LUKOIL TO EXPORT OIL BYPASSING RUSSIA

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LUKOIL TO EXPORT OIL BYPASSING RUSSIA

Izvestia, June 6, 2002, p. 5

While the Russian government hasn’t launched market deregulation or given oil companies access to Gazprom’s export pipeline, LUKoil has found an alternative route for profitable gas exports. Thus, participants in the gas extraction project at Shakh-Deniz, Azerbaijan, with natural gas reserves of 1 trillion cubic meters, would also like to see an opportunity to extend gas exports from Turkey to southern Europe. LUKoil, which last week announced its plans to break into this market with its projects from the Russian sector of the Caspian Sea, has been the most active in lobbying for this idea.

RETURN TO PUTINBURG

Moskovsky Komsomolets, June 6, 2002, p. 2

President Vladimir Putin plans to spend almost all of the upcoming week in his home city, St. Petersburg. Two summits will be held there – a Shanghai Cooperation Organization summit and a Baltic group forum – as well as three meetings: with President Heydar Aliyev of Azerbaijan, President Alexander Lukashenko of Belarus, and President Leonid Kuchma of Ukraine. All of this will happen in sequence, with a short break for celebrations of Russia’s Independence Day.

There are several theories which could explain this continuous marathon of the most significant events of the political season taking place in St. Petersburg. The Kremlin administration tends to attribute Putin’s week-long stay in St. Petersburg to… saving money. A senior presidential administration official said: “Do admit, it would be strange to hold a Baltic summit in Moscow. As for the Shanghai summit, it had been agreed to hold it in St. Petersburg long ago. In order to avoid rushing about, it was decided to adjust all other meetings to the one planned first. You wouldn’t be surprised if Putin held several meetings in Sochi.”

According to the other theory, Putin is doing this as a kind of test for the authorities of St. Petersburg, a year before the city celebrates the 300th anniversary of its founding. Around 30 heads of state are likely to attend those celebrations, according to our sources. Next year, heads of the G8 member states might also pay a visit to St. Petersburg. It is said that this issue is as good as settled; the G8 leaders will probably announce their consent to hold a G8 summit in St. Petersburg a couple of weeks from now, when they meet in Canada.

In order to greet this armada of heads of state, and make appropriate arrangements for their delegations and security, the police of St. Petersburg must start preparations now – both morally and materially. What could be better practice for this than a visit by President Putin and several other presidents?

There’s another theory: that Putin has supposedly not given up hope of recovering the status of Russia’s capital for his home city, and is allowing the world community to become accustomed to perceiving St. Petersburg as a worthy venue for international meetings.

VNESHTORGBANK’S PRESIDENT YURY PONOMAREV MIGHT LOSE HIS POST

Izvestia, June 6, 2002, p. 2

The president of Vneshtorgbank may be replaced early next week. The question of dismissing current President Yury Ponomarev will be decided at the meeting of the bank’s supervisory council, scheduled for June 10. Current head of Vneshekonombank Andrei Kostin might replace Ponomarev in this position. However, Central Bank Chairman Sergei Ignatyev hasn’t made this decision at his own initiative – the government, which by the end of the year will hold 99.9% of Vneshtorgbank’s shares, stands behind him.

On June 5, the Interfax news agency reported (citing a Central Bank source) that Ignatyev had scheduled the meeting of Vneshtorgbank’s supervisory council, at which it is planned to discuss the possible replacement of the Vneshtorgbank CEO by Andrei Kostin, for early next week. Moreover, Interfax reported that this decision had been made on the basis of a memorandum from Prime Minister Mikhail Kasianov, which had been coordinated with President Putin.

The prevailing opinion at Vneshekonombank is that their chief executive’s transfer to Vneshtorgbank is as good as settled. Earlier today, a senior Vneshekonombank executive deflected our questions with the caution of an experienced diplomat, but indirectly admitted that the bank staff don’t see anyone capable of preventing Kostin’s transfer to Ponomarev’s current position. Later in the day, Vneshekonombank’s press secretary Tatiana Golodets confirmed to us that Kostin had received an official invitation to head Vneshtorgbank.

NTV ON THE BRINK OF ANOTHER SWEEP

Argumenty i Fakty, No. 23, June, 2002, p. 2

On Saturday, the TVC channel – the joint creation of Yevgeny Kiselev’s team of journalists, a number of oligarchs, and Media-Socium, controlled by Yevgeny Primakov and Arkadii Volsky – started broadcasting. The expectation that following the Media Ministry’s approval of this project, the stars of the defunct TV-6 channel would restrain their oppositional ardor, proved to be correct. However, the matter couldn’t pass without a fly in the ointment. The very first day’s programs included Kiselev’s documentary about the assassination of President John F. Kennedy in 1963 – with a colorful description of the young and popular president’s death being due to the intrigues of oil barons dissatisfied with his policies. All of this evoked far-reaching associations.

In the meantime, another network – NTV – has suddenly run into trouble.

Kremlin analysts haven’t concealed their indignation about the recent collapse of viewer interest in state-controlled TV channels. It is rumored that these embarrassing ratings have been released deliberately, supposedly at the orders of forces hostile to the Kremlin. Looking at the broadcasts, however, it is easy to notice the difference in the style of news coverage, which doesn’t favor state-controlled television. Unlike NTV, it has been showing almost no footage of protest campaigns, hunger-strikes by health workers and teachers, the real situation in Chechnya, and so on; instead, too much of its news coverage is based solely on official government sources.

It is rumored that ORT and RTR executives are growing envious of NTV. Simultaneously, the problem of inter-channel competition has become so acute that it has been discussed at a special meeting at the Presidential Administration.

Reportedly, ORT and RTR have been told that Putin’s image is being presented as “too shiny” by state-controlled television, and viewers are turned off by this. ORT and RTR were especially criticized for a 90-minute documentary about the president’s meetings with scientists at Lake Baikal. According to some sources, other proposals were also made at the meeting: for instance, to arrange an additional “structural sweep” of NTV, probably to TV-6, with the purpose of strengthening state influence at this channel.

THE COMMUNIST PARTY

Argumenty i Fakty, No. 23, June, 2002, p. 2

Of course, the troubles that have befallen the Communist Party (CPRF) over the last six months haven’t come from nowhere. According to some analysts working for the government, only Communist leader Gennady Zyuganov – or someone else from the CPRF – is capable of providing some real competition in both the parliamentary and presidential elections.

The Kremlin is fairly certain of Putin’s victory, if he agrees to run for a second term. The problem is different – securing a win in the first round of voting. One way to achieve this is to weaken the CPRF. Or, possibly, to split it and take away its voter support. Some voters would go with Seleznev, under the banners of “liberal communists”; some would go with Raikov, who has agreed to play the role of a nationalist radical. This is precisely why Raikov has recently made some statements against homosexuality.

But has the split attempt been a success? If anything has indeed happened, the changes are not drastic. It looks like Zyuganov managed to save face before ordinary CPRF members in the crisis. By expelling Seleznev, Goriacheva, and Gubenko from its ranks, the CPRF got rid of the new nomenclature, successfully embedded in power. Of course, the three “renegades” weakened the leadership of the CPRF Duma faction, but the numbers of “red” voters is unlikely to have grown less because of this. The party’s propaganda began to speak about a purification of the ranks. This may be followed by a radicalization of the communists.

However, the fate of Zyuganov is far from cloudless. The person who really calls the tune – the cashier and initiator of the CPRF, Mr Kuptsov – is currently paying close attention to reactions from financial sponsors. If the CPRF leader quarrels with business, or corporate sponsors cease to view him as a suitable leader, he will be replaced.

THE RIGHT WING

Argumenty i Fakty, No. 23, June, 2002, p. 2

As it should be, two years before the next presidential election the campaign teams of leading political forces are starting to plan their strategy and tactics in preparation for this most important event. For example, the Union of Right Forces (URF) is making new attempts to persuade all right-wing parties to agree to field the same presidential candidate. The URF Council will meet on July 21-22, and propose a method of selecting such a candidate. The technique is quite simple. The single presidential candidate from the democratic forces is to be named by the party that gets the most votes at the next parliamentary elections.

The list of parties capable of gaining the 5% of the vote required to enter the Duma is not long: Yabloko, the URF, the Democratic Party of Russia (Mikhail Prusak), the Russian Union Social-Democratic Party (Mikhail Gorbachev), and maybe Liberal Russia.

It is already known that Yabloko leader Grigory Yavlinsky is totally opposed. He cites the fact that in 1995, after he and Yegor Gaidar shook hands on television and promised to unite, he was deceived. Gaidar maintains the opposite: that Yavlinsky said the next morning that he had been joking. Thus, the two of them are now not on speaking terms.

Boris Berezovsky, who is directly involved in Liberal Russia, is also against the agreement. Reportedly, he intends to invest up to $150 million in the Liberal Russia party, hoping to gain a substantial faction in the Duma. Time will tell.

And lastly – it is already known how big business has responded to the proposal of the URF: positively. And big business funds practically all political parties.

RUMORS

Argumenty i Fakty, No. 23, June, 2002, p. 2

According to a number of independent analysts, right after his series of visits abroad – by late June – President Putin could make a number of personnel changes. Gazprom chief Alexei Miller may be the first to change his status and receive a promotion. He might head a new ministry, to be based on three present ones. The field: natural resources.

The Slavneft Oil and Gas Company could also get a new chief executive. The two present candidates – Baranovsky and Sukhanov – have become involved in a major dispute within the company, and both are most likely to quit.

A more “heavy-weight” appointment may be the shift of Security Council Secretary Vladimir Rushailo. However, this is unlikely to happen while the Security Council is celebrating its tenth anniversary. An indirect confirmation of this rumor was the circulation of 32 pages of unflattering background material about the SC Secretary within the Federation Council. Federal Border Guard Service commander Konstantin Totsky is being spoken of as the successor to Rushailo.

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