Putin backs state grab for Yukos

Putin backs state grab for Yukos

President Putin says he is correcting a period of 'cowboy capitalism'

Russia's president has defended the purchase of Yukos' key production unit by state-owned oil firm Rosneft, saying it followed free market principles. Vladimir Putin said it was quite within the rights of a state-owned company to ensure its interests were met.
Rosneft bought 100% of Baikal Finance Group, in a move that amounts to the renationalisation of a major chunk of Russia's booming oil industry.
Rosneft will now control about 16% of Russia's total crude oil output.
Yukos share jumped in Moscow, climbing as much as 50% before being suspended.
The US, meanwhile, has said a lack of transparency in the sale of Yukos' Yuganskneftegas subsidiary could affect Russia's standing in the world economy.
"We think this sends the wrong signals to foreign investors and could negatively impact Russia's role in the global economy," deputy State Department spokesman Adam Ereli said.
Coming together
Rosneft is already in the process of merging with Gazprom, the world's biggest gas company, a move that will see Gazprom return to majority state-ownership.

Now the state, using market methods, is safeguarding its interests. I think this is quite normal President Vladimir Putin Excerpts from news conference

Baikal was the surprise buyer of oil and gas giant Yukos' main production division at a forced auction on Sunday.
"Everything was done by market methods," Mr Putin said at his year-end press conference in Moscow.
Shedding some light on the Kremlin's motivation, Mr Putin referred to a period of so-called "cowboy capitalism" that followed the collapse of the Soviet Union.

Yukos's main oil producing unit has changed hands twice in five days

He said privatisations carried out in the early 1990s had involved trickery, including law breaking, by people seeking to acquire valuable state property.
"Now the state, using market methods, is safeguarding its interests. I think this is quite normal," the Russian president said.
A Rosneft spokesman has said the acquisition is part of its plan to build a "balanced, national energy corporation."
Complex web
The latest announcement comes after more than a year of wrangling that has pushed Yukos, one of Russia's biggest companies to the brink of collapse.
The Russian government put Yuganskneftegas up for sale last week after hitting the company with a $27bn (£14bn) bill for back taxes and fines.

You cannot sue the Russian government Eric Kraus, Sovlink Securities

Analysts say that Yukos's legal attempts to block the auction by filing for bankruptcy protection in the US are probably what caused this week's cloak-and-dagger dealings.
Gazprom, the company originally tipped to buy Yuganskneftegas, was banned from taking part in the auction by a US court injunction.
By selling the Yukos unit to little-known Baikal and then to Rosneft, Russia is able to circumvent a host of tricky legal landmines, analysts said.
"You cannot sue the Russian government," said Eric Kraus, a strategist at Moscow's Sovlink Securities. "The Russian government has sovereign immunity."
"The government is renationalising Yuganskneftegas."
Far from over
Even so, analysts reckon that the saga still has a long way to go.
The Rosneft announcement came just hours after Yukos accused Gazprom of illegally taking part in Sunday's auction. It has said it will be seeking damages of $20bn.
The claim was made at the latest hearing in the US bankruptcy court in Houston, Texas, where Yukos, had filed for Chapter 11 bankruptcy protection.
If found in contempt of the US court order blocking the auction, Gazprom could face having foreign assets seized.

Yukos' lawyers had also been expected to try to have Baikal's assets frozen.
Lawyers claimed the auction was illegal because Yukos - with an office in Houston - had filed for bankruptcy and therefore its assets were under the protection of US law which has worldwide jurisdiction.
Further muddying the waters is a merger between Rosneft and Gazprom which authorities have said will go ahead as planned.

Who is really behind RosGas?

Author: Kostis Geropoulos
11 May 2009 - Issue : 833

Read more: http://www.neurope.eu/articles/94168.php#ixzz0b0C3uJ4h

Under Creative Commons License: Attribution Non-Commercial
Hungary’s largest gas distribution company, EMFESZ, has been “fraudulently” sold to the mysterious Swiss-based firm RosGas AG without the consent of its owner, Ukrainian gas billionaire Dmitry Firtash, Robert Shetler-Jones, chief executive of Group DF that holds Firtash’s business assets, told New Europe telephonically on May 8, adding that DF would fight to get EMFESZ back. “We at Group DF and Mr. Firtash have sold nothing. What has happened is that our Managing Director, Mr (Istvan) Goczi has fraudulently transferred the shares in EMFESZ to RosGas without our approval and without our consent,” Shetler-Jones claimed. He said that the sale raises new concerns about Europe’s gas security since the future EMFESZ, Hungary’s largest independent supplier of gas, remains uncertain. “We do not know who is behind RosGas and therefore we don’t know who is looking to supply EMFESZ with gas,” Shetler-Jones said, adding that he doesn’t understand how RosGas can secure supplies of gas to provide to EMFESZ. Little is known about RosGas, the Swiss company which was recently created in Zug. Shetler-Jones claimed that RosGas has a few directors, one of whom is an officer who is directly responsible to Goczi, the managing director of EMFESZ. “We do not know who owns RosGas, we do not know on what basis they have persuaded Mr. Goczi to carry out this fraudulent operation,” he said.

Read more: http://www.neurope.eu/articles/94168.php#ixzz0b0C7PKvj
Under Creative Commons License: Attribution Non-Commercial
Shetler-Jones stressed that there has not been a decision of the board of directors to sell EMFESZ to RosGas. “Mr Goczi, what he seems to be saying is that he is using a power of attorney for this so-called ‘sale.’ The power of attorney he is supposedly using is one dating from 2004 that was issued to him to initially buy the shares in EMFESZ on behalf of Mr. Firtash. He somehow managed to persuade the Hungarian authorities that this power of attorney gives him the authority also to sell the shares onto a third party,” Shetler-Jones claimed. “However, this does not, in our view, give him the right; it is certainly not done with our approval and therefore we will be pursuing all legal means in our path to get this asset back to our control,” he told New Europe, adding that Group DF will “most certainly” seek criminal charges against Goczi and his associates.
The dispute over the ownership of EMFESZ comes weeks after Firtash was muscled out of the Ukrainian gas trade under the terms of a new Russian-Ukrainian contract agreed by his nemesis Ukrainian Prime Minister Yulia Tymoshenko and Russian counterpart Vladimir Putin after the January gas supply crisis. Under the new contract, Russian gas monopoly Gazprom will supply Ukraine directly, cutting out the middleman – RosUkrEnergo. Firtash owns 45 percent of Swiss-registered RosUkrEnergo, where he is a partner with Gazprom, which holds another 50 percent of the trader. EMFESZ announced two weeks it was switching its gas purchases from Rosukrenergo to RosGas. Asked about the switch, Shetler-Jones said, “As far as I’m aware RosGas is not supplying gas to EMFESZ. One of the issues that concerned us was the very statement that EMFESZ made about securing supplies of gas from RosGas ... Group DF was not aware of those negotiations and, of course, we do not know what Rosgas is, so I’m assuming that is all part of the process that we now seeing unwinding, the transfer of shares, the sourcing of different supplies of gas and who is behind it is fundamental to understanding what has happened.” In a statement, EMFESZ said that RosGas is part of Gazprom’s network of business interests. This claim was dismissed by Gazprom Press Secretary Sergei Kupriyanov. “RosGas has nothing to do with Gazprom and does not belong to the Gazprom group,” Kupriyanov said. Shetler-Jones told New Europe that there is no evidence that there is any connection between RosGas and Gazprom. “If it is Gazprom and again we have no proof if it is Gazprom, of course this would be extremely important commercially but also politically, but I do reiterate that we have no evidence to that effect at the moment.”

Read more: http://www.neurope.eu/articles/94168.php#ixzz0b0CAm6Pe
Under Creative Commons License: Attribution Non-Commercial

Russia revives gold mining in the Gulags | Reuters

Russia revives gold mining in the Gulags | Reuters

Robin Paxton

KUPOL MINE, Russia

Tue Aug 11, 2009 8:17pm EDT

KUPOL MINE, Russia (Reuters) - Every winter, an ice road is laid across 400 km (250 miles) of tundra to carry supplies to one of the world's most isolated gold mines.

Russia | Indonesia

There is no other way for heavy machinery to reach Kupol, the $700 million Arctic mine behind a resurgence in Russian gold production after five straight years of decline.

"It's one of the harshest climates I've worked in, and I've worked in the Atacama desert in Chile and at 15,000 feet in Indonesia," said Patrick Dougherty, general manager at Kupol.

"But I don't get to pick where the gold is."

Only South Africa holds more gold than Russia, but Moscow's fragmented industry has struggled to access vast reserves in its inhospitable Far East. The region was first mined in the 1930s by prisoners of the Gulags set up by Soviet leader Josef Stalin.

Russia is the world's biggest energy supplier, but falling prices and reduced demand have cut income from natural resources to about 8 percent of its gross domestic product in the first quarter of 2009, from nearly 11 percent a year ago.

Gold, on the other hand, has been helped by recession.

Its safe-haven appeal has shielded it from a demand slump that shredded other commodity prices, lifting it by 10 percent this year to keep it within striking distance of a record price of $1,030.8 an ounce set in March 2008.

Chukotka, a region revived in the last eight years by the $2.5 billion investment of Chelsea soccer club owner Roman Abramovich, produced a fifth of Russia's gold in the first half of this year. Gold is the region's passport to growth after Abramovich quit as governor last July.

Russia ranked fifth among the world's gold miners last year, between Australia and Peru, with an 8 percent share of output. Production rose 13 percent in 2008, the first increase in six years, and jumped another 25 percent in the first half of 2009.

"This was solely due to the commissioning of Kupol," said Olga Okuneva, mining analyst at Deutsche Bank in Moscow. "If other large projects in the Far East start producing gold, this will be a major growth driver for the Russian gold industry."

Kupol -- meaning dome in Russian -- is named after a rounded outcrop of rock that juts skyward from the tundra in central Chukotka, over 200 km (125 miles) from the nearest settlement.

The mine took five years to build. It is the largest tax payer in Chukotka, a land twice the size of Germany where reindeer outnumber people four to one.

"With a deposit as large as Kupol, mining's contribution to the regional economy is expected almost to double to 37 percent this year," said Roman Kopin, the 35-year-old who took over as governor when Abramovich resigned.

Kinross Gold Corp, the Canadian miner which owns 75 percent of Kupol, is unusual among foreign investors for holding a majority share in a major Russian mineral deposit. The government of Chukotka owns the other 25 percent.

Untangling the red tape that stifles some foreign investors in other parts of Russia was one of the main achievements of Abramovich's more than seven years as governor, Kopin said.

"The investment climate here, perhaps, is a little bit different, because we understand that it's very difficult to work in Chukotka," he added.

Kinross has been the top performing gold stock on the New York Stock Exchange for the last three years, when the company's value rose more than 160 percent. Kupol will supply about a third of its total output this year and 15 of 24 equity analysts polled by Reuters retain a bullish rating on the stock (KGC.N).

ARCTIC CORRIDOR

About 1,400 jobs are related directly to Kupol, and Chukotka's population totals around 50,000. Miners and catering staff spend four weeks on site and four weeks off, earning an average monthly wage of 50,000 roubles, 25 percent above the regional average.

"We have equipment that works here," said Alexander Puzovets, 48, a drill rig operator who works 10-hour shifts at the pit face. "I've been in mines where we've used hammers."

The mine's in-house electricity plant could generate enough to power the regional capital, Anadyr.

In winter, miners walk the purpose-built Arctic Corridor -- an enclosed, 900-meter tunnel from camp to mine -- to avoid temperatures that drop more than 50 degrees Celsius below zero (minus 58 degrees Fahrenheit).

About 60 percent of Kupol's gold is mined underground. Zurab Samteladze, a 55-year-old Georgian more than 7,000 km from home, hauls 45-tonne rock loads to the surface in a Caterpillar truck.

In deeper parts of the mine, skilled operators maneuver drill rigs by remote control. This avoids the need for miners to work long hours beneath areas vulnerable to rock falls.

"With all the video games they play, the younger generation has a better chance of operating these units," said Dougherty, a native of Arizona.

Alcohol is banned. Miners pass their time playing pool, in the gym or watching television. Popcorn is a popular snack, while eight tonnes of reindeer meat was served up last year.

"I play guitar -- they have a music room. I like basketball -- they have a sports hall," said Andrei Aksanov, 34, a mechanic in the truck shop.

Like 80 percent of the miners at Kupol, Aksanov comes from Magadan, the port city 1,500 km (940 miles) to the southwest.

This is where mining began in Russia's Far East. Stalin, needing bodies to unearth new-found gold reserves, sent hundreds of thousands of prisoners to slave in the region's labor camps over two decades from the early 1930s.

From such grisly beginnings, Magadan has developed into the hub of gold processing in the Russian Far East. Kupol flies its dore -- bullion bars to be processed into almost pure metal -- to be refined at the Kolyma Refinery to the north of the city.

Vladislav Feoktistov, the refinery's 71-year-old director, raised a glass of vodka to visiting officials from Kinross Gold. Supplies from Kupol will guarantee the plant's biggest turnover in its 11-year history, he said.

"This a business that's only as good as its suppliers," he said. From here, 15 kg (33 pound) gold bars worth more than $450,000 each at current prices are delivered to Russian banks.

MORE GOLD TO MINE

There should be more to come. Polyus Gold, owned by billionaires Mikhail Prokhorov and Suleiman Kerimov, plans to launch Natalka, the world's third-largest gold deposit, in 2013.

Annual production of between 25 and 30 tonnes will put Natalka on the same scale as Kupol. Beyond 2017, Polyus plans to raise output to more than 40 tonnes a year.

"It's a deposit with reserves of more than 1,000 tonnes that will create jobs, infrastructure and become a major center for Magadan region," said German Pikhoya, Polyus Gold's deputy chief executive for strategy and corporate development.

If Chukotka is to retain its leading position, it must do more. Current reserves at Kupol will last only until 2016. To extend the mine's life beyond this date, more reserves must be found, mapped and registered with Russian authorities. Kinross and others are already exploring.

"Chukotka is definitely a key gold-producing region, particularly in the long term," said Vitaly Nesis, chief executive of St Petersburg-based miner Polymetal. His company plans to launch the Mayskoye gold deposit in Chukotka by 2011.

(Additional reporting by Polina Devitt in Moscow; Editing by Sara Ledwith)

ALMAZJUVELIREXPORT. Information about the Company. Description, Address, Phones, e-mail, web site, photo. Information about Leader, photo of the Leader. A grand Encyclopaedia of russian goods and services producers in Internet

ALMAZJUVELIREXPORT. Information about the Company. Description, Address, Phones, e-mail, web site, photo. Information about Leader, photo of the Leader. A grand Encyclopaedia of russian goods and services producers in Internet

ALMAZJUVELIREXPORT

Moscow

				(Source: "The Golden Book of Moscow Business. Part one", 1997)
Valeri Borissoglebsky General Director The state-owned unitary enterprise-foreign trade association "Almazjuvelirexport" has for over 26 years been trading in diamonds rough and polished, platinum group metals, jewellery, etc. The company signed the first contracts for exporting the above mentioned commodities. The markets of these goods are extremely complicated and strongly monopolized, that's why highly professional specialists are needed to work on them as well as reliable, long-standing contacts with foreign partners and a good knowledge of the market situation, all these qualities characterize experts of Almazjuvelirexport. ALMAZJUVELIREXPORT executes the Government's assignments on export of platinum group metals, precious stones, etc. A network of associated companies in Belgium, Switzerland, the United States and Israel facilitates the work of Almazjuvelirexport on these countries' markets. ALMAZJUVELIREXPORT has recently set up a number of manufacturing joint ventures. It renders services to Russian and foreign firms on commission basis in selling precious stones, including emeralds, jewellery, gold and platinum nuggets, amber and amber articles, silverware, pearls as well as refinement of waste containing platinum group metals. ALMAZJUVELIREXPORT has the reputation of a reliable partner. STATE-OWNED UNITARY ENTERPRISE FOREIGN TRADE ASSOCIATION V/O "ALMAZJUVELIREXPORT". 25, block 1, Zubovsky Boulevard, Moscow 119021, Russia. Tel.: (095) 245-3410, 245-3420. Fax: (095) 956-6326. Satellite com.: (7-502) 220-2018. Telex: 411115.

Business : Gold hits 6-1/2 week low as dollar firms

Business : Gold hits 6-1/2 week low as dollar firms: "Despite recent price dips, in the longer term many analysts believe bullion’s potential to rise remains intact.

“The investment sentiment towards gold is very positive,” said analyst Suki Cooper at Barclays Capital, adding the worries about inflation and the health of the economy could help support gold prices."

Business : Gold rises 1.5 pct as dollar falters

Business : Gold rises 1.5 pct as dollar falters: "Gold rises 1.5 pct as dollar falters
(Reuters)
24 December 2009
LONDON - Gold prices rallied more than 1.5 percent on Thursday to above $1,100 an ounce as the dollar lost ground and on the back of robust investment flows betting on higher bullion prices.

Other precious metals took their cue from gold’s strength with both palladium and platinum rallying to their highest in about a week at $375 an ounce and $1,4560.50 an ounce respectively.

Spot gold was at $1,104.05 an ounce by 1035 GMT, versus $1,087 an ounce late in New York on Wednesday. Bullion tumbled to a seven-week low of $1,074.10 an ounce earlier this week.

Analysts said the price moves were partly exaggerated due to low liquidity because of the Christmas holiday period, but the fundamentals which sent gold to an all-time high of $1,226.10 an ounce in early December were also still in place.

“Gold’s rising because of a weaker dollar,” said Daniel Smith, analyst at Standard Chartered. “But also the recent sell-off was a bit overdone as a lot of the factors that supported gold are still in place,” he said.

The dollar dipped, coming off three-month highs against a basket of currencies after weak U.S. housing data the previous day dampened optimism about the outlook for the U.S. economy.

A weaker dollar makes gold cheaper for non-U.S. investors and boosts its appeal as an alternative asset.

At current levels, bullion was set to post its biggest one-day percentage gain in more than three weeks.

“Investor flows have held up pretty well. Physical demand in places like India has been strong and I think that’s going to be supportive of the prices,” Smith said, adding he expected a volatile trade due to holiday-thinned liquidity.

U.S. gold futures for February delivery rose 1.1 percent to $1,106.40, compared to $1,094.00 an ounce on the COMEX division of the New York Mercantile Exchange. Futures also hit a 7-week low of $1,075.20 on Tuesday.

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,132.708 tonnes as of Dec. 23, unchanged from the previous business day and staying just below a record high of 1,134.03 tonnes hit on June 1.

The world’s largest silver-backed exchange-traded fund, iShares Silver Trust, said its silver holdings stood at 9,492.97 tonnes as of Dec. 23, unchanged from the previous business day, after easing from a record high of 9,514.35 tonnes on Dec. 22.

Among other precious metals, spot silver was bid at $17.30 an ounce against $17.09. Platinum was at $1,454 an ounce against $1,418.50, while palladium was at $374 against $355.50."

Russia Nixes Gold Sale After Leak - WSJ.com

Russia Nixes Gold Sale After Leak - WSJ.com

By GRIGORI GERENSTEIN and WILLIAM MAULDIN

OCTOBER 28, 2009

MOSCOW -- Russia postponed a plan to sell up to $1.7 billion in gold on the international market after word of the sale was leaked to local news media.
Precious-metals export agency Almazyuvelirexport said Tuesday it would delay the planned move, five days after the Interfax news agency reported it would sell up to 50 metric tons (1.6 million troy ounces) in London before the end of the year to cover the state budget deficit.
In an interview, the agency's deputy chief, Sergey Gorny, declined to comment further but said that more information may be available after Nov. 10.
On Thursday, Interfax had cited an unidentified person as saying that the state's Gokhran precious-metals depository was planning to use Almazyuvelirexport to sell a large amount of gold for the first time since Soviet days.
Russia's change of plans highlights the dilemma facing some governments and central banks that are seeking to diversify their reserves beyond U.S. dollar-denominated holdings by investing in assets such as gold, yet may be tempted to lock in profits after gold prices rose to more than $1,000 an ounce.
"For sure Russia wants to fix some profits with gold above $1,000 an ounce," said Nikolai Sosnovsky, a metals analyst at UralSib Capital. "The reason for all this is surging gold prices."
The 50 metric tons of gold mentioned by Interfax represent "quite a big amount," equal to about 30% of Russia's total gold production last year, Mr. Sosnovsky said.
In February, when its reserves of gold totaled 16.7 million troy ounces, the central bank said that it would continue to buy gold in 2009.
Russia's gold and foreign-currency reserves are the world's third-biggest, valued at $418.7 billion as of Oct. 9.
The bullion market appeared unaffected by the postponement of Russia's gold sale, according to Barclays Capital analyst Suki Cooper. The analyst said prices didn't move when news of the sale emerged because there was no certainty over how much gold would be sold.
Write to William Mauldin at william.mauldin@dowjones.com