due to be announced after Putin’s inauguration on May 7. The former KGB officer, who was president from 2000 to 2008 before having to step down because of term limits, pledged during his campaign to boost pensions and support for small business. Emerging-market stock funds posted their third consecutive week of outflows on concern the European debt crisis may worsen, according to EPFR Global.

“Everyone is looking for some kind of a game plan from the new government,” Roland Nash, chief investment strategist at Verno Capital in Moscow, who helps manage $200 million in Russian equities, said by phone today. “There is a lot of uncertainty right now and the markets tend to hate uncertainty.”

Putin, who won his third term as president on March 4, has backtracked on a promise by current President Dmitry Medvedev — whom he asked to be his premier — to return to direct elections for governors, saying on April 11 that he will retain the right to veto candidates.

Euro Confidence, U.S. Jobs

Urals crude, the country’s main export earner, rose 0.2 percent to $117.36 yesterday, gaining 1.5 percent from last week, the first weekly advance in seven.

Oil may decline next week after economic confidence in the euro region fell and more Americans than estimated filed applications for unemployment benefits, a Bloomberg survey showed. Sixteen of 37 analysts, or 43 percent, forecast oil will retreat through May 4. Russia’s budget relies on oil and gas for about 50 percent of its revenue.

Under an Economy Ministry development proposal submitted to the government for approval, the oil and gas industry would make up about 10 percent of the country’s gross domestic product by 2030, from 20 percent currently.

Putin vowed to boost pensions and salaries for state workers and the military during campaigning, pledges that will contribute to a 4.8 trillion-ruble ($164 billion) increase in spending through 2018, according to Capital Economics Ltd. He also vowed to reverse “repressive” state policies and reduce government holdings in major non-commodity companies.

‘Unsteady’

“We don’t know what reforms they are going to implement, what the new cabinet is going to look like,” Nash said. “Until we have an understanding what the new government is going to do, the market will remain unsteady.”

The Micex will be open for trading on May 7 and 8 and closed on April 30, May 1 and 9 due to public holidays.

Russian shares have fallen 2.9 percent so far this month and trade at 5.4 times estimated earnings. That compares with a 2.1 percent loss for the MSCI Emerging-Market Index (MXEF) which trades at 10 times projected earnings.

The Market Vectors Russia ETF (RSX), a U.S.-traded fund that holds Russian shares, gained 0.5 percent to $29.89 in New York yesterday, the highest level since April 20. Futures expiring in June on the RTS Index added 0.2 percent to 155,225.

Mechel, Aeroflot, OGK-3

Mechel fell to 260.8 rubles. Trading volumes totalled 97,787, or 22 percent of the average three-month trading activity for the shares. EON Russia declined to 2.655.

Aeroflot rallied 4.2 percent to 48.81 rubles, the biggest daily gain since Dec. 30. The company boosted passenger numbers by 29 percent to 3.6 million from January to March, compared with a year earlier, Russia’s aviation authority reported yesterday on its website. The stock’s trading volume totalled 3.85 million, equivalent to 169 percent of the three-month average.

OAO OGK-3, the Russian electricity utility majority-owned by OAO Inter RAO UES, fell 1.3 percent to 1.057 rubles, the lowest closing level since Feb. 14.

Thousands of people met the head of the Russian Orthodox Church in the center of Bulgaria’s second largest city of Plovdiv, chanting “Russia” and accompanying clerics in their procession with church banners.

Patriarch Kirill of Moscow and All Russia, who arrived in Bulgaria on a visit on Friday, earlier on Saturday met with President Rosen Plevneliev and Prime Minister Boyko Borisov.

Prior to arriving in the center of the southern Bulgarian city, the Russian patriarch visited monuments to honor the memory of Russian warriors who fell in the battle for the liberation of Bulgaria in the Russo-Turkish War of 1877-1878 and World War II.

The procession ended near the St. Marina Cathedral, where Patriarch Kirill was met by 97-year-old Patriarch Maxim of Bulgaria, who came to the city from Sofia for a joint prayer with the head of the sister church, as well as by Metropolitan Nicholas of Plovdiv and top city administration officials.

The patriarch wished those who gathered that God show mercy to Plovdiv and its residents, and presented an icon of Our Lady of the Sign to the St. Marina Cathedral.

In a speech in front of the war monuments earlier in the day, the Russian patriarch urged people to retain the idea of sacrifice in modern society, which, he said, is being ousted by “consumption psychology.”

“We are at a place where you ask yourself what huge importance sacrifice has in a person’s life. If people did not sacrifice, there would have been no great achievements or victories,” the Russian Church leader said.

“We bow our heads in memory of the heroes who sacrificed themselves for the sake of other people,” Patriarch Kirill told hundreds of locals and journalists near the Plovdiv war monuments.

Russia and China on Saturday firmed up plans to raise capital for a joint $4 billion investment fund as a top Chinese official, who is set to be the next premier, visited for talks.

Progress on a joint investment fund was announced at an economic forum attended by Chinese Vice Prime Minister Li Keqiang and Igor Shuvalov, the influential first deputy of Russian Prime Minister Vladimir Putin, who will return to the Kremlin for a third term as president on May 7.

“The creation of the Russian-Chinese investment fund by the Russian Direct Investment Fund and China Investment Corporation will become an example of effective cooperation in the economic sphere between Russia and China,” said Kirill Dmitriyev, general director of Russia’s investment fund.

The Russian fund and the Chinese sovereign wealth fund will each contribute $1 billion (755 million euros) to the joint venture, while the rest is expected to come from Chinese investors, Dmitriyev said in a statement, adding the fund would become operational by the end of June.

Machine-building, agriculture, transportation, and timber processing are among the sectors to be targeted for investment, with 70 percent of the resources directed to Russia and 30 percent to China. Plans to establish the fund were first announced late last year.

Li, who is tagged to take over as premier from Wen Jiabao, on Friday held separate talks with outgoing President Dmitry Medvedev and Putin.

Russia’s economy is heavily dependent on oil and gas, and analysts say that Medvedev’s heavily-publicised modernisation drive during his four years in office has had limited success.

During the economic forum Russian and Chinese companies signed a total of 27 commercial agreements and contracts, the Russian economic ministry said.

China’s official Xinhua news agency, quoting Li, said the deals were worth $15 billion. Representatives from the Russian economic ministry could not immediate confirm the figure or provide their own estimates.

Ten-man Zenit St Petersburg beat Dynamo Moscow 2-1 on Saturday to secure their second consecutive Russian Premier League title with three games to spare.

Luciano Spalletti’s team, backed by Russian energy giant Gazprom, only needed a draw in the top-of-the-table clash to clinch a third domestic title since 2007 and fourth in total.

Zenit midfielder Roman Shirokov fired the home side in front on the half-hour and fellow Russia international Alexander Kerzhakov doubled the lead from the spot six minutes later.

Moldova defender Alexandru Epureanu pulled one back for the visitors just before the break but Zenit held on for a deserved win to stretch their lead over Dynamo to 15 points.

Zenit had to play with 10 men for most of the second half after their Russia midfielder Konstantin Zyryanov was sent off after picking up a second booking.

In Moscow, Serbia winger Zoran Tosic scored twice to lead CSKA to a 2-1 win over city rivals Spartak as the army side leapfrogged their opponents into third place.

CSKA, who recorded their first victory in six matches since they beat Spartak by the same score last month, are now level with Dynamo on 69 points. Spartak are fourth a point behind.

Cameroon striker Samuel Eto’o scored twice and set up another goal as wealthy Anzhi Makhachkala, coached by former Russia boss Guus Hiddink, beat Lokomotiv Moscow 3-1 to move into fifth spot with 66 points.

Lokomotiv and Russia striker Roman Pavlyuchenko was forced to leave the game midway through the second half after suffering a leg injury.

“Roman will probably miss the rest of the season,” Lokomotiv coach Jose Couceiro told reporters. “As for his Euro 2012 chances, that is up to Russia coaches to decide.”

The verbal message was conveyed to Salehi in a meeting at the venue of the Iranian foreign ministry on Saturday morning.

During the meeting, the two diplomats also discussed bilateral issues as well as regional and international developments.

The message came after Lavrov reiterated Moscow’s opposition to any further UN sanctions and actions by other nations and groups, including the EU oil ban which comes into force in July, and warned the European Union that its ban on purchasing Iranian oil would end up hurting the bloc’s member states.

“The European Union is rejecting purchases of Iranian oil, even though very many EU countries depend on this oil,” Foreign Minister Sergei Lavrov said in an interview on state-run Rossiya 24 television.

“One can say, of course, that the deficit will be covered, but (some) refineries are geared specifically to Iranian oil … and readjusting them will demand substantial investments that the EU can hardly afford now,” he said.

“The unilateral sanctions to which our Western partners resort, bypassing the Security Council, only strengthen … those in Iran who are sure the West is not interested in resolving issues linked with non-proliferation of nuclear technologies, but is interested in regime change,” Lavrov said.

Speaking ahead of a second round of talks next month between Iran and the six world powers – Russia, China, the United States, Britain, France and Germany – he suggested the focus should be on coaxing Tehran into cooperation with the prospect of relief from sanctions.

Russia has been calling for a “step-by-step” resolution to the dispute.

Iran should be presented with “a concrete and realistic road map, a kind of program that would be based on the principle of an action for an action,” Lavrov said.

He repeated Russia’s proposal that as a start, Iran could freeze the number of centrifuges for uranium enrichment at current levels, while global powers would refrain from imposing new sanctions and freeze a number of boycotts and embargos already imposed against Tehran.

Russia says the centrifuge proposal was discussed at an initial round of negotiations in Istanbul. Iranian and Western officials have said little about the proposal.

After over a year of stalled talks, Tehran and the six world powers resumed negotiations in Istanbul earlier this month and are due to attend a second round of talks in Baghdad on May 23.

Both sides said the Istanbul talks were positive.

Vladimir Putin and Dmitry Medvedev have put on a Soviet-style show of unity that would make their Communist predecessors proud, personally harvesting corn in southern Russia.

Walt Disney Co. said it reached a deal to start a Disney Channel in Russia, after more than three years of effort.

The new channel is to be a joint venture between Disney and UTH Russia, a media holding company. UTH’s Seven TV is to become Disney Channel. Disney will own 49% of the channel with UTH holding the other 51%.

Russia’s Interfax news agency said Disney was spending $300 million for its stake. Disney declined to discuss financial terms.

Russian regulators blocked a similar attempt in 2008, but gave their final blessing to the new deal after Disney Chief Executive Robert Iger met with Russian Prime Minister Vladimir Putin.

UTH Russia is headed by CEO Ivan Tavrin. Mr. Tavrin was also CEO of Disney‘s partner in the planned 2008 venture, Media-One. Disney was to have invested an estimated $230 million for 49% of that venture.

“The [2008] deal didn’t go through then for a variety of reasons,” Mr. Iger said in a telephone interview. “I’m not sure anyone knows exactly why.”

Mr. Iger added that the venture announced Thursday entailed “a significantly different kind of deal than the last one, in a variety of ways.” He didn’t elaborate.

The new channel will be broadcast over the air in 54 urban markets, starting early in 2012. An exact date wasn’t announced. The Russian channel is to be the 101st Disney Channel. The Russian channel is to be free to viewers and carry ads, unlike the U.S. basic-cable version of the channel.

Describing his meeting Thursday with Mr. Putin, Mr. Iger said: “He endorsed the parners that we’re working with and the strategy.”

Interfax reported that Mr. Putin told Mr. Iger: “I hope that your participation in the joint work will be useful from the business point of view and will be a positive start on the media market.”

“We expect that the United States and its NATO allies will, after all, make steps to meet Russia halfway, because Russia has demonstrated its absolute creativity in search of a compromise,” Rogozin said after a meeting with NATO Secretary General Anders Fogh Rasmussen on Wednesday.

“However, we are still at a dead end because the United States stubbornly refuses to provide Russia with serious legally-binding guarantees [that the European missile shield will not be aimed against Russia],” Rogozin said.

The diplomat added that Russian Deputy Defense Minister Anatoly Antonov, Russia’s point man for arms control negotiations, will outline the Russian position on the issue to envoys from NATO member-countries at a Russia-NATO Council’s meeting on November 15.

Russia and NATO agreed to cooperate on the so-called European missile defense system at the Lisbon Summit in November 2010. NATO insists there should be two independent systems that exchange information, while Russia favors a joint system with full-scale interoperability.

NATO has said it was ready to offer Moscow written assurances that the European missile shield being built is not directed against Russia but has refused so far to provide the legally binding commitments demanded by Moscow.

* Calls for output increases of 19% nickel, copper 49%

* Says platinum-group to grow by 42 pct

* Aims to stay lowest-cost producer of nickel

MOSCOW, Oct 27 (Reuters) – The board of Russian miner Norilsk Nickel has approved a strategy that envisages investing $35 billion in 2011-2025 to expand its resource base and raise output, Norilsk said on Thursday.

“It is expected that by improving efficiency of production operations at the current deposit and initiating new projects in Russia, nickel production will grow by at least 19 percent, copper production by 49 percent and platinum-group metals production by 42 percent by 2025,” a Norilsk statement said.

Norilsk, the world’s biggest nickel and palladium producer, plans to raise nickel output this year to 300,000-315,000 tonnes from 297,329 tonnes in 2010 and keep copper output at 380,000-390,000 tonnes versus 388,872 tonnes.

It expects its palladium output to be 2.85-2.87 million ounces, compared with 2.861 million in 2010, and its platinum output at 705,000-720,000 ounces, up from 693,000 ounces last year.

Norilsk aims to maintain its position as the nickel producer with the lowest cost of production, it said.

It will expand its resource base considerably through further geological exploration in the regions where it operates and through participation in new projects, including starting production of coal and iron ore, molybdenum, chrome and other metals, Norilsk said.

It said it expected the strategy to lead to significant growth in revenue and profits.

“In accordance with the approved document, by this time (2025) Norilsk Nickel should be among the top five mining and metallurgy companies in the world in terms of market capitalization,” the statement said.

UC RUSAL , the world’s top aluminium producer and owner of a quarter of Norilsk, said on Thursday its representatives on the board did not participate in the meeting as they were not provided with the documents it examined.

“Our representatives were not present at the meeting, but they voted against the strategy in written form,” a RUSAL spokeswoman said.

RUSAL has two representatives on the 13-strong Norilsk board.

Norilsk has a long-standing dispute over its management between rival oligarchs Vladimir Potanin, whose Interros investment company holds about 30 percent of Norilsk, and Oleg Deripaska, who controls RUSAL. (Reporting By Aleksandras Budrys; Editing by Lidia Kelly and Jane Baird)