Russia 110201 Basic Political Developments

UPDATE 1-Cherkizovo sees higher poultry price from Q2

http://www.reuters.com/article/2011/02/01/cherkizovo-idUKLDE7100BZ20110201

Tue Feb 1, 2011 2:58am EST

* Import quota cuts, grain costs to boost poultry prices

* Prices fell 3 percent in rouble terms in 2010

* Poultry output up 5 percent in 2010 to 194,100 tonnes

(Writes through, adds detail)

MOSCOW, Feb 1 (Reuters) - Cherkizovo (CHEq.L) (GCHE.MM), Russia's biggest meat producer, is counting on higher poultry prices from the second quarter, thanks to cuts in import quotas, a knock-on effect from surging grain costs and falling stocks.

Cherkizovo, which on Tuesday reported a 5 percent rise in poultry sales to 194,100 tonnes, also forecast solid volume growth this year.

 Russia -- seeking to develop the economy's non-energy sectors, including agriculture -- has cut poultry import quotas for this year to 350,000 tonnes from an initial 600,000 tonnes. [ID:nLDE6AM0UG]

The cut is a boon for local producers like Cherkizovo, who have seen costs surge after the summer 2010 drought -- the worst in over a century -- wiped out a third of Russia's grain crop.

"The group expects the pricing environment for our products to recover towards the second half of the year, supported by reduced imports and rising costs resulting from grain price increases, as well as by a shortage of supply driven by the reduction of stock," Cherkizovo said.

It added that it expected upward trends in poultry prices to begin from the second quarter after a weak start to the year.

There have been some reports of smaller poultry farms slaughtering their stock as higher feed costs push them into bankruptcy. [ID:nLDE6BI07Q]

Cherkizovo said prices for its poultry inched up by 1 percent in dollar terms to $2.37 per kilogram, but fell 3 percent in rouble terms to 71.89 roubles -- reflecting a stronger Russian currency. (Writing by Toni Vorobyova; Editing by David Holmes)

For the Record

http://www.themoscowtimes.com/business/article/for-the-record/430131.html
01 February 2011

Mobile TeleSystems is in merger talks with a major cellular operator, the company’s chairman, Vladimir Yevtushenkov, told reporters Monday, without being more specific. (Bloomberg)

Norilsk Nickel’s nickel production in the fourth quarter totaled 77,000 tons, a 2.7 percent increase from the prior quarter, and full-year output climbed 5.1 percent to 297,000 tons, the company said Monday in a statement on its web site. (Bloomberg)

Development of the Trebs and Titov oil fields in northern Russia won’t affect Bashneft’s dividends, Vladimir Yevtushenkov, chairman of AFK Sistema, which controls Bashneft, said Monday. (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

Hungary seeks to renegotiate Russian gas contract from 2012

http://bbjonline.hu/index.php?col=1001&id=55781

Tuesday 9:49, February 1st, 2011

Russia wants to negotiate an extension of its long-term contract to deliver gas to Hungary only in 2014, the year the contract expires, while the Hungarian government would like to start negotiations on the extension already in 2012, half-way through the current government's term, National Development Minister Tamas Fellegi said in a written response to a question by an MP.

Russia wants to negotiate an extension of its long-term contract to deliver gas to Hungary only in 2014, the year the contract expires, while the Hungarian government would like to start negotiations on the extension already in 2012, half-way through the current government's term, National Development Minister Tamas Fellegi said in a written response to a question by an MP.

In the question, Lajos Olah, a member of the Opposition, asked the minister if he had negotiated the contract with his Russian counterparts.

In his answer, posted on the website of Parliament, Fellegi said he had negotiated with the Russians several times since being named government commissioner in charge of Hungarian-Russian economic relations. "The Russian side's categorical stand is that they do not want to negotiate on questions of price, and they are only prepared to put on the agenda talks on the extension of the contract which runs out at the end of 2014 in the year it expires," he said.

The Hungarian stand on the matter is to start negotiations in the middle of the current government's term, Fellegi said. The contract is not with the state of Hungary, but with German-owned E.ON, thus the utilities company's interests must also be taken into consideration, he added. The government believes the conditions of the supply agreement should be established in a bilateral agreement between the states of Hungary and Russia, in addition to the inter-company contract, Fellegi said. (Econews)
Russia's Jan ESPO exports via Kozmino up 33% on year to 1.2 mil mt

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7024656

Moscow (Platts)--1Feb2011/330 am EST/830 GMT

Exports of Russian ESPO crude via the Far Eastern port of Kozmino amounted to 1.2 million mt of crude or 290,000 b/d in January, up 33% from the same period a year ago, and in line with previously announced plans, the port authorities said in a statement Tuesday.

Of the total, 42% of the cargoes, of 100,000 mt each, was sent to Japan. Thailand was the second biggest buyer, accounting for 25%, followed by Singapore (10%), South Korea (8%), China (8%) and Indonesia (7%). Kozmino port plans to load 11 tankers or 1.1 million mt of crude in February and 13 tankers or 1.3 million mt in March, the statement said, confirming what Platts reported earlier.

--Nadia Rodova, [e-mail]

Surgutneftegaz Sells East Siberian Crude Oil for March, April

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ap4HiFQYQFpw

By Christian Schmollinger

Feb. 1 (Bloomberg) -- OAO Surgutneftegaz, a Russian oil producer, sold 400,000 metric tons of East Siberian Pacific Ocean pipeline crude for loading from March to early April, according to five traders who participate in the market. Chevron Corp., Statoil ASA, Glencore International AG and Itochu Corp. purchased cargoes, the traders said.

Details of the sale are as follows:

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Crude: East Siberian Pacific Ocean pipeline crude

Quantity: 100,000 metric tons (730,000 barrels) x 4 cargoes

Buyers: Chevron, Itochu, Statoil, Glencore

Loading: March 7-11, 14-18, 21-25, March 29 to April 1

Port: Kozmino Bay Terminal, Russia’s Far East

Price: Premiums from $2.90 to $3.30 a barrel to

the price of Dubai published by Platts.

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To contact the reporter on this story: Christian Schmollinger in Singapore at [e-mail]

To contact the editor responsible for this story: Clyde Russell in Singapore at [e-mail]

Last Updated: January 31, 2011 22:25 EST