Russia 090813 Basic Political Developments

IKEA Starting Plant Construction in Tyumen Oblast

http://www.rusbiznews.com/news/n467.html
12.08.2009 — News

IKEA is investing 50 million Euro into the construction of a timber processing plant in the Tyumen Oblast. The Swedish company registered its two subsidiaries, Arbor-Ishim and Arbor-Ishim-Les, in the Ishim district.

The regional government informed RusBusinessNews that IKEA has already signed a lease contract for 2.5 million square metres of forestry land. In the autumn the company is planning to start the construction of the production facility buildings. A 36 hectare plot 4 kilometres away from Ishim has been allocated for the timber processing plant which would create about 300 jobs.

Jabil Russia postpone Sony production until September

http://www.evertiq.com/news/14848

Updated 10:10, evertiq reported on July 31st that EMS giant Jabil Circuit will start producing in Russia in August.

According to evertiq's information Jabil was supposed to start producing for Sony already in August. However due to a number of technical issues the production start has been moved to autumn. Specific dates have not yet been identified, but according to information evertiq has received the production may start in September instead. Jabil intends to assemble LCD TVs in Russia. Lower import duties have created favourable conditions for the development of assembly production in the country.

Pork production in Russia continues to decline 13 Aug 2009

http://www.meatinternational.com/news/pork-production-in-russia-continues-to-decline-id1724.html
Pork production in Russia continues to decline, sources in the Ministry of Agriculture have said.

By Evegen Vorotnikov

 

Among the main reasons of this are: the reducing of pig numbers, lack of selection and breeding work, and the irregularity of investments in the industry.

 

According to recent pork market research, amid the crisis, the level of pork production in Russia this year will fall about two times the amount, while the dynamics of consumption by almost three times.

 

The level of consumption of pork in Russia remains quite low, two times lower than in developed countries. High prices for this type of meat are also constraining the consumption. At the end of last year, pork prices rose by nearly 25% due to an increase in production costs, in particular feed.

 

Currently the Russian pork import market is very strong due to high production efficiency and low costs in other countries.

Activity in the Oil and Gas sector (including regulatory)

Rosneft Snaps Up License to Explore Offshore Shelf of Abkhazia
by  Rigzone Staff
8/12/2009
URL: http://www.rigzone.com/news/article.asp?a_id=79238

Citing Chief Executive Sergei Bogdanchikov, Prime-Tass news agency reported Wednesday that Russian oil major Rosneft was granted a license to explore and develop oil on the offshore shelf of the Georgian breakaway republic of Abkhazia.

Accoding to Bogdanchikov, Rosneft, in addition to processing already existing seismic data of the region, will conduct its own seismic survey over the license, completing the first stage of seismic acquisition by the end of 2011.

Hungarian MOL Takes Steps to Keep Production License in Russia

http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=35401&tx_ttnews[backPid]=7&cHash=75155fd109
Publication: Eurasia Daily Monitor Volume: 6 Issue: 155

August 12, 2009 03:18 PM Age: 10 hrs

Category: Eurasia Daily Monitor, Vlad’s Corner, Russia, Hungary, Energy, Foreign Policy, Economics, Home Page

By: Vladimir Socor

Hungarian MOL's oil-producing joint venture in Russia, ZMB, has gained a respite from the Russian authorities' threat to revoke its production license. ZMB (Zapadno-Malobalyk), a parity joint venture of MOL with Russneft in western Siberia's Khanty-Mansi district, had recently been warned by Russia's mineral resources supervisory authority, RosNedra, to capture and use the associated gas at its oil wells, rather than flaring or re-injecting it. A meeting of ZMB's board of directors in Budapest has decided to address RosNedra's demand in a positive way (ITAR-TASS, August 10, 11).

Utilization of associated gas is a systemic problem in the Russian oil industry. Russian authorities seem to have targeted ZMB selectively at this point. In future, however, RosNedra may use the ZMB case as a precedent with regard to other oil companies in Russia.

RosNedra issued a first warning in April and another one in early July, when it gave ZMB only six months to comply. Some observers have interpreted this as pressure on MOL to accept Surgut Neftegaz's surreptitious grab of 21 percent of MOL's shares in March -a move that fell short of compliance with Hungarian law and contravened MOL's corporate transparency requirements. MOL has not ruled out a connection between Surgut's and RosNedra's moves, but neither does MOL presume such a connection (EDM, July 20). Instead, MOL seeks to address the associated gas issue on technical and commercial merits.

At its meeting, the ZMB board approved measures to utilize 95 percent of the associated gas at its oil wells. The company will build a gas-fired power plant at the field and use that electricity for ZMB's production purposes. The company will also drill 12 additional wells at the field. The entire program is to be financed from the company's 2009 second-semester revenues, not loans. In addition to these measures, MOL and ZMB expect to comply with RosNedra's requirements and to retain the production license (Interfax, Vilaggazdasag, Platts Commodity News, August 7).

ZMB's associated gas utilization problem can be traced largely to the state company Rosneft, which has since 2007 declined to take the associated gas from ZMB. Prior to that year, ZMB was pumping 60 percent of its associated gas into a pipeline link to Yuzhno-Malobalinsk, a nearby field of the defunct company Yukos' unit, Yuganskneftegaz, for collection and transportation. After the Kremlin's destruction of Mikhail Khodorkovsky's Yukos, however, state-owned Rosneft took over Yuganskneftegaz, including Yuzhno-Malobalinsk, and stopped accepting ZMB's associated gas there. This gave RosNedra in due course the excuse for threatening ZMB with revoking the license and MOL with losing its Russian asset.

This MOL asset is, in a sense, a Yukos-legacy project. ZMB started out as a Yukos-MOL parity joint venture in 2003. During the destruction of Yukos, tycoon Mikhail Gutseriyev's Russneft company took over the Yukos 50 percent share in ZMB in 2005. Two years later Gutseriyev had to flee Russia. This history, along with RosNedra's current handling of the associated gas issue, reflects the precarious legal basis for foreign and domestic investors in Russia's oil and gas sector.

Facing natural gas production shortfalls in the years immediately ahead, the Russian government wants oil companies to reduce the widespread practice of flaring the associated gas at the oil well. Instead, the government is urging the oil companies to invest in capturing the associated gas and pumping it into Russia's central gas supply system. Such operations would require massive investments. Moreover, those gas volumes would likely be used for internal consumption in Russia, making it unprofitable for foreign companies to sell the gas at the state-controlled, rock-bottom prices on Russia's internal gas market. Meanwhile, the gas flaring poses severe environmental problems both locally and in terms of continental climate-change.

According to the Minister of Natural Resources Yuri Trutnev, Russia processes only 30 percent of the gas produced. No gas-processing plant has been built in Russia during the last 17 years. Moreover, according to other ministry officials, no installations have been built in the last 30 years for associated gas processing, and there is almost no infrastructure for its transportation (ITAR-TASS, August 10).

Russian authorities have been content thus far with urging the companies, stopping short of coercion. The ZMB case, however, may serve as a harbinger that the authorities could threaten larger players with penalties or cancelation of licenses over the issue of associated gas.

UPDATE 1-Sibir Energy chairman, CEO step down

http://www.reuters.com/article/rbssEnergyNews/idUSLC16102920090812
Wed Aug 12, 2009 2:27pm EDT

* Vadim Yakovlev named chairman, succeeds William Guinness

* Igor Tsibelman named CEO, succeeds Stuard Detmer

* 3 non-executive directors also appointed (Adds detail)

LONDON, Aug 12 (Reuters) - Russian oil and gas explorer Sibir Energy (SBE.L: Quote, Profile, Research, Stock Buzz) said on Wednesday its chairman and chief executive have both stepped-down from the board.

In a statement it said William Guinness would be succeeded as chairman by non-executive director Vadim Yakovlev, while Igor Tsibelman, previously deputy CEO, would become CEO in place of Stuard Detmer.

The appointments reflect the control over the business of Gazprom Neft (SIBN.MM: Quote, Profile, Research, Stock Buzz), the oil arm of the the world's largest gas company Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz), which has acquired ownership over a majority of the voting rights of Sibir's shares.

Sibir also announced the appointment of three non-executive directors -- Dmitry Bekker, Maxim Viktorov and Andrei Martianov.

Bekker is a representative of The Central Fuel Company and the Moscow city government, while Viktorov and Martianov are nominees of The Central Fuel Company and Gazprom Neft, respectively.

Trading in Sibir's shares was suspended in February on London's AIM after it was revealed that debt from property deals of one of its main shareholders, Shalva Chigirinsky, was higher than had previously been announced. [ID:nLJ308825]

(Reporting by James Davey; Editing Bernard Orr)

Alfa Laval Wins SEK 110 Million Energy Efficiency Order from One of the Biggest Refineries in Russia

http://newsticker.welt.de/?module=smarthouse&id=929335

Regulatory News:

Alfa Laval – a world leader in heat transfer, centrifugal separation and fluid handling – has received an order for compact heat exchangers from one of the major refineries in Russia. The order value is about SEK 110 million and delivery is scheduled for 2010.

The Alfa Laval compact heat exchangers will be used for preheating the crude oil before it goes into one of the main distillation processes. By using Alfa Laval’s compact heat exchangers it is possible to recover heat from several streams of the refinery process. As a result the Russian refinery will be able to reduce its energy consumption by 340 MW and CO2 emissions by 850 000 tonnes annually. The reduction of CO2 emissions corresponds to approximately the emissions from all family cars during one year in Stockholm, the Swedish capital.

"The order confirms that Alfa Laval’s compact heat exchangers has an outstanding offer that fits the refinery needs; technical, financial and environmental”, says Lars Renström, President and CEO of the Alfa Laval Group. "It is also evidence that Russian refineries’ continuous to investment in energy efficiency.”

Did you know that… by replacing the traditional shell-and-tube equipment with Alfa Laval’s compact heat exchangers, a refinery reduces its energy consumption to the extent that the pay-back time for such an investment is less than a year?

Alfa Laval is a leading global provider of specialized products and engineering solutions based on its key technologies of heat transfer, separation and fluid handling.

The company’s equipment, systems and services are dedicated to assisting customers in optimizing the performance of their processes. The solutions help them to heat, cool, separate and transport products in industries that produce food and beverages, chemicals and petrochemicals, pharmaceuticals, starch, sugar and ethanol.

Alfa Laval’s products are also used in power plants, aboard ships, in the mechanical engineering industry, in the mining industry and for wastewater treatment, as well as for comfort climate and refrigeration applications.

Alfa Laval’s worldwide organization works closely with customers in nearly 100 countries to help them stay ahead in the global arena.

Alfa Laval is listed on the Nordic Exchange, Nordic Large Cap, and, in 2008, posted annual sales of about SEK 28 billion (approx. 2.9 billion Euros). The company has some 12 000 employees. www.alfalaval.com

This information was brought to you by Cision http://www.cisionwire.com

Gazprom

Yamal Authorities Suggest Reviewing Gazprom’s Tax Payments

http://www.rusbiznews.com/news/n466.html
12.08.2009 — News

Yuri Neyelov, the Governor of Yamal, has suggested introducing amendments to the Russian tax legislation which would bind OJSC to increase payments to regional budgets. Should these be adopted the gas monopoly will have to pay the profit tax not only at the location of the head office and subsidiary companies but also to budgets of territories where there is property of OJSC Gazprom.

Yamal is Russia's main gas producing region. The production capacities of OJSC Gazprom located in this subject of the Federation define, to a significant degree, the company's capitalisation. In Mr. Neyelov's opinion OJSC Gazprom should pay not only the property tax on real estate to regional budgets, but the property tax on movable assets too.

YaNAO government informed RusBusinessNews that these initiatives may significantly augment the region's budget. Yamal ended the first half of 2009 with a 9.46 billion roubles budget surplus. At the same time the authorities predict a worsening of the financial situation next year.