MOSCOW, September 19 (RIA Novosti) Should Russia incorporate Transdnestr?/Government wants additional profit from PSA projects/Kremlin helps Gazprom honor its export commitments/Foreign investors set to enter Russian aircraft industry/Leading foreign NGOs may fail to re-register in Russia
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Should Russia incorporate Transdnestr?
Transdnestr held a referendum Sunday, during which an overwhelming majority voted to join Russia. Politicians and political analysts are now wondering whether Russia should incorporate the breakaway republic.
Vadim Gustov, chairman of the Russian parliamentary committee on the Commonwealth of Independent States, said: "The referendum will have no legal consequences. The leaders of Transdnestr hope to repeat the Yugoslav scenario, but that is impossible because the OSCE, the Council of Europe and the European Union refuse to recognize its independence.
"Europe and the Untied States are avoiding a repetition of the Yugoslav scenario and are trying instead to fan tensions in the region to drive Russia out. The main thing now is to avoid bloodshed. I would rather the situation remained as it is, since Russian peacekeepers are stationed there."
Valery Ryazansky, a deputy of the lower house (United Russia), said: "The outcome of the referendum was expected. But the problem cannot be solved in a civilized way now."
Sergei Baburin, a deputy of the lower house (Rodina), said: "When the Soviet Union collapsed 15 years ago, South Ossetia, Abkhazia and Transdnestr did not secede from it. Therefore, they should be incorporated into Russia at the request of their people."
Georgy Satarov, president of the INDEM Foundation, said: "The incorporation of Transdnestr into Russia would be a highly dangerous decision, because the mechanism might be used now or later for the secession of many Russian territories."
Vladimir Zharikhin, deputy director of the Institute of the CIS, said: "It is the expression of the people's will, which should be respected, just as the will of the Montenegrins was respected. Russia should ask if the world community has firm laws. If it does, then the precedent of Montenegro should be taken into account. If new rules are established every time [a similar problem arises], it will mean that there is only one law in the world, the law of the strongest."
Sergei Markov, director of the Institute of Political Technologies, said: "If the international community recognizes the independence of Kosovo, Russia will use the results of the referendum to recognize [Transdnestr's] independence from Moldova."
Government wants additional profit from PSA projects
The Russian Natural Resources Ministry has threatened to revoke the mining licenses of companies working under product-sharing agreements. It claims that not a single technical requirement has been complied with in these projects. Experts, however, think authorities are trying to generate additional profit.
By law, product-sharing agreements can be cancelled in two cases: if a project operator refuses to carry out its functions, or with the parties' mutual consent. However, violations of field development or of environmental requirements are subject to the Russian law "On subsurface resources," said Sergei Fedorov, of the Natural Resources Ministry.
"All technical projects in Russia's three PSAs have been violated," he said. A ministry official said a final decision to revoke the licenses has not been made yet, but that Fedorov's statement was not merely his personal opinion.
Last week, the ministry officially requested information on the technical and economic performance of the PSA projects from their operators Total, Exxon Neftegas Ltd. and Sakhalin Energy.
The ministry's harsh move was prompted by its discontent with the profit received by the projects, experts told the paper. "These fields now cost much more than in the 1990s, when the agreements were signed," said Dmitry Mangilev of the Prospekt brokerage. "Perhaps the state decided to review the agreement in its favor."
"This can be a way for the ministry to try to come to terms with the oil companies," said Konstantin Cherepanov of Ray, Man & Gor Securities.
Still, the government and the companies will have to compromise, because the revocation of licenses will hurt everyone, analysts said.
"Russia will get embroiled in a great scandal," Mangilev said. "Of course, state-owned companies can develop the current PSA projects on their own, but they will need serious investment and new supply contracts. State companies will simply not be interested in developing fields on such terms."
Kremlin helps Gazprom honor its export commitments
The Russian presidential administration is developing a new strategy to supply the Russian energy sector with fuel. The strategy will prioritize coal, not gas, where shortages have already reached some 30%, experts say.
Russian authorities are ready to switch domestic consumers to coal and fuel oil, which will raise electricity tariffs, in a move to help Gazprom fulfill its export plans.
The Russian energy giant allocated 100.5 billion cubic meters of gas to energy producers in 2006, which is 11 billion less than in 2005. Between January and August, Russia's electricity monopoly RAO UES has already used 90 billion cubic meters.
A source close to the energy holding told the paper that as of now, up to 140 billion cubic meters of gas will be required annually, or 160 billion, ideally.
Another source close to the presidential administration said there will not be any substantial increase in gas limits either next year or in the mid-term. Instead, Russian energy producers are invited to use coal.
In particular, prospects for the construction of coal facilities in some regions in the next five years were discussed at a meeting held by presidential Chief of Staff Sergei Sobyanin yesterday.
Currently, there are some 20 gas- and coal-fuelled power stations in Russia. According to the Institute of Natural Monopolies, transferring power plants from gas and coal to pure coal will save up to 27 billion cubic meters of gas a year.
Market players are unanimous that the new fuel strategy will benefit Gazprom's export policy, not the interests of domestic consumers. Analyst Valery Nesterov from the Troika Dialog brokerage said that, given the current situation on the domestic and world markets, Gazprom is not interested in domestic gas supplies.
The growth of gas exports has brought a great deal of profit to Gazprom, which is implementing large investment projects, and has also been used as a political argument by the Russian leadership.
Nesterov stressed that Dmitry Medvedev, first deputy prime minister and chairman of the gas monopoly's board of directors, is responsible for keeping Gazprom on European markets and establishing its presence in China and the United States in order to give Russia another way of influencing the policies of those regions.
Foreign investors set to enter Russian aircraft industry
The Russian Industry and Energy Ministry said foreign investors should be allowed to own more than 25% of the shares of national aircraft industry companies, and more than 49% of the capital of national airlines.
A law due to be examined by the government this October will regulate the purchase of aircraft industry and airline assets, officials said. It will authorize foreign investors to acquire stakes in strategic Russian enterprises.
The proposed regulations will allow foreign investors to help implement several projects, including production of the Sukhoi Superjet (SSJ) aircraft, its SaM 146 engine, and military aircraft under Russian-Indian projects.
Analysts and market players praised the developments. Boris Rybak, head of the Infomost aviation consulting firm, said the previous law hindered the establishment of joint ventures. The French company Eurocopter and the Moscow-based Mil helicopter plant decided not to develop the Mi-38 multirole helicopter because the French side only had a 30% stake in the venture. "This is insufficient for a foreign investor," Rybak told the paper.
Foreign investors will now be able to appoint their own representatives to the boards of directors of Russian companies and to influence their performance.
Rybak said the acquisition of controlling stakes by foreigners was not dangerous. "One can obtain control even under current legislation," he said.
Market players said some foreign airlines, including Germany's Lufthansa, wanted to operate flights on the Russian market. The absence of restrictions will authorize foreigners to buy national airlines or to set up airline subsidiaries.
Oleg Sudakov, an analyst with Rye, Man & Gor Securities, said few Russian air carriers would survive if the domestic market were opened to foreign airlines. "That spells trouble for our airlines," he told the paper.
Leading foreign NGOs may fail to re-register in Russia
The deadline for foreign non-governmental organizations to re-register in Russia expires in one month. But only 26 out of several hundred NGOs operating in Russia have been able to re-register. Foreigners blame official red tape.
None of the leading international human rights organizations is among the lucky 26. Sergei Nikitin, director of International Amnesty's Russian office, told the paper that the delay was caused by the amount of documentation that had to be prepared.
"We have not submitted any documents, because they need to be filled in at our head office, which will take quite a while," he said. "There is only one month left, but the registration authorities have only 3 hours a week, so this is technically impossible."
Representatives of another organization, Human Rights Watch, said the reasons for their delay were similar.
"We are only preparing documents and gathering all the necessary signatures," said the deputy director of its Moscow office, Alexander Petrov. "We need to provide the documents we used to register our organization in America. They need to be translated, and all this takes time, so I just do not know what we are going to do."
Some foreign organizations have long ceased being "foreign," apparently to avoid the bureaucracy. "We are a Russian organization, so we do not have to re-register," said a spokesman for Greenpeace Russia.
"We have nothing to do with foreigners," said the World Wildlife Fund.
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